Eritrea’s minerals: blessing or curse?

By Jenny Vaughan BISHA, Eritrea (AFP) –  In a vast pit of red earth, white stone and green ponds, excavators unearth precious copper in Eritrea's first large scale commercial mine. In its third year of production, Bisha mine

By Jenny Vaughan

BISHA, Eritrea (AFP) –  In a vast pit of red earth, white stone and green ponds, excavators unearth precious copper in Eritrea’s first large scale commercial mine.

In its third year of production, Bisha mine — endowed with gold, copper and zinc — is Eritrea’s first major international investment, and one that promises enormous profit for the impoverished Red Sea state.

Despite criticism by rights groups — who say large scale mining props up a hardline regime accused of a raft of abuses — authorities hope the mine will draw investment in other industries to help boost Eritrea’s otherwise struggling economy.

“The miners are the first people to take big risks with big money,” said Alasdair Smith, a geologist and exploration expert in Eritrea.

“There will be a honeymoon period for the mining industry when they will lead the way and they will have a significant contribution to GDP, and then that will quickly get overtaken by other industries,” added Smith, from New Zealand.

Bisha mine is 60 percent owned by Canada’s Nevsun Resources and 40 percent owned by the Eritrean government, which took a loan from China to finance its initial investment.

The project has attracted major interest from foreign mining companies, with three companies — from Australia, Canada and China — planning on establishing operations for gold and potash in the next two years.

There are also 17 other exploration companies in the country, searching for gold, copper, zinc and potash.

Eritrea’s government insists it is committed to using mining profits to develop other nascent sectors — namely agriculture, fisheries and tourism — in order to avoid the resource curse that plagues other mineral-rich resources in Africa.

It needs it: with a gross national income of $430, Eritrea is one of the world’s poorest nations, according to the World Bank.

“This is going to be a major sector in the Eritrean economy, but from our policy point of view, we would like to make sure that Eritrea does not become a one-sector economy,” said Woldai Futur, Eritrea’s Minister for Investment.

Nevsun reported revenues of $71.1 million in the first quarter of 2013, with Bisha’s general manager Kevin Moxham shrugging off World Bank reports ranking Eritrea as the third worst country out of 185 nations to do business in.

“If you look at Africa and the risk of doing work, the country risk (in Eritrea) in my opinion is much less than anywhere else,” Moxham told AFP, sitting at his office at the mine, 150 kilometres (90 miles) west of Asmara.

“The government is really involved because they want to make it work…they put their money where their mouth is,” he said, adding that he is confident the growth of the sector will boost spin-off industries and provide much-needed employment.

Still, infrastructure is limited, foreign exchange reserve are minimal, and United Nations-imposed sanctions imposed for Eritrea’s alleged backing of regional rebels make it difficult to import much-needed equipment.

But is not without its critics.

Last January, Human Rights Watch accused Nevsun of using forced labour drafted in from a decades-long conscription programme run by Eritrea, claims rejected by Asmara.

Moxham said employees are all are hired willingly.

“Anybody who is employed here has to be released from the military… we have a whole lot of checks and balances,” he said.

But many people in the capital Asmara question how mining revenues are being spent.

“Where?”, said one man when asked whether the government was spending profits wisely.

Residents in Asmara routinely complain of chronic water and electricity shortages in the capital, and say jobs are scarce.

But Bisha employees say they are happy for skills they are learning and a regular salary, which is above the national average.

Local salaries range from $400 to $5,000 at Bisha Mine, where over 90 percent of the 1800 employees are Eritrean.

For Asmerom Habte, 47, his job as a lift operator is not only a key source of income, but a source of national pride.

“I wanted to work here, it is the first gold mine ever in Eritrea,” said the former soldier, standing before his bright yellow machine in the copper pit, adding that his salary of some $500 a month is around seven times more than when he was a soldier.

While employment is an important benefit of the mining sector, Woldai insists that the industry will spur further broader investment, despite economic stagnation blamed on ongoing tensions with arch-foe Ethiopia following a 1998-2000 border war.

“We are passing though difficult times… but our people are united,” he said. “The important thing is that you can see the light at the end of the tunnel. It may be farther than I’d like it to be, but it is there.”

 

aseye.asena@gmail.com

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6 COMMENTS
  • Nahom August 21, 2013

    DIA and his cohort like W.Futur are the only people who can see the light at the end of the tunnel.

  • NEW HOPE ERITREA August 21, 2013

    Quote…..
    ¨But many people in the capital Asmara question how mining revenues are being spent.¨ END OF QUOTE…
    I believe it is being spend on arms to destAbilize Ethiopia ,EPRDF/¨WOYANE¨,….as President Isaias´s agenda has always been to frustrate the ¨ARAB INFESTED¨struggle & rule the real Erthiopia (including the prodigal daughter,Eritrea)..things changed ,Eritrea was given the ¨independence¨..but Papa Isaias does not want to see the demarcation in practice ,on the ground,…as ruling Ethiopia was & still is his agenda ..we the Eritrean people (CONDOMS)..are just disposable objects ,people who fight against our riches & respect in our Ethiopia.
    GULLABLE ,IDENTITY LESS PEOPLE ARE EASY TO MANIPULATE & WILL STILL BE MANUPILATED…….In short ,Papa Isaias has an Enemy called Ethiopian government ,because that is where he wants to be.And his enemity with ¨weyane¨ is who rules Ethiopia ..they (EPRDF/WEYANE¨believe in Ethnic federalism ,and Papa Isaias believes in total control …a mixture of Royal & Communistic…system.
    Isaias has no quarrel with us Eritreans ,he knows we are just brainless Condoms & Isaias wants us to remain as such & we beyond resonable doubt ,we have proven to be RETARDED.

  • erikid August 22, 2013

    It is progress. Watch and drool.

    • Elsa August 22, 2013

      Erikid,
      Time to grow up. There is nothing to watch and drool in Eritrea. What progress? When was the last time you visited Eritrea?

      Big boy, grow up and learn from justice seeking Eritreans.

      AmoKa Elsu

      • Elosateshim August 22, 2013

        Elsa

        eske nezi kol’a aytimelisilu. let him practice how to argue. eta nay kushet geza endiya tezaribo zela. but trust me he will not live it after certain time. hade entay elu tsihifulu nieru meslkei: ”KEY’ABEYE ZISEYEBE or KEYBEKOLE ZIHARERE” hi is dwarf minded opportunist aregit kol’a. what is going in our country is like a drama to him. like what the slaves of Rome were having in the far past. a slave was brought to a stage to fight a beast. those elite of that segment of time were laughing at the dying away human being. the cry and pain of that human being labeled ”slave” is nothing to the elite. they enjoy the cry. Eri kid is also like that. may the cry and pain of the kids in his age at Sina burn him out.

  • Genet August 22, 2013

    I say it is going to be a “curse” for a short time. Then no doubout, it will be a blessing once we come togother; We get rid of the dictator and the useless zombies like the stupid Erikid.

    Stupid Erikid, How can any one “drool” for any thing about Eritrea, when our people are being killed at the hand of most cruel dictator in history? Based on your thought process, you can’t be an Eritrean. You most likely are an Ethiopian who is taking out his/her revenge against Eritreans. THE FLITHY DICTATOR AND YOU, ZOMBIE ARE DROOLING FOR ERITREANS BLOOD LIKE VAMPIRES. DON’T WORRY, SOON WILL BE SUNSHINE IN ERITREA AND FOR OUR PEOPLE. YOU WILL BE TURNED INTO DUST AND ASHES. STUPID ERIKID, HAVE FUN IN THE DARK ERITREA FOR NOW.
    Genet

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