A great article below. Rand Directors are looking at paying $80m...

A great article below. Rand Directors are looking at paying $80m for an iron ore play in Liberia. Just who are the real vendors, not the faceless companies, but who are the people behind them. This $80m suddenly becomes MORE THAN $400m if you value the Rand and Tribune paper at true market values.
Go to the Transperancy International web site and you find that Liberia ranks at 87 out of 178 with a corruptions perception index of 3.3 with 10 being top and 1 being Somalia. Ivory Coast, Liberias next door neighbor ranks 146.
Poor old Rand shareholders really have no say because Tribune (oh yes same directors as Rand) hold 44% of Rand so they really will control which way any vote may go.
So Dang, and all other Rand shareholders, i would ask Mr Billis why he and his board would entertain a project in a seriously corrupt part of the world, a project that is in the jungle (oh that will be easy, just forget the environment) and is in any event only medium scale on the world index.
While i have no position in Rand i do hold a position in Tribune and i believe that the proposed Rand deal will not be good for Tribune.
Based on the cash and bullion and production that rand has the shares should be up around $2.00.
Ask the questions of the directors.


From MiningNews
Dryblower?s lament as African corruption, masquerading as nationalism, rises again
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Monday, 2 May 2011


THREE strikes and you?re out! That?s more than a baseball rule; it?s one Dryblower reckons should be followed by investors, whether looking at a company, a commodity, or an investment destination.
Last week, Africa scored its third sovereign-risk strike in less than three months. If investors in African-focussed stocks are not looking very carefully, they ought to be.

Namibia was the location of strike number three with its totally unexpected and not yet fully explained proposal to nationalise key exploration and mining rights.

Zimbabwe, an old risk favourite, was strike two with its fresh assault on foreign investment by deeming that all overseas-owned business worth more than $500,000 must have 51% Zim ownership.

Guinea was strike one with its demand that Rio Tinto and its Chinese partner pay an upfront fee of $700 million for the right to mine the Simandou iron ore project and give the government a 35% stake in the project.

Apologists for Africa will argue that this is the way things are done in the hopeless continent; that fat fees for the ruling elite and expropriation of assets has always been the way of doing business. The Russian mafia operates on similar lines.

But for naive investors from the western world these latest examples of corruption, African-style, are the best warning yet that a rot has started, and will spread.

Historians, and old observers like Blower, have seen the way the process unfolds. It starts in boom times when commodity prices are high, money is flowing freely, and African rulers have the confidence to say ?cough up? because now is a time when no one will notice and the cash flow covers the cost of the transfer.

Once started, it spreads across borders as each country realises that (a) their neighbours are getting richer, (b) western companies will indeed cough up in boom times, and (c) they can get away with it.

Over time, corruption weakens and then destroys the country that allows it to occur.

Somalia, a fine African example of how not to run a country, currently holds the title of the world?s most corrupt, ranking 178 on the 178-member list of the Corruptions Perceptions Index compiled by Transparency International.

Given what?s just happened in Namibia, Guinea and Zimbabwe the TI list might become more popular with western investors as they query where the management of the companies they own is sending their money.

On the 2010 list released last October no African country made the top 50 of least corrupt countries (Denmark and New Zealand are the least corrupt) but 20 African countries were in the bottom 50 ? or, to put it another way, 40% of the world?s most corrupt countries are found in Africa.

From the bottom up the African members of the TI list are ? and it is worth reading because you might have shares in a company sending some of your money there ? Somalia (178), Sudan (172), Chad (171), Burundi (170), Equatorial Guinea (168), Angola (167), Guinea (equal 164), DRC Congo (equal 164), Kenya (154), Guinea-Bissau (equal 154), Congo-Brazzaville (equal 154), Central African Republic (equal 154), Libya (146), Ivory Coast (146), Mauritania (143), Zimbabwe (equal 134), Sierra Leone (equal 134). And the list goes on, and on, of African corruption.

What?s just happened in Guinea, Zimbabwe and Namibia is a warning that the rot will spread further the longer commodity prices stay high and people in power start to believe that this is the way business is done and it?s a quick way to get rich.

Rio Tinto, perhaps faced with no choice after investing heavily in Simandou, has handed a 35% stake in what might become one of the world?s biggest iron ore mines to a government which ranks 164th most corrupt in the world, as well has coughing up $700 million in cash.

Zimbabwe has just made one of its crazy decisions to hand control of all foreign-owned companies worth more than $500,000 to locals ? with the dollar value set so low that it catches every foreign company.

Namibia is yet to explain its decision on foreign investment but savvy investors can certainly smell trouble brewing, with the share prices of foreign companies involved in the Namibian uranium industry crashing.

The shareholders of Extract Resources alone are $450 million poorer today than they were before Easter with the Extract share price falling from $8.46 to $6.68 at the close last Friday.

When combined with the sell-off after Japan?s nuclear accident the value lost in Extract over the past two months totals $1 billion ? half to a nuclear power plant meltdown and half to what looks to be a Namibian government meltdown.