Identifier
Created
Classification
Origin
09ASMARA89
2009-03-16 13:37:00
CONFIDENTIAL
Embassy Asmara
Cable title:
ERITREA'S MINING SECTOR GENERATING INTEREST
how-toP 161337Z MAR 09 FM AMEMBASSY ASMARA TO SECSTATE WASHDC PRIORITY 0216 INFO IGAD COLLECTIVE AMEMBASSY BERLIN CIA WASHDC DIA 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 000089
DEPARTMENT FOR AF/EX AND AF/E
E.O. 12958: DECL: 03/09/2019
TAGS: EMIN ECON EFIN PREL ER
SUBJECT: ERITREA'S MINING SECTOR GENERATING INTEREST
Classified By: Ambassador Ronald K. McMullen for reson 1.4(d)
C O N F I D E N T I A L ASMARA 000089
DEPARTMENT FOR AF/EX AND AF/E
E.O. 12958: DECL: 03/09/2019
TAGS: EMIN ECON EFIN PREL ER
SUBJECT: ERITREA'S MINING SECTOR GENERATING INTEREST
Classified By: Ambassador Ronald K. McMullen for reson 1.4(d)
1. (SBU) MORE FOREIGN PARTNERS
--------------
The government of Eritrea has notified seven foreign mining
companies that they will be awarded mineral exploration
licenses contingent on final contract negotiations in
mid-April. Th%kaQQJ]q (3),and Australia (1). Eritrea denied
several exploration license applications, including one from
an American company and an additional one from Nevsun, the
Vancouver-based company exploiting the large Bisha gold,
copper, and zinc deposit.
2. (C) GERMAN BANKS LOOKING AT BISHA FINANCING
-------------- -
German commercial bankers were in Eritrea in early March to
assess the potential for a very large loan to enable the
government of Eritrea to purchase equity in the Bisha mine, a
billion dollar venture located in western Eritrea. Chinese
banks provided Eritrea financing for the initial down payment
of $25m on a 30% equity option; the German financing, if it
materializes, would enable Eritrea to complete the purchase.
The German ambassador to Eritrea (strictly protect) said the
German government was looking at providing backing to the
potential commercial loan.
3. (C) BISHA FALLING BEHIND SCHEDULE
--------------
It is unlikely that the Canadian-Eritrean joint venture will
be able to begin extraction operations at Bisha in 2010 as
originally planned, according to the British manager of
another foreign mining firm in Eritrea. He said
uncertainties in the international capital markets, along
with bureaucratic and logistical delays, would set back the
commencement of mining for one year, he judged. He noted
with some jealousy that Nevsun was "sitting on about a
billion ounces of gold," and had wisely negotiated a
front-loaded cost-recovery schedule. The mining executive
also noted that this meant Eritrea would likely see nothing
but minor revenue inflows from mining "until 2013 or beyond."
MCMULLEN
DEPARTMENT FOR AF/EX AND AF/E
E.O. 12958: DECL: 03/09/2019
TAGS: EMIN ECON EFIN PREL ER
SUBJECT: ERITREA'S MINING SECTOR GENERATING INTEREST
Classified By: Ambassador Ronald K. McMullen for reson 1.4(d)
1. (SBU) MORE FOREIGN PARTNERS
--------------
The government of Eritrea has notified seven foreign mining
companies that they will be awarded mineral exploration
licenses contingent on final contract negotiations in
mid-April. Th%kaQQJ]q (3),and Australia (1). Eritrea denied
several exploration license applications, including one from
an American company and an additional one from Nevsun, the
Vancouver-based company exploiting the large Bisha gold,
copper, and zinc deposit.
2. (C) GERMAN BANKS LOOKING AT BISHA FINANCING
-------------- -
German commercial bankers were in Eritrea in early March to
assess the potential for a very large loan to enable the
government of Eritrea to purchase equity in the Bisha mine, a
billion dollar venture located in western Eritrea. Chinese
banks provided Eritrea financing for the initial down payment
of $25m on a 30% equity option; the German financing, if it
materializes, would enable Eritrea to complete the purchase.
The German ambassador to Eritrea (strictly protect) said the
German government was looking at providing backing to the
potential commercial loan.
3. (C) BISHA FALLING BEHIND SCHEDULE
--------------
It is unlikely that the Canadian-Eritrean joint venture will
be able to begin extraction operations at Bisha in 2010 as
originally planned, according to the British manager of
another foreign mining firm in Eritrea. He said
uncertainties in the international capital markets, along
with bureaucratic and logistical delays, would set back the
commencement of mining for one year, he judged. He noted
with some jealousy that Nevsun was "sitting on about a
billion ounces of gold," and had wisely negotiated a
front-loaded cost-recovery schedule. The mining executive
also noted that this meant Eritrea would likely see nothing
but minor revenue inflows from mining "until 2013 or beyond."
MCMULLEN