Eritrea's Mining Industry Starts Rolling

Source:

"It's a very easy and very attractive country to be operating in."

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," said Lester Kemp, managing director of Africa London, one of a handful of foreign companies currently operating i/n 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

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 lot of rocks are exposed at the surface. . .which makes prospecting for minerals very easy," he said.

There are now 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.

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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