November 6, 2006 –
No, you aren’t having déjà vu. It’s the topic that just keeps producing good investment opportunities. From natural gas and oil reserves, to diamonds and gold and uranium mineral resources, now this — the first new shipping corridor from Asia to Europe in over 100 years that will also drastically reduce shipping times.
But first, let’s start with a little historical perspective. In 1903, the United States engineered a revolution in Columbia in order to set up an independent Republic of Panama. After they accomplished this, the U.S. named themselves owner of the strategic Panama Canal “in perpetuity” and established military bases in Panama to ensure their control of these strategic waters. This situation lasted for almost ¾ of a century until the canal lost its strategic military importance and the U.S. returned its control to Panama.
Why is this important to know? Because with the melting of the Arctic ice, a very important strategic shipping lane is opening up to sea vessels — a path that would shorten the current shipping distance between Asia and Europe that passes through, you guessed it — the Panama canal — by 5,000 kilometers. The U.S. has already stated their official lane regarding these new shipping lanes. Despite Canadian sovereignty of the Arctic north, the U.S. has stated that they intend to use this new shipping lane regardless of Canadian consent. However, some of these shipping lanes, with sufficient melting, will fall outside of the legal jurisdiction of Canadian territorial waters so this contention may very well be moot.
However, an equally large, if not larger point of contention, will be the claim to the mineral and oil reserves that lie underneath these waters. Canada claims that their exclusive economic zone which gives them sole rights to exploration extends 200 nautical miles from their coastline. This claim is being disputed by the United States, and perhaps other countries as well. So just as the U.S. seized a strategic military passageway in 1903, you can be sure that claims to this strategic Arctic passageway will be hotly contested today.
These two developments are well worth keeping an eye on. If one international shipping/freight company dominates this new passageway, it will be certain to profit hugely. Furthermore, whatever companies win the lion’s share of exploration rights in this area, based upon speculation alone, are sure to see phenomenal price appreciation.
These are exactly the below the radar types of opportunities that we at maalamalama seek to profit from many months, and sometimes even years, before the general public hears about them. And the specifics of such opportunities are exactly what we will discuss in our soon to be launched comprehensive website. So stay tuned for more details.
