Eritrea country profile


  • Land area about 120,000km2
  • Red Sea coastline 1,200 kms
  • Population approximately 6 million, plus an overseas diaspora of about 1 million.
  • Arid coastal plain, fertile high mountains inland, arid foothills and plains in west.
  • Main rains July-Sept
  • Nine ethic groups and languages.
  • Major language Tigrinya; Arabic and English widely used.
  • Religions: Islam, Christianity.
  • Government: People’s Front for Democracy and Justice, the successor to EPLF.
  • Economy dominated by agriculture, minor industries. Mining increasingly important.
  • Independence from Ethiopia followed 1993 UN supervised referendum.
  • GNP per capita approximately US$1,600 (PPP).
  • Capital: Asmara, population approximately 500,000.
  • Ports: Massawa, supplying Asmara and Assab deep-water port historically supplying Ethiopia.
  • International airport at Asmara

Geology and Mining

In the past 2 years, there have been developments with major implications for Eritrea and its mining industry. 

In mid-2018 the ruling coalition of Ethiopia, headed by new Prime Minister Abiy Ahmed, agreed to implement fully the peace treaty signed with Eritrea in 2000.  This led to reopening of the border between the countries, reinstatement of flights between Addis Ababa and Asmara, and lifting of UN sanctions against Eritrea.  There is consequently a rush of investment interest in Eritrea, including the mining sector.

The geology of Eritrea is highly prospective and largely unexplored. Eritrea lies in the Arabian-Nubian Shield which hosts a number of important Neoproterozoic VMS and early Phanerozoic orogenic gold deposits.  VMS deposits include Bisha (Eritrea), Hassai (Sudan), Jabal Sayid (Saudi Arabia) and Hamama (Egypt).  Important gold deposits in the Shield include Sukari (Egypt) and Zara (Eritrea).

Two mines are currently operating in Eritrea with two more under construction. Bisha Mine, 60 percent owned by Nevsun Resources Ltd, which enjoyed a rich supergene gold and copper cap and is now producing zinc concentrate also has a number of new gold and base metal discoveries in its exploration ground. The Zara gold mine is now 60 percent owned by Shanghai Sfeco Group of China.  The Koka gold mining project, located within the Zara project area in Eritrea and operated by Zara Mining Share Company (ZMSC), started commercial production of gold in 2016.

Sichuan Road & Bridge Mining Investment Development Corp. plans to begin mining next year near the capital, Asmara. The mine, which is expected to produce an estimated 381,000t of copper, 850,000t of zinc, 436,000oz of gold and 11 million ounces of silver over 17 years, was bought for $65 million from Sunridge Gold Corp. Construction of a fourth project, the huge Colluli potash mine (jointly owned by Australia’s Danakali Ltd. and the government), is expected to start later this year.

Investor interest in Eritrea is demonstrated by the successful listing of Danakali Limited on the London Stock Exchange in July 2018 and by the acquisition by Zijin Mining Group in mid-2018 of Nevsun Resources, majority owner of the Bisha Mine, for $1.41bn.

Mining Law

Mining is governed by the Eritrean Mineral Proclamation 1995 and associated tax proclamations.

  • Based on law of Australian Northern Territories.
  • Written in Tigrinya and English.
  • Allows for:
    • Prospecting Licence, valid for one year, not renewable, gives exclusive right to apply for Exploration Licence.
    • Exploration Licence, valid for 3 years, renewable twice for one year with reduction in area, although in practice, ELs have been renewed on an annual basis if adequate work has been done.
    • Mining Licence, valid for 20 years, renewable.
  • Fiscal and Tax regime:
    • Royalty (NSR) of 5% on gold and 3.5% on base metals.
    • Corporate income tax rate of 38%.
    • 100% capital allowances carried forwards.
    • Nominal import taxes (0.5%) on qualifying imports.
    • Employees pay Eritrean income tax, expatriates pay 10% withholding tax.
    • State equity free carry of 10%, through ENAMCO
    • State may purchase an additional 30% equity at an agreed commercial price.