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Biddho.com Eritrea - Rising To The Challenges!    

Thursday
Dec 04th
Africa News arrow News arrow Eritrea makes mining a backbone of its national economic rehabilitation
Eritrea makes mining a backbone of its national economic rehabilitation Print E-mail
Written by Frank Jomo   
Friday, 11 January 2008
ImageEritrea wants to become a mining giant. To make good its plans, the government has just issued Vancouver-based Nevsun Resources Limited a mining license for the Bisha mining project.

BLANTYRE - Eight years after the border war between Eritrea and Ethiopia that ruined the economy of both countries, the Eritrean government is resuscitating its mining industry to make the country a mining giant, having the industry play a significant role in the nation's economic rehabilitation.

Minister of Energy and Mining Tesfay Ghebreslasie said the country is endowed with massive mineral resources. Exploration activities conducted in various parts of the country during the last six or seven years confirm that Eritrea is one of the volcanogenic Massive Sulfide (VMS) countries in the world.

In a recent interview with Menesey Magazine, Ghebreslasie said that based on exploration findings, a total of 1.7 billion pounds of zinc, 735 million pounds of copper, 15 million ounces of silver and several million ounces of gold may be exploited in the near future.

Among the areas being exploration is Bisha where Vancouver-based Nevsun Resources Limited (TSX, AMEX: NSU) wants to develop a US$250-million Bisha mine, Eritrea's first new mine since colonial times.

According to Ghebreslasie, the Bisha mining site is expected to yield 1.06 million ounces of gold, 10 million ounces of silver, 747 million pound of copper and more than 1 billion pounds of zinc.

Making good its plans to boost the mining industry, the Eritrean government has just issued a mining license for the Bisha gold and base metals project. Nevsun Resources owns 60% of the project while state-owned Eritrean National Mining Company (ENAMCO) has 40 percent equity.

The issuance of the license is a landmark development for Nevsun whose operations at the site were halted by the government in 2004. The company was only allowed to resume operations in 2005 after Nevsun allowed the government to buy a 30 percent interest in the project, on top of the free 10 percent interest it receives according to the country's law. In November ENAMCO borrowed US$60 million from the China Import-Export Bank to acquire the 30 percent stake.

Image Nevsun says, "The government of Eritrea continues to show its strong support to the redevelopment of mining as an important sector of its national economy."

Production at the Bisha project is planned for 2010. The open-pit operation has a mine life of 10 years. During the first phase, Nevsun project production will average 447,000 ounces of gold yearly. During the second phase, payable copper production should average 173 million pounds annually while during the third phase there would be an estimated production of 218 million pounds of zinc, according to the project feasibility study.

But Eritrea's mining policy might betray its quest of becoming a mining giant. Compared with other emerging mining countries, Eritrea's mining policy is a bit harsh.

According to the Minister of Energy, Eritrean mining proclamation states that every licensed body pays from 3.5 to 5 percent of the total cost of production to the government before hand. After a company pays all expenses, it also pays 38 percent tax on net income to the government. Then the government also gets a payment after all the expenses are covered based on the number of shares it holds.

Other mining companies active in Eritrea include Sino-Eritrea Mining Share Company, a joint venture between ENAMCO and a Chinese company, and Sun Resources and Sub Sahara Resources in Zara, among other companies. 

 

World Class Bisha Gold Deposit

ImageThe management of Nevsun Resources Ltd presented its Bisha project scoping study at a meeting with the Minister of Energy and Mines, Minister of Finance and other officials at the Intercontinental Hotel in Asmara, Eritrea on 6th of December 2005. Mr. Tesfai commended Nevsun Company for its effective works and assured it of the Government's continued cooperation and partnership in "developing the world class Bisha deposit into a producing mine." The latest detailed discussion of the property and its resources can be found "43-101 Technical Report & Preliminary Assessment (PDF)" prepared for Nevsun Resources by AMEC in December 2005.

>> View the latest news releases from Nevsun

 

Comments
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dahlakislands   | 67.204.198.xxx | 2008-01-12 04:19:17
It is always great to hear MY COUNTRY making good headlines . and yes ,ERITREA will be the mining gaint in east africa, no matter what.Frank Jomo says that , " Eritrea's mining policy might betray its quest of becoming a mining giant. Compared with other emerging mining countries, Eritrea's mining policy is a bit harsh .". i want to ask him what's so harsh about paying interest rate.white investors in africa are so used to having things their own way i,now because eritrea refused to undermine it's national mining policy, they are calling us harsh and shit. get a damn life. we don't need to undersell our mineral resoures for whites benefit.all australian and chinese mining companies are willing to work in Eritrea without a single complaint. but american and cana*ian companies make such a fuss about the 10 %.
Betri   | 24.68.180.xxx | 2008-01-12 05:43:53
When they say the mining law is "a bit harsh". Thats cause its harsh for THEM, not US! Whenever I hear a line like that in this sort of context, that means great benefits for us Eritreans.
We're not gonna let them pillage this nation like they're used to everywhere else.
Debessay Gabriel   | 70.187.215.xxx | 2008-01-12 18:22:38
When they got all the free labor by being SLAVE master, when the stole all the raw materials by being clonial masters,when they are still pillaging & exploiting the world through their cunning and being the greatest hustlers in history of mankind, they never, ever said it was "a bit harsh" to put it mildly. Eritrea is on the right course on doing business with the rest of the world.
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