The amount of gold mined is dwindling around the world making gold price go banana. Neighboring countries are already extracting new gold in this new gold rush. The Horn of Africa is no exception.
This overlooked part of east Africa earned some of the media’s attention through the past years. The western world, especially the US now knows of Somalia, Ethiopia, Eretria and Djibouti. These lands are what the ancient pharaohs of Egypt calledPunt6,000 years ago. The African Horn also has gold deposits similar to those in West Africa and South Africa, though they are less popular.
News of the civil war in Somalia and UN operations consisting mainly of US troops in the early 90s and recent naval piracy caught the world’s attention for some time. Ethiopia has a very long history that is as old as the Nile and pharaohs. Plus, their plan to build a dam triggered a political tension in Egypt, one of the largest and the oldest countries in the Middle East and Africa. Every naval vessel traveling between Asia and Europe knows the port of Djibouti. While Eritrea’s recent independent in 1991 and the war with Ethiopia in 1998 are still fresh.
The 2005 gold Bull-Run drove many people to look for the precious yellow metal. Plus, an already established gold market is nearby in the Middle East is working as a proxy exporter for the Asian hungry-for-gold markets in India and Singapore. The future of physical gold price and paper gold in the stock markets forces the world economy to depend on every unearthed ounce of gold.
The largest country in this area is Ethiopia. The Ethiopian economy depends mainly and heavily on agriculture and livestock. But, this geologically active land has mineral riches and water supply suffice to boost their economy dramatically. The most recent survey estimated 500 tonnes of gold are still underground, and gold production could rise from 4 tonnes per year to 40 tonnes. It has only one major gold mine, Lega Dembi, where a Saudi billionaire bought it from the government in 1997. Another foreign mining firm, British Nyota Minerals was trying to have a gold extracting license in 2012.
The problem is, this land is much like Egypt. The ancient Punt civilization might have depleted gold deposits in these lands ages ago. If the gold left is still feasible to extract, the legal and political problems remains. In Africa, South America and Asia, tonnes of gold are leaked from the country in the underground markets. Gold mining operations in Ethiopia, like several other deprived countries, are mostly done by artisanal miners using hazardous techniques then sell it cheap to shady dealers. Not to mention the negative environmental impact of formal gold mining on water and soil for a land depends mainly on agriculture and livestock. Gold might stay in Ethiopian mountains and rivers for years till a solution for these problems arrives.
The other three countries, Eretria, Djibouti and Somalia lack formal studies about the quantity of their gold deposits. Eretria reported extracting 573.4 kilograms of gold in 1998. In 2011, Nevsun Resources, a mining company, estimated producing 350,000 gold ounces per year in Eretria. While the global tension towards Somalia scared investors away. Venture capitals seek already established industries in Somalia, such as oil production. On the other hand, Djibouti’s small area makes it difficult to survive in hostile and competitive Africa. The small country made use of its excellent location and shined as port in this important rout. It also re-exported goods from their neighboring nations to each other’s.
The bottom line is, gold traces are found in these lands. But even if the Horn of Africa seeks it out, it might be more difficult and more dangerous to get it out than to keep it in Earth.