No doubt the un resolution regarding eritrea may be affecting this...

UN Security Council considers Eritrea mining export and foreign investment bans

Proposed UN sanctions based on accusations that Eritrea is funding and arming terrorist groups in neighboring Somalia could prove costly for the country's promising gold mining sector.

Author: Dorothy Kosich
Posted: Wednesday , 19 Oct 2011

RENO, NV -

UN Security Council members Tuesday were scheduled to begin negotiations on a draft UN resolution that would ban imports on Eritrean minerals and also prohibit foreign mining companies from investing in the nation's mining sector.

The proposed resolution has been drafted by Gabon, but faces opposition from some members of the 15-nation Security Council.

Reuters, which obtained a copy of the new draft resolutions, revealed that it says "all states shall prohibit investment by their nationals, persons subject to their jurisdictions and firms incorporated in their territory or subject to their jurisdiction in the extractive industries and mining sectors in Eritrea."

It also calls on all states to prohibit the import of gold and other raw materials from Eritrea, Reuters reported.

In July East African regional block-the Inter Government Authority on Development (IGAD)-called on the African Union and the Security Council to impose more sanctions against Eritrea for what IGAD described as the country's growing destabilizing nature in the Horn of Africa region. IGAD members complained that sanctions imposed last year by the UN Security Council lacked effective implement and unanimously called for "all appropriate measures to ensure that the regime in Asamar stops its destabilization activities..."

The July statement said, "IDAD calls on the AU [African Union] and the UN Security Council to fully implement the existing sanctions and impose additional sanctions on the Eritrean regime especially on those economic and mining sectors that the regime depends on including the Eritrean Diaspora as well as ensuring compliance with previous decisions of the UN."

The term diaspora refers to the Eritreans who have migrated away from the country and are now the single largest forex source for Eritrea. A 2% diaspora tax is paid by Eritreans working aboard. The proposed UN resolution would prohibit the practice.

Eritrea is facing increasing isolation from the international community for its reported subversive activities in war town Somalia. Eritrea is accused of funding and arming the Islamist al-Shabaab and other armed groups in Somalia. Al-Shabaab, a Somalia-based terrorist organization that the U.S. says has links to al-Qaeda, generates between $70 million and $100 million a year in revenue from taxation and extortion in areas under its control, according to the UN report.

The government in Asmara, the capital of Eritrea and the country's largest population center, says the allegations are fabrications cooked up by rival and neighbor Ethiopia.

Somalia officials have argued IGAD's action "will help also to curtail those elements who engaged in subversive acts against the government and detrimental to the stability and security of this nation."

Previously, Eritrea has suspended its IGAD membership and boycotted the African Union in protest of what it claims was the AU's failure to condemn Ethiopia for violations of a peace agreement that ended their 1998-200 conflict over disputed territory. Earlier this year Eritrea re-established its envoy to Ethiopia.

The United States also supports Ethiopia's call for new sanctions after a UN group said Eritrea was behind a plot to stage bomb attacks at the African Union Summit in Addis Ababa, Ethiopia's capital, in January.

Eritrea's most advanced mining project, Canada's Nevsun Resources Bisha is believed to contain gold, copper and zinc. Another Canadian explorer Sunridge Gold has defined four deposits containing copper, zinc, gold and silver resources at its Asmara Project. The country has granted eight exploration licenses for Australia's Chalice Gold Mines at its Zara Project in northern Eritrea.