* Original draft would have banned mining investment
* Eritrea president invited to address council on Monday
* UN says Eritrea supports Somali Islamists, Asmara denies
By Patrick Worsnip
UNITED NATIONS, Dec 2 (Reuters) - A resolution tightening sanctions on Eritrea, expected to be passed by the U.N. Security Council next week, has been watered down and no longer bans investment in the country’s promising mining sector.
In an unusual arrangement, Eritrean President Isaias Afewerki has been invited to address the council on Monday morning but not to take part in a session in the afternoon scheduled to pass the resolution, diplomats said on Friday.
But there were conflicting reports on whether Isaias got a U.S. visa to come to New York. It was unclear whether he would attend the council on Monday or whether the debate and vote on the resolution would be held then or later in the week.
The original draft of the resolution, circulated by Gabon in October, would have banned foreign firms from investing in Eritrea’s mining industry, outlawed imports of its minerals and sought to block payment of a tax Eritrea puts on remittances from its nationals abroad.
The measures add to existing sanctions, including an arms embargo, passed against the Horn of Africa state two years ago in retaliation for its alleged support of Islamist rebels in Somalia. Eritrea denies the allegation.
The latest version of the text, obtained by Reuters, simply requires countries to make their companies involved in mining in Eritrea exercise “vigilance” to ensure funds derived from the sector are not used to destabilize the region.
On remittances, the draft calls on states to act to ensure Eritrea ceases “using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals.” It also “condemns” Eritrea for using a remittance tax to fund mischief in the Horn of Africa.
Eritrea is seen to be on the brink of a minerals boom that could revive its struggling economy, while remittances it gets from its large diaspora in the West and Middle East are its biggest source of foreign exchange.
The country’s most advanced mining project, Bisha, believed to contain gold, copper and zinc, is run by Canada’s Nevsun Resources Ltd. Earlier this year, Eritrea granted Australia’s Chalice Gold Mines two new exploration licenses in a nearby location.
The push for fresh sanctions follows a report by a U.N. monitoring group in July that found Eritrea continued to provide political, financial, training and logistical support to al Shabaab and other armed groups in Somalia.
Eritrea’s U.N. Ambassador Araya Desta told Reuters the allegations were “ridiculous” and the draft resolution “outrageous.”
The Inter Governmental Authority on Development, or IGAD, which groups seven East African states, called in July for more sanctions to hit the Eritrean mining sector and remittances.
Diplomats said Russia and China opposed such sanctions and that some European countries and the United States also felt the original draft was too tough and could penalize the Eritrean people.
Eritrea has blamed its rival Ethiopia, from which it split away in 1993, for the sanctions drive.
Eritrea asked in October that Isaias be allowed to address the council to express his opposition to sanctions. The 15-nation body has been discussing the request since then and finally issued an invitation this week.
Asmara responded that Monday was too soon and requested a delay. Diplomats told Reuters the United States wanted the meeting to go ahead on Monday but China, Russia and South Africa were proposing a two-day delay to allow Isaias to come.
Russian Ambassador Vitaly Churkin told reporters Moscow still had reservations about aspects of the resolution but he did not suggest it would not go through.
Diplomats said officials from other countries in the region that are not on the council - possibly including Ethiopia, Kenya, Uganda and Djibouti - were also expected to address the council on the issue next week. (Additional reporting by Louis Charbonneau at the United Nations and Aaron Maasho in Addis Ababa; Editing by John O’Callaghan)