Identifier
Created
Classification
Origin
09ASMARA195
2009-06-25 12:29:00
CONFIDENTIAL
Embassy Asmara
Cable title:
CHINESE MINING WOES IN ERITREA
how-toP 251229Z JUN 09 FM AMEMBASSY ASMARA TO SECSTATE WASHDC PRIORITY 0337 INFO IGAD COLLECTIVE AMEMBASSY BEIJING AMCONSUL HONG KONG AMCONSUL SHANGHAI DIA WASHDC CIA WASHDC NSC WASHDC SECDEF WASHDC CDR USCENTCOM MACDILL AFB FL JICCENT MACDILL AFB FL CJTF-HOA J2X CAMP LEMONIER DJ HQ USAFRICOM STUTTGART GE COMUSNAVCENT
C O N F I D E N T I A L ASMARA 000195
E.O. 12958: DECL: 06/25/2019
TAGS: EMIN ECON PINS PREL ER CH
SUBJECT: CHINESE MINING WOES IN ERITREA
REF: ASMARA 168
Classified By: Ambassador Ronald K. McMullen for reason 1.4(d)
C O N F I D E N T I A L ASMARA 000195
E.O. 12958: DECL: 06/25/2019
TAGS: EMIN ECON PINS PREL ER CH
SUBJECT: CHINESE MINING WOES IN ERITREA
REF: ASMARA 168
Classified By: Ambassador Ronald K. McMullen for reason 1.4(d)
1. (C) LOWERED CHINESE EXPECTATIONS: The Chinese mining
company "Eritrea-China Exploration and Mining Company"
(ECEM),one of four Chinese mining or exploration companies
operating in Eritrea, has run into substantial problems and
is pessimistic about its prospects, according to a
well-placed Chinese source in Asmara. Logistical nightmares,
security concerns, and technical problems have combined to
dampen Chinese enthusiasm about mineral prospects here.
2. (C) LOGISTICS, SECURITY, GEOLOGY: ECEM has taken over two
old Egyptian-Italian gold mines near Awgara, situated 30
miles west of Badme, in Eritrea's western lowlands. Getting
workers, supplies, and equipment to this isolated location
has proven more difficult than expected, according to the
Chinese source. One logistics base was reportedly trashed by
migrating elephants. Further, the local security situation
is reportedly dicey; the residence of the Eritrean district
administrator has twice been attacked with rocket-propelled
grenades by unknown assailants in recent months. As a
result, the Eritrean army has assigned a unit of infantry to
help protect the Chinese mining operation. Further, the
"rocks were harder than expected and broke the machinery,"
resulting in the subcontracting of some technical work to a
seasoned Canadian firm, this source continued.
3. (C) CHINESE INTEREST IN BISHA: Chinese commercial banks
have lent the government of Eritrea $25m with which to make
the down payment on an optional 30% equity stake in Eritrea's
most advanced and promising mining venture, Nevsun's Bisha
mine. The Chinese source claimed Eritrea originally sought
soft loans or grants from the government of China to purchase
this equity stake, but was rebuffed. While Bisha's prospects
remain bright, the poor overall situation in Eritrea
reportedly has caused concern in some Chinese circles about
the soundness of this loan. The Chinese interlocutor
commented that the two new Chinese exploration companies
operating in Eritrea (ref) are not serious players.
MCMULLEN
E.O. 12958: DECL: 06/25/2019
TAGS: EMIN ECON PINS PREL ER CH
SUBJECT: CHINESE MINING WOES IN ERITREA
REF: ASMARA 168
Classified By: Ambassador Ronald K. McMullen for reason 1.4(d)
1. (C) LOWERED CHINESE EXPECTATIONS: The Chinese mining
company "Eritrea-China Exploration and Mining Company"
(ECEM),one of four Chinese mining or exploration companies
operating in Eritrea, has run into substantial problems and
is pessimistic about its prospects, according to a
well-placed Chinese source in Asmara. Logistical nightmares,
security concerns, and technical problems have combined to
dampen Chinese enthusiasm about mineral prospects here.
2. (C) LOGISTICS, SECURITY, GEOLOGY: ECEM has taken over two
old Egyptian-Italian gold mines near Awgara, situated 30
miles west of Badme, in Eritrea's western lowlands. Getting
workers, supplies, and equipment to this isolated location
has proven more difficult than expected, according to the
Chinese source. One logistics base was reportedly trashed by
migrating elephants. Further, the local security situation
is reportedly dicey; the residence of the Eritrean district
administrator has twice been attacked with rocket-propelled
grenades by unknown assailants in recent months. As a
result, the Eritrean army has assigned a unit of infantry to
help protect the Chinese mining operation. Further, the
"rocks were harder than expected and broke the machinery,"
resulting in the subcontracting of some technical work to a
seasoned Canadian firm, this source continued.
3. (C) CHINESE INTEREST IN BISHA: Chinese commercial banks
have lent the government of Eritrea $25m with which to make
the down payment on an optional 30% equity stake in Eritrea's
most advanced and promising mining venture, Nevsun's Bisha
mine. The Chinese source claimed Eritrea originally sought
soft loans or grants from the government of China to purchase
this equity stake, but was rebuffed. While Bisha's prospects
remain bright, the poor overall situation in Eritrea
reportedly has caused concern in some Chinese circles about
the soundness of this loan. The Chinese interlocutor
commented that the two new Chinese exploration companies
operating in Eritrea (ref) are not serious players.
MCMULLEN