Mining: Eritrea digs deep for jobs – by Mark Anderson (The Africa Report – March 31, 2016)

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Eritrea’s hobbled economy will get a boost when new gold, copper and zinc mines begin production. Despite the commodity crisis, the government is banking on the sector to provide much-needed jobs.

The evening sun casts a glow over the Bisha mine as the last dump trucks of the day climb up gravel tracks on their way to a refinery, where copper and zinc ore will be processed and shipped off for sale on the world market. This is Eritrea’s first operational mine and the government hopes that three more will jump-start the economy when they come online in the next two years.

Bisha has contributed more than $755m to the Eritrean economy since it began production in February 2011, according to Nevsun Resources, the Canadian mining company that owns 60% of the mine.

While the government says that much of this revenue goes towards operational costs and debt repayments, there is little doubt that more mines would offer a dramatic lift to Eritrea’s economy, which is struggling under the burden of mass migration, UN sanctions and diplomatic isolation.

The potential role for mining to help spur Eritrea’s economy is not hard to see. The Eritrean National Mining Corporation (Enamco) gets an automatic 10% stake in every mining project, as well as the option to buy an additional 30% share, as per the Western Australian mining code, on which Eritrea based its mining laws. Eritrean state-owned companies, mainly Segen Construction Company, have also earned money building roads and staff housing from the mines.

Alem Kibreab, the director general of Eritrea’s energy and mines ministry, tells The Africa Report: “The contribution that mining will make to the Eritrean economy will be tremendous. If you have four mines running and if there’s a good price of metal at that time, then the contribution will be really significant.”

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