ghana ranked safest - west african country

FYI

AFRICA as a mining and exploration drawcard was showing its two faces today.

First, Newcrest Mining (NCM) announced it had suspended operations at its Bonriko gold mine in Ivory Coast in view of the deteriorating political situation, and has sent its expatriate workers to Ghana.

Second, and across Ivory Coast?s northern border, Gryphon Minerals (GRY) yesterday announced it has a resource of 2 million ounces of gold at its Samavogo deposit in Burkina Faso.

These two items sum up the West African story: great riches and political risk.

Investors here have tended to put a great weight on the former and not to worry too much about the latter.

So far, so good is the case with most of the region. Ghana is regarded as probably the safest place to be, thanks to its long history of dealing with foreign mining companies. At other end of the spectrum, we had the incident last year where French mine workers in Niger were kidnapped by the local Al Qaeda gang. Only the brave would venture into places like the Central African Republic. And Guinea has been giving foreign miners something to worry about from time to time.


To the north, mining investor Lion Selection Group this week lifted its stake in Celamin Holdings (CNL) whose main attraction is a phosphate deposit in Tunisia. Lion now holds 14.55 per cent. The threat of disruption in Tunisia has abated, and did not spread ? as had been feared ? to Algeria and Morocco, countries in which Australian explorers now hold stakes, which should be seen as a relief.

Liberia and Sierra Leone are now being targeted by Australian miners, something inconceivable only a few years ago. Involvement by our explorers in places such as Cameroon, the two Congos and Angola are now regarded as commonplace events.

Ivory Coast remains the main headache as the tussle continues as to who was the rightful victor of the presidential election. The fears are the country will be engulfed in another civil war. One company which will be watching the situation closely is Perseus Mining (PRU) which had planned to be in production there by 2013.

The lesson of Ivory Coast is investors should not be overly complacent or sanguine about political risk in Africa. While it is not a clear and present danger, the Ivory Coast turmoil is a timely reminder about what can happen in Africa with very little notice.