From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Thu Feb 04 2010 - 17:52:49 EST
Poor Eritreans increasingly joining gold rush
Thu Feb 4, 2010 11:11am GMT
* High gold price encourages villagers to mine
* Some artisanal miners use mercury to extract gold
By Jeremy Clarke
ASMARA, Feb 4 (Reuters) - More than a dozen foreign mining firms are now
working in Eritrea, but poor villagers in the Red Sea state's remote
lowlands are also increasingly using their bare hands to claim some of the
riches.
The nation is on the brink of a mining surge that could boost its
agriculture-based economy, which has suffered from irregular rains and the
global downturn, while aid agencies say Eritrea's poor suffer widespread
hunger and malnutrition.
Experts say the country's impending mining boom will challenge oil-rich
neighbours to make it easier for foreign firms to prospect across a large
geological structure in the region rich in base metals and gold.
Gold, copper and zinc are the main attraction for foreign explorers, and
licenses are held by companies from Australia, Britain, Canada, China and
Libya.
Asmara holds a significant stake in the projects, but the most advanced
mine, run by Canada's Nevsun Resources Ltd, will not begin production until
late this year, and Asmara is unlikely to see a profit until 2012 at the
earliest.
However, some of Eritrea's poorest people are already cashing in on the
nation's vast mineral potential, working in family groups to collect rocks
and crush them by hand.
"The price of gold is so high at the moment that if these people, who are so
poor, can find just one gram per month it is equivalent to the wage paid for
national service," Tucker Barrie, an economic geologist and regional expert,
told Reuters.
"But you can find one gram in a day if you are lucky."
Gold has been on a roll as investors buy the precious metal as a hedge
against inflation although it slipped towards $1,100 an ounce on Thursday
from $1,124.45 on Wednesday.
USING MERCURY
National service is mandatory for young Eritreans, and when someone will be
granted "demobilization" is often unknown. Some Eritreans spend most of
their adult lives in national service, whether in the military, building
roads or working in cafes.
Mining company officials say the groups of impoverished Eritreans who search
for gold on their licences use primitive and often unconventional methods.
"Every day on site I see local Eritreans working in groups, men and women,"
Timothy Strong, Eritrea manager for British company London Africa, told
Reuters. "They use one rock to crush, and the base of their sandals to pan
for the gold."
The dangers of rudimentary, artisanal mining are well known, where no safety
standards are enforced and children carry piles of rocks between deep
vertical pits.
"In the more advanced areas they also use mercury to extract the gold from
the rock, which kills local wildlife, and in an agricultural area it gets
into the food source. It also burns your skin and the fumes send you crazy,"
Strong said.
Industry officials insist the artisanal mining is not in conflict with the
big foreign companies, which use modern industrial methods alongside the
basic, local extraction.
"Although artisan mining on sites licensed to companies is not technically
legitimate, it is much wiser to build a good relationship with communities,"
Strong said.
"If you totally disenfranchise local villagers -- apart from being immoral
-- you leave your project open to sabotage. We help on our site. We give
water and other provisions."
Other than the small-scale artisanal mining and some minor extraction by
Italians during the colonial era, Eritrea's mining potential is largely
unexploited. (Editing by Daniel Wallis and James Jukwey)
C Thomson Reuters 2010 All rights reserved
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