By James Wellstead — Exclusive to Potash Investing News
Elemental Minerals Ltd. (ASX: ELM), with its Sintoukola project along the ROC's Atlantic coast, recently announced high-grade sylvinite intersections from its Phase 2 exploration drilling at the Kola potash deposit. Meanwhile, Holle Potash Corp. is progressing with exploration of its two projects, Tchitondi and Manenga, and newcomer African Potash Ltd. (LSE: AFPO) recently acquired 70 percent of Patagonia Capital's play in the Lake Dinga region, a few hundred kilometers from Elemental's main project site.Even though potash mining excursions and developments within African regions are on the rise, investors should be aware of the the political and security risks that mining in some African countries entails. The prevalence of risk Potash markets typically do not display the same kinds of risks seen in other resource markets, but political tension between states continues to cause concern for miners in North Africa's Danakil region. Though inter-state conflict has diminished since the height of the 1998-2000 war, continued hostilities between Eritrea and Ethiopia are impacting miners within the region. Recent calls for stronger United Nations sanctions on Eritrea's mining industry from the Ethiopian State Minister of Foreign Affairs, Berhane Gebre Kristos, have not created an environment conducive to investing hundreds of millions in long-term capital projects. But despite posturing and jingoistic diplomacy, potash development is continuing in Ethiopia and across Africa. Djibouti, the small African country bordering the Red Sea and Ethiopia, has recently invited bids to expand the Doraleh Container Terminal on the prospect of handling increasing potash exports. Talks of financing the project with China and the World Bank, among others, look to double the capacity of the port in coming years. Risks not a barrier Further south, just next to Elemental's Kola project, the Democratic Republic of the Congo has long been a shining example of the corruption, conflict, and risk that plague miners and the countries pursuing mining. A recent report by the Extractive Industries Transparency Initiative's Congo coordinator, Jeremy Dumba, calculated that US $70 million in mining fees paid to the government last year were left off the books, likely falling into personal coffers. But despite political corruption miners continue to seek the resources.
"Capital will move in the longer term to where you can get a better deal. Places like Mozambique and Botswana are open for business," said Michael Blakiston, a Perth-based partner at law firm Gilbert + Tobin, which advises on mining deals.In the end, mining projects will continue to move forward in countries that possess the resources and seek a means to develop them. Securities Disclosure: I, James Wellstead, hold no direct investment interest in any company mentioned in this article. Potash Mining in Africa from Potash Investing News