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Frontier spirit embraces risks of south Sudan

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By Javier Blas and William Wallis
Financial Times (UK) 10 jan
There are few regions in Africa as remote and undeveloped as southern
Sudan. Unity state, where Philippe Heilberg says he has secured a huge
tract of arable land, is inaccessible even by south Sudan’s standards.
Aside from AK-47s, it was deprived of most of the trappings of the
modern world. Even a road network that has been under construction since
2005, when a peace agreement ended the long civil war between the
predominately Muslim north and the Christian and animist south of the
country, has yet to reach it. But Unity state does border the White Nile
and its flat, arable land could, with billions of dollars of investment
in irrigation and roads, be transformed into a world-class bread basket.
As commodity prices spiked last year, Gulf countries poured hundreds of
millions of dollars into securing land in the fertile Nile valley
farther north to grow food crops for exporting home.
Mr Heilberg is convinced that demand for land is now gravitating south.
Other experts say investors are scouting out opportunities in the south,
albeit on a far less ambitious scale. That is despite imprecise land
laws and the risk of a new civil war should the oil-rich south vote for
independence in a planned referendum in 2011.
Mr Heilberg has experience in commodities markets on Wall Street and in
Asia. To help him as he looks for opportunities in Africa, he has pulled
together a board at his US-based investment vehicle, Jarch Capital,
which includes Middle East, Africa and security experts with years of
experience at the Pentagon, CIA, White House and state department.
He is of a resurgent class of western businessman drawn to the potential
of Africa’s remaining frontiers, who have been energised by Asia’s
appetite for the continent’s natural resources.
Sudan experts familiar with his business strategy liken him to
buccaneering capitalists such as Sweden’s late Adolph Lundin, who
acquired mining and oil concessions in Congo and Sudan while civil wars
were still raging and turned huge profits when he sold them on.
In both countries, however, legal wrangling has often prevented mineral
concessions from becoming productive. Mr Heilberg has experience of this
problem after being embroiled in a dispute with the south Sudan
government over oil exploration rights also claimed by other companies.
Some experts on Sudan believe his 400,000 hectares will face a similar
fate and that his ultimate strategy is to trade whatever claim he can
sustain over the land to investors with a greater capacity to develop
it. He says the land has great potential for biofuels and food crops and
is looking for joint venture partners.
He insists the law is less important to his deal than the clout he has
bought into by associating with a former warlord, Paulino Matip, whose
family says it owns some of the land in Mayom county, in Unity state.
“I never understood why the oil industry could spend $1bn drilling dry
holes but they do not want to take a single dollar in legal risks,” Mr
Heilberg told the FT.
Mr Matip fought with the Sudan People’s Liberation Movement against the
northern army before gaining notoriety during a bloody civil war episode
when he switched sides to form his own militia, with backing from parts
of his Nuer tribe and the Khartoum regime. “I am sure Paulino has killed
many, but I am sure he done it in protection of his people,” Mr Heilberg
Following the 2005 peace agreement his forces were appeased when he was
brought in as deputy commander in the army of the autonomous south.
Mr Matip’s son Gabriel, who controls the company in which Jarch has
bought a majority stake, said he had negotiated with tribal leaders to
secure access to more land. He said the company also had the agreement
of the ministry of agriculture in south Sudan for the development of the


Written by torit1955

January 14, 2009 at 12:46 pm

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