Eritrea: Mining, Minerals and Fuel Resources

Topics Covered

Welcome to Eritrea
Overview of Resources
Industrial Minerals
Metals
Fossil Fuels
Investment
Sources

Welcome to Eritrea

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Eritrea, with a total population of 6,086,495 as of July 2012, is located in Eastern Africa, bordering the Red Sea, between Djibouti and Sudan. The country mostly has climatic conditions spreading from hot and dry desert type climates to a semiarid climate. Eritrea covers a total area of 117,600 sq km2.

The national flag of Eritrea.
Image Credit: CIA Factbook.

Eritrea gained independence in 1993 after a prolonged struggle for almost 30 years. The country’s economy ever since its independence in 1993 has been totally governed by the People's Front for Democracy and Justice, a political party that has been imposing a number of restrictive economic policies in the country.

Following the end of the Ethiopian-Eritrea war in 2000, the government focused on maintaining a stable economic situation in the country by expanding businesses in Eritrea and also hoping to develop a number of international mining projects that will contribute a lot the country’s economy. In 2010, a Canadian mining company started off with its mining operations in Eritrea at the time when foreign mining companies were finding it difficult to work with the Eritrean Government. The country’s GDP as of 2011 was $4.089 billion.

Overview of Resources

Eritrea’s key natural resources include natural gas, gold, copper, oil, zinc and potash. Almost 70% of the country is covered by the greenstone belt of Eritrea that has deposits of precious metals and volcanic massive sulfide (VMS).

Deposits of barite, copper, asbestos, silver, lead, iron ore, potash, zinc, talc and feldspar were exploited in 2010. Domestic requirements were met by importing refined petroleum products in 2010.

The map of Eritrea. Image Credit: CIA Factbook

Industrial Minerals

In 2010, construction of a new cement plant in Eritrea was carried out by the China New Era International Engineering Corp. This new plant at Gedem had the capacity to produce 360,000 t/yr of cement.

The Colluli project was operated by Australia’s South Boulder Mines Ltd. in the Danakil Depression region in 2010. Two shallow potash horizons were discovered in this region’s buried evaporate deposits. According to South Boulder, this project was expected to output potash ranging between 300 and 500 Mt.

Metals

Gold mining in Eritrea was carried out in the VMS deposits in 2010. A treatment plant at the Bisha Mine was commissioned by the Nevsun that hoped to commence with its commercial production in 2011.

A feasibility study on the Debarwa gold, copper, zinc and silver deposit was conducted by Sunridge in 2010. This study was part of the Asmara project in Eritrea. In February 2010, the Harab Suit and the Augaro gold and base-metal projects were obtained by Bermuda’s Sahar Minerals Ltd.

A drilling program was started at the Adi Rassi copper-gold prospect by Sunridge and Chile’s Antofagasta Minerals plc in 2010.

Fossil Fuels

In 2010, Eritrea’s petroleum production and trade was governed by the Minister of Energy and Mines who was in charge of granting petroleum license, enforcing petroleum laws and carrying out petroleum contacts in an orderly manner. The Petroleum Proclamation No. 108 of 2000 controlled the exploration and production of petroleum in Eritrea.

Investment

Eritrea expects to see the development of many mining projects through international investments. A pre-feasibility study on the Emba Derho Zinc-Copper- Gold deposit started in 2011 and this project will focus on exploring a number of mining options that can take place between the next 10 to 14 years. This study will also focus on the options of developing a gold recovery plant.

Recent mining reports also highlighted that the Colluli potash mine has been upgraded by Australia’s South Boulder Mines that will increase the potash output and thus bring in more revenue to uplift the country’s economic situation.

Through these mining developments, Eritrea hopes to see a positive development in its mineral industry besides increasing its gold and copper exploration activities. Exploration for potash is also expected to increase in the future due to an increase in demand for this industrial mineral. Eritrea is also keen on attracting more foreign investments in its mining sector through the country’s liberal mining laws.

Despite all these futuristic developments in the country’s mineral and mining sectors, experts feel that Eritrea’s economic growth rate still largely depends on the government’s ability to solve issues such an unemployment, low skills and illiteracy.

Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.

Sources

http://minerals.usgs.gov/minerals/pubs/country/2010/myb3- 2010-er.pdf

https://www.cia.gov/library/publications/the-world- factbook/geos/er.html

http://www.sunridgegold.com/s/Eritrea.asp

http://www.reuters.com/article/2012/04/16/southbouldermines-eritrea-idUSL6E8FG4HP20120416

http://www.miningreview.com/Eritrea/claims/major/advantage/over/mining/rivals

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