MINERAL WEALTH
On an economic basis, under a recent agreement made by the newly elected Mohamud Muse Hersi and Australian mining and exploration company, Range Resources, was granted a 50.1% interest in the sole and exclusive rights to all mineral and hydrocarbon exploration and development in the Somali state. This was achieved for the purposes of joint ventures and farm-in agreements with several major companies, thus providing investment benefits to the people of Puntland.
The mineral potential of Puntland has yet to be identified. However it is believed that commercially viable oil (500 million barrels recoverable have been discovered to date) and gas, along with mineral potentials in uranium, iron ore and coal are believed to be contained in the 212,000 Square-Kilometre region. The recent agreement is seen as positive sign for the developmental progress of the state.
The contract with Range Resources has a life of four (4) years with options of renewal. However, Range Resources will need to be mindful of the recent conflict in Nigeria whereby Nigerian militants whom kidnapped four foreign oil workers and attacked a Shell oil platform say they are preparing to carry out more raids.
Similar problems could erupt with Somaliland. See report from Afrol News, Feb. 02, 2006:
"In mid-January, the government of Somaliland issued a strongly worded warning to the Australian mining company, warning it against entering on Somaliland territories. The Hargeisa Foreign Ministry in a statement said the Australians had been given "false contracts" and that "they cannot enter Somaliland, nor carry out exploration or mining activities in our country, and if they should do so, will face whatever action that Somaliland deems necessary to protect the integrity of its territory."
The Hargeisa government’s protest has inflamed the outrage of Somalilanders all over the world. The Somaliland Forum, which brings together Somalilanders in the Diaspora, this week joined the protests and issued a statement "denouncing the illegitimate and fallacious contract." The Forum called on the Somaliland government to "defend its territory."
Both the Hargeisa government and Somalilanders refer to the borders between Italian Somalia and British Somaliland "that were established during the Colonial Era" as "internationally recognised." According to international law, an occupying state can not sell exploration rights to foreign companies or engage in the exploitation of natural resources on occupied territory.
The issue may however become complicated for the Hargeisa government, which has yet to be internationally recognised. As Somaliland is not a recognised state and thus considered part of Somalia, Somalilanders can not count on international law. Officially, there is no international border between Somaliland and Puntland. "
