(Oct 18, 2011, Bloomberg)--Eritrea faces tougher United Nations sanctions that would ban companies from investing in the African country’s mineral resources such as gold.
“All states shall prohibit investment” in Eritrea’s mining industry and “prohibit the import of gold and other raw materials” from Eritrea, according to a copy of a draft resolution introduced by Gabon, one of three African nations on the UN Security Council.
Eritrea’s $2.59 billion economy relies on mining. Gold has drawn investment from companies including Canada’s Nevsun Resources Ltd.
Another resource is the money sent back by Eritreans living abroad. The expatriates pay a 2 percent tax on those remittances. The UN resolution would seek to ban collection of the tax.
Further economic sanctions may hurt more than 5 million people living in poverty. Eritrea is one of the world’s poorest nations, with citizens earning just over a $1 a day, the UN says.
A July 18 UN report said the tax on remittances is the “most significant source of revenue” for the government, estimating the income to be “tens, possibly hundreds of millions of dollars on an annual basis.”
The government, through a joint gold-mining venture with Vancouver-based Nevsun, has “started to receive royalty payments worth millions of dollars,” the report said. Read more from Bloomberg »
“All states shall prohibit investment” in Eritrea’s mining industry and “prohibit the import of gold and other raw materials” from Eritrea, according to a copy of a draft resolution introduced by Gabon, one of three African nations on the UN Security Council.
Eritrea’s $2.59 billion economy relies on mining. Gold has drawn investment from companies including Canada’s Nevsun Resources Ltd.
Another resource is the money sent back by Eritreans living abroad. The expatriates pay a 2 percent tax on those remittances. The UN resolution would seek to ban collection of the tax.
Further economic sanctions may hurt more than 5 million people living in poverty. Eritrea is one of the world’s poorest nations, with citizens earning just over a $1 a day, the UN says.
A July 18 UN report said the tax on remittances is the “most significant source of revenue” for the government, estimating the income to be “tens, possibly hundreds of millions of dollars on an annual basis.”
The government, through a joint gold-mining venture with Vancouver-based Nevsun, has “started to receive royalty payments worth millions of dollars,” the report said. Read more from Bloomberg »
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