HomeEast AfricaMore mining exploration likely in Eritrea

More mining exploration likely in Eritrea

The world class Bisha
gold deposit in Eritrea
Asmara, Eritrea — MININGREVIEW.COM — 19 May 2008 – Eritrea is to decide this year on five more applications for mining exploration licences from companies in South Africa, Canada and China.
Reporting from here, Reuters quoted energy and mines minister Tesfai Ghebreselassie as saying: “The interest is very good, from many quarters." He added that decisions on the mining applications would be taken soon – “certainly before the end of this year.”

He did not name the five new applicants interested in becoming part of the gold-rich nation’s fledgling minerals industry on the Horn of Africa. “If their licences are approved, they will join six other companies from Canada, China and Australia already exploring for gold and industrial metals in Eritrea,” he said.

Tesfai also reassured investors there would be no repeat of the temporary freeze on mining work that occurred in 2004.

“That was a one-off, exceptional situation,” he claimed, explaining the halt had been to allow Eritrea time to develop regulations to buy an extra 10% government stake in all projects. Current mining laws give Eritrea the right to a 10% free stake in mining ventures, and a further 30% purchased at market prices.

“The country’s most advanced project – the Bisha gold project run by Canada’s Nevsun Resources Ltd – should start producing by the end of 2009,” the minister said. Nevsun expects its Bisha project to produce around 1 Moz of gold, 750 M lbs of copper, and 1.1 B lbs of zinc over a 10-year life.

Tesfai said Eritrea had made a US$20 million (R150 million) advance payment for a 40% stake in Bisha, and was working out what participation it would have in other projects. “We want the first contract with Nevsun to be a model. Both parties have to be comfortable,” he insisted.