ON THE crest of its success in cooperating with Canada’s Nevsun Resources Ltd in developing gold at Bisha, Eritrea is intent on doing likewise with China’s SFECO.
Asmara is cultivating its image as a mining-friendly destination by pointing to the legal stability of its mining legislation (dating from 1995) and by being ready in the midst of crisis to lower its partners’ investment commitments.
The government works through the Eritrean National Mining Corp (ENAMCO) which can acquire up to 40% – and pay for the 30% – in a mining project.
Indeed, after Bisha came on line in early 2011 as the first industrial-scale gold mine in Eritrea – it has also been turning out copper since 2013 – ENAMCO has been intent on achieving a double whammy with the Koka gold deposit.
ENAMCO has formed a joint venture (JV) named Zara Mining Share Co with SFECO, a subsidiary of Shanghai Construction Group, for the Koka mine that’s due to start producing [Gold] in the third quarter of this year at a rate of 104,000 oz per annum for seven years.
The project presents quite a challenge because it will involve re-locating inhabitants of Koka valley.
Other Chinese explorers operating in the country such as Beijing Sinoma Mining Investment Ltd., China Africa Huakan Investment Co Ltd., Eritrea China Exploration & Mining Share Co., Hubel Geological & Mining Co. Ltd., Shandong Mining Development Ltd, etc. are keeping a close eye on the situation.
But ENAMCO has also joined up in a JV named Asmara Mining Share Company with Sunridge Gold Corp to work on a number of deposits, such as Emba Derho. A feasibility study has been carried out and targets output of 381,000 tons of copper, 850,000 t of zinc, 436,000 oz of gold and 11 million oz of silver. Mines and energy minister Sebhat Ephrem has retained the IMC/DMT consultancy to do due diligence.
ENAMCO’s next big challenge is to involve potash, with the Eritrea group making its debut on the open-pit Colluli deposit (its partner is South Boulder Mines Ltd) with exceptionally low extraction costs. A pre-feasibility study is to be conducted at the end of February.