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The Scramble for DR Congo's Mineral Wealth

By Tom Dyson, publisher, The Palm Beach Letter
Friday, April 21, 2006

We first covered the DR Congo in the April 4th edition of DailyWealth.

“The DR Congo has hit rock bottom,” we said, “and it’s time to pile in.”

Some readers may have thought our recommendation of the DR Congo was crazy.

After all, isn’t Central Africa in shambles?

A horrific war - the dealiest since World War II - has just ended. Four million people were killed. Millions more were mutilated, tortured and intentionally infected with HIV.

The area is riddled with landmines. There’s no money. Regional governments are corrupt and the whole area is crawling with rebel soldiers just waiting to get rowdy. Sure, the region is rich in natural resources, but this is a curse. Natural resources encourage more corruption and fighting.

But wait. There’s more...

A severe famine has descended on Central and East Africa. In some places, it hasn’t rained for three years. Now, 38,000,000 people are starving. The crisis is centered on Sudan, Kenya, Zimbabwe, Uganda and DR Congo.

You’d think DR Congo would always have plenty of food.  It’s the wettest and most fertile nation on the planet. But according to research by the UN Food and Agriculture Organization, in DR Congo, man-made causes are to blame. These include conflict, poor governance, and HIV/Aids.

Who in their right mind would invest in the Democratic Republic of Congo?

Your contrarian editors at DailyWealth!

We believe the best investment opportunities are always found where no one else is looking. The U.S. media portrays Africa as a bloodbath. Chaos is everywhere. Investors wouldn’t even touch Africa with their spare change.

Hold on. What’s this?

Five out of the 10 fastest growing economies in the world are in Africa, including the world’s best performing stock market in 2005: Egypt. Its stock market gained over 165% last year.

Foreign money is pouring into Africa. China is a great example. “During the 1990s Sino-African trade grew by 700%,” says a French news service, “and since the first China-Africa Forum in Beijing in 2000, more than 40 agreements have been signed, doubling trade to more than $20 billion over the four years to the end of 2004.”

According to Le Monde Diplomatique “the 674 Chinese state companies involved in Africa have invested not only in booming sectors such as mines, fishing, precious woods and telecommunications, but also in others that the West has neglected, even abandoned, as less profitable.”

Some of that money will soon find its way into the DR Congo...

For the last three weeks, I’ve read everything I can find on the DR Congo. I’ve even scoured ten thousand stocks on the US and Canadian exchanges looking for exposure to DR Congo.

I found seven pure play mining stocks. They own some of the world’s premier mineral deposits, yet they trade at super cheap multiples.

And later this summer, I will travel to DR Congo to meet with these mining companies and investigate their deposits.

I hope I’m not too late. The opportunities are already starting to leak into the international press...

A BBC article, released two days ago, confirms our theories:

Scramble for DR Congo's mineral wealth,” reads the headline.

The article continues: “A scramble for minerals has brought foreign money into the Democratic Republic of Congo... Much of the foreign money here comes from American, Canadian, European and South African mining companies, keen to get their hands on some of DR Congo's vast mineral reserves of gold, diamonds, cobalt, copper and coltan, which is used in mobile phones.”

I sense an opportunity here for outstanding gains. But we must move fast. Rest assured, as soon as I have all the facts and details – including specific names - you’ll be the first to know...

Good Investing,

Tom Dyson

Market Notes


Few commodity markets have seen such a spectacular correction as natural gas recently…

Take a look at today’s chart.  “Natty” has suffered a huge decline from its 2005 highs near $15, and has found a floor in the $7 area.  We can thank the warmest winter in a century for the drop.

Now that crude oil is soaring, natural gas is dirt cheap relative to oil. If you’re looking for a bargain energy investment, DailyWealth says look at natural gas… 

Income investors can check out San Juan Basin Royalty Trust (SJT).  For a walk on the wild side, Russian gas giant Gazprom fills the bill.

An energy bargain? The past 5 years in Natural Gas:

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