Asmara, Eritrea — MININGREVIEW.COM — 22 May 2009 – The government of Eritrea has revealed that eight more foreign companies have entered the country’s mining sector with new exploration licences in what is seen as the verge of a minerals boom that could drive the needy Eritrean economy.
Revealing this in an interview with Reuters here, Energy and Mines Ministry director general of mines Alem Kibreab, added that the Horn of Africa nation’s first and flagship project – the Bisha mine – should start producing gold by the third quarter of 2010.
“Despite its small size, Eritrea is going to be on the map of mining countries,” he said, adding that reserves identified so far were only the ‘tip of the iceberg.’
Reuters reports that foreign miners agree on the potential, but Eritrea insists the sector must be developed slowly and carefully to prevent the so-called ‘resources curse’ where oil and minerals have spawned corruption and violence elsewhere in Africa.
“A new round of licences awarded earlier this year has brought the total number of foreign companies exploring or about to explore in Eritrea to 14,” Alem added.
He named the newcomers as Britain’s Andiamo Exploration and London Africa; China’s Land and Energy and Zhongchang Mining; the Eritrean-Libyan Mining Share; Australia’s South Boulder and Gippsland; and India’s Spice Minerals. Gold, copper, zinc and potash were the main interests.
Eritrea’s most advanced project, run by Canada’s Nevsun Resources Limited with a 40% stake for the state, is Bisha. Its 27 million tonnes of ore are believed to contain 1 million ounces of gold, 700-800 million lbs of copper and 1 billion lbs of zinc.
“We strongly believe that by the third quarter of 2010, we will start production,” Alem said.
“For the first two-and-a-half years it will produce gold, with an expected output of 450 000 ounces per annum. Then it will turn to copper, followed by zinc in a probable 10-year life.”