Eritrea lifts mystery mining banRobin BrombyThe Australian18...

Eritrea lifts mystery mining ban
Robin Bromby
The Australian
18 January 2005

A FOUR-MONTH stint of sitting on its hands has ended for Sub-Sahara Resources - as inexplicably as it began.


The company said yesterday the Eritrean Government had lifted its September ban on foreign exploration in the poor, war-battered country.

Sub-Sahara shares received a boost, rising 1.1c to 6.1c. This followed a bigger gain earlier this month on news that the Eritreans had summoned the group to a meeting in the capital, Asmara.

The stock is now back to where it was on September 2 when Mines Minister Tesai Ghebreselassie ordered all foreign companies to stop work immediately on their exploration projects. No explanation was given.

The embassy in Canberra was caught by surprise: ambassador Asmerom Ma'asho was in the air to Perth to boost Eritrea's profile at a mining conference. Just as surprised was Eritrea's Agriculture Minister, who was in Perth on separate business and also in the dark.

It turns out the cabinet was reviewing its mining law. Despite all the drama, no changes will be made other than lifting the equity the Government can take in any project from 20 to 30 per cent.

Foreign companies will be allowed to start drilling again as if nothing had happened.

These groups had no warning of the stop-work, and 10 days ago received a cordial letter inviting them to meetings in Asmara.

While happy to be back in business, Sub-Sahara has little insight into what has been going on behind government doors in Asmara for four months.

Director Peter Munachen said foreign operators in the fishing and tourism industries had also had been reviewed.

The company went into Eritrea in 2000, buying projects held by US major Phelps Dodge. Despite years of war with Ethiopia, the country has a sound mining law and little corruption.

Another company expecting the all-clear is Canadian miner Sunridge Gold, Sub-Sahara's partner in the Debarwa project, which has turned up high copper and good gold grades. Sunridge is financing the work.