Source: Middle East online , 15/09/2010
Will Yemen’s potentially golden riches satisfy the Gulf’s appetite? An Emirati firm hopes to strike gold in two of Yemen’s most troubled regions.The Thani Dubai Mining Company announced on Monday that it will search for gold in two of Yemen’s most volatile regions, the official Yemeni news agency SABA is reporting.
The news comes after the company dug more that 80 wells and took 8,718 rock samples throughout the country. “This is really great news,” Henry Thompson, a consultant for Thani Dubai Mining Company told The Media Line. “Yemen is not an easy country to invest in.” Thompson said that some 350 people are expected to employed when Thani opens a mine“What this will do is put more food in Yemeni mouths,” he said. “It takes 10 15 years of exploration before you establish a mine, but the mining industry has the possibility of employing a lot of people in a meaningful way. Most of the people are semi-skilled.”
Yemen is one of the world’s poorest countries with dwindling oil reserves and a nascent natural gas export industry, so a successful gold mining industry would be a welcome addition to the country’s economy. Gold is currently trading at a record high level of $1,254.05 an ounce.While the Middle East, particularly the Gulf region, is flush with natural resources such as oil and natural gas, mining remains on a relatively modest scale. There have been a number of recent discoveries; however, as Jordan has found uranium deposits and in June the United States announced that a geological survey had found $1 trillion worth of mineral deposits in Afghanistan.Justin Crump, CEO of Sibylline Ltd, a risk consultancy firm, shared Thompson’s view that working in Yemen is not easy.
“They will of course face the normal range of risks that anyone is exposed to in Yemen - the most armed country on earth, and the poorest in the Arab world; driven by complex tribal disputes and long-term splits between north and south; and one with rapidly dwindling resources,” Crump told The Media Line. Crump said that among the two regions the mining company plans to explore, Yemen’s Hadramout region is much more risky, while the Hajjah region is quiet.
“Hadramout was treated almost as a separate region by the British and Hadramis have spread far and wide due to long-standing trade links,” he said. “They are very proud and it is important to understand local politics when operating in the Wadi.” “Al-Qaeda operates there although the movement does not enjoy unqualified support, and an attack against the security forces there last November was very controversial,” Crump continued. “Suicide bombers have been interdicted there recently.”“Hajjah meanwhile is relatively quiescent, and is a relatively pleasant physical environment,” he said.
“The people in the coastal areas are more welcoming than the tribes in the interior, as a result of their history of trading with the outside world. However, areas in the northwest are used by militants to penetrate into Saudi Arabia and this poses a collateral risk to firms operating there.”Yemen was recently ranked 18th in the Failed States Index, put together by the American non-governmental organization Fund for Peace.Fund for Peace defines a failed state as one where the government has lost physical control of its territory or does not have a monopoly on the legitimate use of force.
Failed states also tend to have an inability to provide reasonable public services. The central government in ‘San’aa has been fighting with a militant group belonging to the Shi’ite offshoot Al-Houthi rebels in the northeast of the country since 2004. In addition, the government is fighting a secessionist movement in the south, which accuses the government of unfairly diverting the oil wealth from that region.
The movement is also calling for a return to the two-state division, in place before Yemen gained independence in 1967. For the past two years, there have been increasing fears that Al-Qa’ida in the Arabian Peninsula is taking advantage of Yemen’s unstable political situation to strengthen its presence in the region.
By Adam Gonn on Tuesday, September 14, 2010