Investing in DR Congo, Africa

Tom Dyson - Tue 25 Apr, 2006

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

Investing in DR Congo, Africa

The DR Congo has hit rock bottom and it’s time to pile in.

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

After all, isn’t Central Africa in a shambles?

A horrific war - the deadliest 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?

Investing in DR Congo, Africa: Investment opportunities

We believe the best investment opportunities are always found where no one else is looking. The 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.

Investing in DR Congo, Africa: Foreign money pouring into Africa

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, as well as investment opportunities.

Investing in DR Congo, Africa: Mining stocks

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...


Good Investing,

Tom Dyson
for The Daily Reckoning

P.S. The famine in Africa is an absolute tragedy. It is not our intention to belittle this disaster by associating it with investments and profit. And I hope the mining companies I uncover are not exploiting desperate people. I must travel to Africa to make sure.
I’ll still give you all the evidence and moneymaking ideas I can, but only you can decide if these investments are ethical or not.

By drawing attention to this crisis – and sending money there – I can only hope we’re doing the right thing.

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