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The
Emergence of Eritrea as a Mining State: A Mixture of Rewards and Challenges
By Kalekristos Zerisenay
Nov 27, 2007, 5:00pm
For the
last few years, several mining companies have been involved in mineral
exploration in Eritrea. The companies proved the existence of huge mineral
deposits especially around Bisha and Asmara. Indeed, the Bisha Gold Mine
Project is heading towards production possibly in 2009.
The emergence of Eritrea as a mining state has both rewards and challenges.
It has rewards in the sense that mining would enable us to lessen our
dependence on remittances and agriculture for foreign exchange and create a
more diversified economy. But this is not a phenomenon that we can take for
granted. Unless handled wisely, and its contribution is kept balanced in
comparison with other sectors in the national economy, mining could slow down
our economy. In many cases Third World countries have developed a tendency
towards almost total dependence on mineral exports, and this is an experience
that we should not follow.
If mining projects are managed properly and resources are allocated fairly,
there is no doubt that mining would impact Eritrean economy positively. Our
country will earn hundreds of millions of dollars from exports and create
employment opportunities. Equally important, the growth of this industry
would enhance Eritrea’s political and diplomatic leverage in international
relations. Yet, mineral exports, should by no means be substitutes for
agriculture, manufacture and other sectors.
Despite its limited role in earning foreign exchange, agriculture continues
to dominate Eritrea’s economy and the life of the majority of its population.
As such, any attempt that undermines the importance of agriculture will only
endanger the life of Eritreans and the country’s economy. This does not mean,
however, that the proportion of the population that is involved in
agriculture should continue to be as big as it is today. Rather, as minerals
are finite resources, the transformation of farmers into mine workers would
not guarantee sustainable development.
The challenges that come with mining are: environmental degradation, the
tendency to heavily rely on mineral exports, and displacement of communities
from their villages and farms.
Mining is environmentally unfriendly. After a large scale mining, landscape
devastation is a typical occurrence that stays on for years. The land and
rivers around and beyond the mining area get polluted due to acidic elements
leaking from mining activities and the life of millions of people is
endangered. In many developing countries, the companies that have enriched
themselves through this destruction are not held accountable for mitigating
it. To minimize this problem, the government of Eritrea needs to introduce
strict laws that prohibit careless mining activity and should also require
mining companies to pay the expenses for water treatment and other safety
measures.
Another challenge, which is mostly self-created, is developing dependence on
mineral exports and undermining the role of the other sectors in the economy.
Studies show that some countries depend on mineral exports to earn foreign
exchanges and leave other sectors weak. This tendency, which economists call
“the Dutch Disease”, is the hardest to avoid.
Solving the problems of farming and herding communities that are displaced
from their lands due to mining is also a social problem that requires
solution. In many parts of Africa, the fate of these communities is often
overlooked, as there is no preferential treatment that directly or indirectly
compensates their loss of land.
Nevertheless, Eritrea can avoid the above-mentioned challenging problems.
Being a new state with the opportunity to learn from the experience of
mineral rich developing countries, and its commitment to achieve growth and
development through hard work, the government of Eritrea should use the
country’s mineral wealth to create another wealth through investment on human
capital, agriculture, manufacture and services so that we can build strong,
healthy and diversified economy and achieve sustainable development that guarantees
the safety of communities and the environment.
Likewise, most Eritreans want to see their country exporting value added
finished and semi-finished products rather than raw materials. Unless Eritrea
succeeded to add values on its minerals, impacts of the mining sector in the
economy will be minimal, as the price of raw materials in international
markets is steadily decreasing and the mining sector is becoming more
capital-intensive and no longer generator of jobs. Currently, mining employs
only 0.09 percent of the global work force and this number is in rapid
decline.
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