The Honorable Hussein Abdi Dualeh, Minister of Energy and Minerals, Republic of Somaliland

Somaliland establishes a reputation beyond that of its southern neighbor.

Somaliland-BLOGCould you provide a brief overview of the Somaliland’s geological potential?

HAD: The geological environment is very favorable to the discovery of many types of metallic minerals. Most of the base metals in the Mozambique belt which we are a part of are present in Somaliland and we have abundance deposits of iron ore, coal and manganese as well as a slew of rare earth metals including colombite-tantalite which are currently being mined artisanally. There is also a good potential in Somaliland for precious metals such as gold, platinum and silver.

Can you provide us a brief overview of the regulatory environment that mining companies can expect when coming to Somaliland?

HAD: Somaliland’s new mining code is currently under review and we expect its implementation in 2014. We can assure investors that our new mining code is very competitive with other East African countries and that our fiscal terms such royalty rates and taxes will be competitive or even better than other mining destinations. We are willing to sit down with any viable potential investor to discuss the terms of a win-win agreement.

The sovereignty of Somaliland is not yet recognized by. As Somalia’s government grows stronger, are there worries for future established mining projects in disputed regions?

HAD: Disputes over resources between Somalia and Somaliland should not be a concern to potential investors. Somaliland received its independence in June 1960 from Britain and its boundaries are demarcated by at least three international treaties that date as far back as the 1800s. We have full control of our territory and our borders and we are not in conflict with our neighbors. Our colonial-era borders are beyond dispute.

The international oil and gas companies that are operating in Somaliland that have signed licenses with us gives us confidence that we are a safe investment bet. Some of these companies are publicly traded and answer to boards and shareholders and have access to good legal advice. In coming here, they concluded that the risk-reward ratio to invest in Somaliland and sink large sums of money is acceptable. I am confident any shrewd mining company that looks at out mineral assets and evaluate the above ground risks here will come to the same conclusion. The separation of Somaliland from Somalia in 1991 when it regained its independence after an unsuccessful union is a forgone conclusion. It is a fait accompli. The world will eventually catch up with the realities on the ground and recognize Somaliland as the 55th State in Africa. We are certain of that.

What initiatives are in place to improve nation’s infrastructure?

HAD: Somaliland’s Berbera port is a very old port but has the potential to become world-class port and we are currently in negotiations with a foreign company that plans to invest nearly $400 million to improve it. The country’s long coastline is dotted with natural harbors and pristine beaches and is ripe for development. It is amazing how the mineralized zones in Somaliland actually hug our coastline, which makes it logistically convenient to ship bulk mineral ores once exploited to world markets. The issue of piracy in the Gulf of Aden has almost disappeared because of the major interventions by world powers to protect international maritime fleets. We are unaware of a single piracy incident that occurred in waters in 2013.

Inland infrastructure, specifically electrification does remain a concern, but the good thing is we do have significant mineral coal deposits that can easily be exploited and used for power generation for the mining industry. We also have one of the highest wind speeds in the entire continent and of course year round sun which can be harnessed as well to generate significant amounts of power for mining industry and domestic use.

Looking into the future, where do you expect to see Somaliland’s mining industry in five years time?

HAD: We would like to invite and welcome mining companies to come to Somaliland. Somaliland has exploitable iron ore, coal, manganese, heavy mineral sands and rear earths among other minerals that are ready to exploited, all not far from the deep port of Berbera. In five years from now we would like to be a major mining destination in East Africa and a major exporter of industrial minerals. We also have a very high potential for hydrocarbons and we are confident we will have a commercial oil discovery within the next two years. With our under-explored hard minerals potential, this is a country that a small aggressive mining company can come in at the ground floor and grow with us and strike it big.

This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Second Official Mining in Africa Country Investment Guide, will be launched next February 2015, as the only official publication providing country-specific information at Africa’s top mining event, the 2015 Investing in Africa Mining Indaba™ held in Cape Town, South Africa. You can view the 2014 Official Mining in Africa Country Investment Guide here

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