Adventure holidays are the usual line for one of Africa’s tiniest countries — Gambia. For one Brit, however, Gambia is proving an adventure too far.
For some reason, Gambia’s president, Dr Yahya AJJ Jammeh, has it in his mind that Carnegie Minerals is stealing his precious metals. So he threw one of Carnegie’s mining engineers in jail.
All of this is a lesson in risk. Carnegie’s share price graph now looks like someone’s been jamming on the brakes to stop within ten yards. The shares are bouncing sharply around 3p having crashed from 8.25p. This is a bit sad as it raised money from investors in February at 4p.
Britain’s Foreign Office (FO) website for Gambia gave no warning that this sort of thing could happen. Perhaps this is because the drama has been going on since February. The site was last updated on January 2. Not a lot of help for UK investors!
So the FO has Gambia down as a republic under multi-party democratic rule. The ruling party currently holds a huge majority (45 of the 48 elected seats). The president came to power in a bloodless military coup which toppled the elected government in 1994. Only 1.7m people live there. The economy is all about tourism and peanuts. Foreign aid fills the gaps.
The site does state that trade with the UK is strong. The UK is consistently among Gambia's top two or three trading partners — not that this means a lot!
UK exports to Gambia to 2006 amounted to £14.0m, down from £16.47m the previous year. Trade in the opposite direction was valued at £3.5m, up from £3.3m the previous year.
Jammeh obviously has ambitions to boost Gambia’s status. He wants the country to become an oil state. He’s been quoted by the BBC as saying that this could usher in a "new future".
Trouble is, no one has yet found any oil!
He also made a claim to be able to cure AIDS in three days. Last year he said he was treating ten patients with secret herbal-based medicines.
The "economic crime" of finding uranium
So, warnings of more than one kind are in order here, even if they’re not spelt out on the FO site! The best to be said of Gambia is that it seems a mite bizarre. So what were Carnegie and its investors doing there?!
Carnegie was floated on AIM to tackle the Astronhe SeneGambia Mineral Sands project. This is a cross border project extending along the coastlines of Gambia and southern Senegal. Its aim was to produce zircon/rutile concentrate for sale at the mine gate.
This project was a 50-50 joint venture with off-take partner Astron, which has ties to China. Any concentrates were to be shipped bulk in containers to China for final processing. Washed sand was to be sold to the local construction industry.
Carnegie also has exploration projects in Australia and the US. Until January 16 it was getting on with its business of keeping all this work ticking over. Then, the bomb shell hit.
A presidential dictat ordered Carnegie to stop working in Gambia. As alleged by the president, Carnegie was commercially mining titanium and uranium. This was an economic crime. It had a licence only for mineral sands.
Mineral sands are an important source of zirconium, titanium, thorium, tungsten, rare earth elements, as well as the industrial minerals diamond, sapphire, garnet, and occasionally precious metals or gemstones. So if it was processing uranium this was out of order.
Presidential claims of super-power status to come
Two days later the president announced the good news to the Gambian people, amidst the celebrations of Islamic New Year. Gambia was now a source of strategic mineral resources! Hurrah for all of us!
And he reminded them that a few years before he had announced the country also had oil.
Now the biggest find was uranium! It had been there all along, but he had not been able to announce it!
"But I wanted to make sure that what I announce is a reality," his speech went. So the country must stop being divided and work together on the oil and uranium to become a great superpower...
This was to be a superpower of hope for humanity, where people of all kinds could live and work together in peace! Obviously, that excluded Carnegie’s people.
On February 14, Carnegie’s licence was cancelled. Then, a couple of days later, in spite of reassurances that Gambia accepted that it had not found uranium, Gambian police detained the new country manager.
Charlie Northfield, who had only just been appointed, was bundled into prison on landing.
Carnegie pointed out in vain that traces of uranium are found in soil everywhere. So, of course there was some in the Gambian soil — but not in anything like the commercial quantities the president dreams about.
A few days later, and $450,000 poorer after bailing out Charlie Northfield, Carnegie wrote off its Gambia operations.
Now Carnegie is sticking to more normal places
Now Carnegie is sticking to more normal places. It is still operating in Senegal, a country where there are fewer funny stories to be found (a good barometer).
And it has announced a three-year co-operation agreement with the US Geological Survey to look for rare earth deposits in the US.
No-one is forecasting any profits for a long while. Last year Carnegie made a pre-tax loss of £1.7m, or 3.19p a share.
Yet, before its Gambian adventure, Carnegie had been tipped as an interesting little speculation for those precious rare earths.
The lesson is — beware of any country where the stories of its rulers are as bizarre as they are in Gambia!
Keep mining!
Erin and Isabel
