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Eritrea banks on mines to boost economy

Monday, February 29, 2016 - 01:35

Eritrea is looking to build a mining sector to kick-start its economy. But as Hayley Platt reports it faces a number of challenges, not least falling commodity prices amidst the global economic downturn.

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It's land is rich in minerals. But Eritrea doesn't have a mining industry to speak of. It hopes to change that - kick starting the economy with three new mines. Alem Kibreab is from the Department of Mines. (SOUNDBITE) (English) DIRECTOR-GENERAL OF THE DEPARTMENT OF MINES, ALEM KIBREAB SAYING: "At the moment we have one working mine and the first quarter of this year - 2016 we will have a second mine, which is a gold mine Zara Mining Share Company and we will have two in the pipeline also, which I think will be operational in 2018." They're also hoping to find copper and potash. All of which the government stands to benefit from. It will get a 10 percent stake in any mining ventures - free. And could buy up to 30 percent more. This tiny country of 3.6 million relies heavily on remittances from abroad for foreign exchange. Growth last year came in at just over 2 per cent. (SOUNDBITE) (English) THE DIRECTOR-GENERAL OF THE DEPARTMENT OF MINES, ALEM KIBREAB SAYING: "After these four mines kick off then mining will be a booster to the other economy. After all mining is depletable not a renewable resource, so it works as a kick off for other sectors, economic sectors." Eritrea will need to win investors for the project. Some wary of a new mining industry entering the global market at a time of falling commodity prices. And amid allegations from human rights groups that 'forced labour' has been used in building one of the mines. Something the government denies. ///

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Eritrea banks on mines to boost economy

Monday, February 29, 2016 - 01:35