Asmara, Eritrea — MININGREVIEW.COM — 03 February 2010 – An impending mining boom in Eritrea will challenge oil-rich neighbours to make it easier for foreign companies to prospect across a massive geological structure in the region which is rich in base metals and gold.
Making this prediction here, analysts and industry experts pointed out that Eritrea had set the government’s stake in any mining project at 10% in 2008 with an option to buy a further 30% “’ a small claim compared to other countries in the area like Egypt which mandates a 50% stake, or Sudan at 60%.
These relatively liberal mining terms have led more than a dozen foreign companies to obtain licences to explore in Eritrea. Analysts expect this trend to accelerate dramatically in the next five years and to provide a lifeline for the impoverished economy.
Existing dvanced projects are at Bisha, run by Canada’s Nevsun Resources Limited, with gold production expected to start by the end of the year; and at Zara, run by Australia’s Chalice Gold Mines and expected to start producing a year later.
“In the next ten years other nations in the region will look at Eritrea’s mining boom and they will want in. They will relax their laws and it will become a regional boom,” Eritrea manager for British company London Africa Timothy Strong told Reuters.
“If you look at the geography, Eritrea is a relatively small nation compared to African giants Sudan and Egypt, but it has many more foreign mining companies than the others combined,” he said.