Eritrea's Mining Industry Starts RollingSeptember 17, 2009. The...

Eritrea's Mining Industry Starts Rolling
September 17, 2009.

The Media Line Staff.

Eritrea, one of the most insular countries in Africa, has begun to grant exploration rights to foreign mining firms.
Until recently, all mining in the country had been conducted by a government owned company but a desperate need for foreign currency has prompted President Isaias Afewerki to allow foreign companies in.

"I think the future is extremely positive for Eritrea," Lester Kemp told The Media Line, Managing Director of Africa London, one of a handful of foreign companies currently operating in Eritrea. "We first went in there in April 2006 to apply for three prospecting licenses and we had our licenses finally awarded earlier this year. The three licenses were merged into one big license covering 1562 square kilometers [603 square miles]," Kemp said

"The prospecting license is valid for 12 months and then we have to convert the prospecting license into an explorations license. At this early stage we have discovered quite a number of targets, both gold and copper, which we are investigating." Kemp said.

There are both geological and structural advantages to mining in Eritrea, according to Kemp. "It's a very easy and very attractive country to be operating in. A very good aspect is that a lot of rocks are exposed at the surface. If there is not a lot of sand covering up rocks, they can be seen quite clearly, which makes prospecting for minerals very easy," "The authorities in Eritrea are extremely mining friendly and excellent to work with", he added.

There are at present two major gold mining projects underway in Eritrea, Bisha and Zara. The Canadian company Nevsun Resources is developing the Bisha project, and the Australian company Charlie Gold Mines is prospecting the Zara project.

"We merged with Sub-Sahara Resources who owned the Zara Gold project, and we are continuing with those operations," Richard Hacker, company sectary with Charlie Gold Mines, told The Media Line. "It's full steam ahead to develop the Zara gold project which is going through a feasibility study, which we hope will be finished by May 2010, and then we will start producing by the end of 2011," Hacker said.

Following a 30-year guerilla war against Ethiopia, which ended in 1993, Eritrea won independence. The years of war have led Eritrea to become a highly militarized state with a large and expensive army. All Eritreans must serve at least 18 months in the national army. The World Bank estimates that some 320,000 Eritreans are in the military: 1 in every 13 citizens.

The government is entirely controlled by the People's Front for Democracy and Justice, the party of President Afewerki. It has been accused of hindering the development of a private business sector, which might have generated the foreign investment badly needed by the Government.

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