INTRODUCTION TO Eritrea

Eritrea located in North Africa, is a diverse land situated along the southeastern coast of the Red Sea, it is bordered on the east by Djibouti, on the south by Ethiopia and on the west by Sudan. The capital and largest city is Asmara. Its main ports are Massawa and Assab.

Research has shown that Eritrea is host to large deposits of gold, base metals, ferromanganese, granite, marble and limestone. Eritrea is also mined for industrial minerals such as gypsum, salt, kaolin, feldspar and talc.

INVESTMENT OPPORTUNITIES

Interest in Eritrea’s mining sector has increased since investors identified it as a potential source of gold following discoveries along different parts of the Arabian Nubian Shield which makes up more than 60% of the country’s area. Therefore the number of companies exploring for various minerals in Eritrea has been on the increase of late.

The strategy employed for Eritrea’s mining sector is to focus on promoting domestic and foreign direct investment in prospecting, exploration and development.

The Eritrean Government has started a free zone programme to contribute to the development of an internationally competitive business sector in Eritrea by creating an environment in which domestic and foreign investors will be encouraged to invest in exportation activities. The first free zone has been set up at the port of Massawa and is ready to accept investments which contribute to the achievement of the government’s objectives.

EXPLORATION POTENTIAL

There are several geological formations in Eritrea which are prospective for commercially viable mineral deposits. The central and northern highlands, may contain precious metals and minerals of high value such as iron, copper, gold, silver, chromium, zinc, lead, cobalt and nickel. There may also be substantial deposits of oil and gas along the Red Sea coast.

The region of volcanic formations along the Read Sea and Afar rifts may be host to magnesium, barite, high grade granite, mica, asbestos and sulfur. In the western and eastern lowlands there are significant deposits of limestone and high quality green marble, as well as silica sand, potash, kaolin and slate.

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COMPANIES MINING IN Eritrea


LEGISLATION & MINING POLICY OVERVIEW

The Ministry of Energy and Mines has conducted geological surveys of promising sites and indicated a willingness to share the risks associated with prospecting and exploration. Mining laws stipulate the terms and conditions that investors have to fulfill and the environmental requirements to which they are subject.

Eritrea’S ECONOMY

The mining sector only accounts for a very small portion of Eritrea’s economy in terms of foreign earnings.

The Eritrean Government used to be reluctant to invite foreign investors to Eritrea because it lacked the necessary infrastructure to support such investment. However, today the Eritrean government has developed business friendly laws and regulations to stimulate investment in the mining sector.