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No one killed in Puntland operations, Range insists
If Somali sources are to be believed, about 10 people have died in a clash between soldiers loyal to Puntland's president and a regional clan opposed to the Australian company's exploration project.
Those same soldiers have been escorting Range geologists and workers around the mini-state. But according to Range's executive chairman, Mike Povey, no one has died as a result of his company's exploration in the state.
"The Government always makes sure a company is protected," Povey says. "They use their troops … [which] would be armed."
Range pays the Government $US200,000 ($274,725) a month as part of its exploration deal. But Povey says that, to his knowledge, the biggest incident was an attempted robbery of a supply truck.
"Everything that you've read has been highly exaggerated," he says.
In Range's case, like many other mining companies with disputed sites in far-flung corners of the world, it is very difficult for investors to verify the situation on the ground.
Instead, it's often the word of the company versus the word of the locals or non-governmental organisations.
In Range's case, a lot of ink has been shed on both sides of the Indian Ocean since it signed a landmark deal in October, giving it the right to 50.1 per cent of all of the minerals and petroleum in Puntland. It was a company-making deal for Range and immediately attracted attention from a large group of investors - many of them day traders - in Australia.
After all, Range claimed petroleum exploration by US oil company Conoco and others had shown a lot of potential before Somalia's civil war necessitated a hasty exit in 1991.
Range shares shot up 70 per cent in the days after the deal was announced. Although there have been no commercial oil finds in the past, Range believes the under-explored area could contain billions of barrels of oil - and its executives portrayed the deal as a major coup for such a tiny company.
But at the same time, the agreement had a lot of Puntlanders - and even the central government of Somalia - questioning how a tiny Australian company managed to snag exclusive exploration rights to 212,500 square kilometres of land.
Soon after the deal was announced, the Somali Prime Minister, Ali Muhammad Gedi, sent a letter to the Australian Stock Exchange questioning its validity. He argued that only the transitional Federal Government of Somalia had the right to sign away mineral rights. Although Puntland is semi-autonomous, it is still recognised internationally as a part of Somalia - including by the Australian Government.
Within weeks, the spat with the Somali Government was somehow settled and Gedi wrote Range a letter to that effect which was soon posted on the company's website.
And by February, Range was all set to begin its ambitious exploration program. Povey relocated from Perth to Dubai to be closer to Puntland.
The company cut a deal with Middle East Petroleum Services giving it 15 per cent of the oil rights in exchange for access to a team of petroleum experts and funding for wells. MEPS is run by Tasmania's Ken Fellowes, who previously headed high-flying but ultimately failed listed oil explorer Coplex in the late 1990s.
Range also hired an Australian geologist with African experience, Geoff Blackburn, OAM, to lead the minerals exploration team.
Before Range sent its teams in, the Government of the neighbouring nation of Somaliland put out a harsh statement, warning that if the company's teams crossed into disputed border territory it could "jeopardise the peace and stability of the entire Horn of Africa".
Despite that, the initial reports out of Puntland seemed promising. In a release to the ASX in early March, Range noted it had visited sites with either old mines or the potential for new ones filled with coal, lead, silver and gold.
And although the Department of Foreign Affairs and Trade warns against all travel to Puntland and other parts of Somalia and no embassy is maintained by the Australian, American or British governments, Range reported its team had "no difficulty" with access, security or logistics.
"There is not, from a company perspective, a 'violent' border dispute between Puntland and Somaliland," the statement added.
But within a few weeks of that announcement, Somali news websites started to report on a violent dispute - not between Puntland and Somaliland, but between Puntland forces protecting Range operations and a clan living on the border.
On March 29, Reuters said at least six people had died in a mortar battle in the Majayahan village near the Puntland-Somaliland border. The fight was apparently between Puntland security forces and the Warsangeli clan, which has ties to some Somaliland ministers and is known to oppose Range's right to explore in Puntland.
On April 3, the Puntland news website Garowe Online reported that three more people had died when clan militias attacked Puntland security forces protecting a team of Range scientists in the same zinc-rich area.
And on April 9, Garowe Online reported that at least one member of the Puntland militia was killed and five others wounded when a landmine hit a truck near the same village. "Reliable sources" told the website the Warsangeli clan had mined the road as part of its strategy to keep the Puntland militia and Range out of the region.
Range's Povey says it is possible there was an incident with a landmine, although he doesn't have any direct knowledge of it. The Puntland Government warned his exploration team that landmines were a problem in some areas.
But Povey says he wasn't aware of any local infighting. After a site visit last week, he claims Puntland is a great environment for exploration. Range took a team of unarmed risk assessment professionals from Australia along for the ride to produce an independent report on the security situation which has not yet been released.
"We were greeted very warmly," Povey says. "There was no evidence of trouble."
As part of Range's exploration agreement, it is paying the Government $US200,000 a month and has offered to help build an airport in the state's capital, Garowe. "We believe it is a place where it is safe to invest," Povey says. "We've put our money where our mouth is."
Short of ignoring DFAT's travel advisory and visiting the Puntland region, independent confirmation of the supposed battles at Majayahan is difficult to obtain.
But the executive director of Puntland State University in Gorawe, Muhammad Sheikh Hamid, told the Herald that, as far as he knew, at least five people had died in the conflict over mineral rights.
"I think this tribe wanted to get some benefit from the agreement," he said in an email.
The dean of Puntland State University, Abdi Samad Ibrahim Jama, agrees there were some skirmishes between clan and militia forces but adds "the problem is calm now after finalising a proper solution with the local people by the Puntland authorities".
Mohammed Elmi, a resident of the regional capital of Bosasso, Puntland, wrote to a Somali website asking for the Range agreement to be reassessed by the Puntland Government to end the conflict.
"Both forces are mobilising their militias and preparing for war. Apparently it has to do with the team of experts from Range in the area," he said in an email to the Herald earlier this month. "The Governor has been accused of being a corrupt leader who want[s] forcefully to exploit the resources of a country under the customary jurisdiction of the clan that reside there.
"The Warsangeli clan, the clan that resides in the area, does not object to the exploration and extraction of minerals but they insist everything be done with their approval."
Povey toured the area in dispute - about 40 kilometres from Bosasso - as part of his visit to Puntland last week.
He says there are no villages or local inhabitants in the area - simply a mining camp that Bulgarians abandoned about 30 years ago. "It's a hilly, deserted region," he says.
Povey believes as few as 20 people in Puntland actually oppose the Range agreement. "There will always be a small minority that might object for various reasons," he says. "Their motives are often not progress and sometimes just plain money."
Range is expected to release more details of its recent exploration program - perhaps including an update on the political situation - to the ASX today, ending a trading halt it called last Wednesday.
Source: Australia - Sydney Morning Herald