Danakali Needs a Dictator’s Support

Danakali could validly claim to have the best resource development potential of any ASX-listed company - perhaps, as its CEO says, comparable to the Pilbara in 1960. Its biggest investment headwind is its location: Eritrea. CEO Paul Donaldson was at pains to show, in presenting to investors this week, that Eritrea gets a bad rap. Don’t trust Google, he says. There is no corruption. There’s no war with neighbouring Ethiopia. The government is keen to raise living standards and has worked cooperatively to improve infrastructure. Disappointingly, accepting all of that, Donaldson did not mention once in 30 minutes that the government is headed by a 70 year old president who took control forcibly in 1993, abandoned the constitution and refuses elections. One man’s dictatorship is another man’s stable government, until it is time to change. Some of the world’s staunchest democracies are currently fumbling their way to new leaders. How is it going to happen in Eritrea? Answer: no one knows and, right now, no one wants to ask. That’s what makes me nervous about an otherwise outstanding development opportunity.