Eritrea Just Came Off the US Sanctions List. Its Mines Are Chinese

ERITREA · MINING

Reports that Eritrea has invited its diaspora to invest in mining could not be verified from any institution or wire service. What did happen, yesterday, is that the United States lifted a sanctions programme.

What We Could Not Verify, and Why We Are Saying So

The premise for this piece was a reported call by Eritrea’s government for its diaspora to invest in the mining sector. It pointed to the Bisha mine and the Colluli potash project. We could not confirm it.

The claim appears in two places. One is a news site that describes itself as independent and based outside Eritrea, in an article dated 9 March 2026. It attributes the statement to a message posted by the agriculture minister. That is an odd venue for a mining appeal, and it gives no document reference or Asmara dateline.

The other is an unsigned promotional essay dated 15 March 2026, with no byline and no sourcing. That essay is the single origin of two figures that then travelled. They are a reserve of 1.08 billion tonnes and annual fiscal revenue of over US$200 million.

The information ministry’s own outlet, which is where a formal appeal would be expected to appear, carries no such item for 2026. Reuters, the Associated Press, Bloomberg and Agence France-Presse carry nothing either.

That absence is informative rather than neutral. The wires covered Eritrea repeatedly in 2026, on sanctions and on Red Sea diplomacy. This is not a case of a country going unreported.

The Rio Times could not independently verify that Eritrea’s government issued a formal appeal to its diaspora to invest in mining. We are publishing the underlying facts about the sector, which are documented, and flagging the appeal as unconfirmed.

What Did Happen, One Day Ago

The real development is a change in Washington, and it is very recent.

The national emergency declared under Executive Order 14046 in September 2021, the Ethiopia-related sanctions programme, expired. On 18 September 2026 the United States Treasury removed several Eritrean entities from its designated nationals list.

Those removed are the ruling party, the People’s Front for Democracy and Justice, the Eritrean Defense Forces, the Red Sea Trading Corporation and the Hidri Trust. Two individuals were also removed.

This is the first meaningful loosening of the United States position since 2021. Reuters reported the intention in May 2026 from an internal State Department note. The action was confirmed by Bloomberg and by agency reporting on 19 September.

The important qualification is the driver. The removal follows the expiry of a national emergency and a shift in Red Sea strategy. No source attributes it to a documented change in Eritrean domestic policy.

For an investor the practical effect is narrow but real. The state trading arm is the entity most likely to appear in a commercial chain, and its removal reduces one specific compliance obstacle. It does not convert Eritrea into an ordinary jurisdiction.

Who Actually Owns Eritrea’s Mines

Over roughly a decade, Western capital in Eritrean mining has been almost entirely replaced by Chinese capital. The sequence is easy to trace.

Bisha is the producing asset. It is held 55% by a Chinese mining group and 45% by the state mining company. It was originally developed by a Canadian company on a 60-40 split. The Chinese acquisition of the 60% came in 2019 and the stake later moved to 55%.

Bisha processes about 2.9 million tonnes of ore a year and is the country’s largest producing zinc project. On a full-project basis, 2024 output was 121,400 tonnes of zinc, 20,000 tonnes of copper and 65 tonnes of silver. In the first half of 2026 it mined 34,280 tonnes of zinc.

Zara, a gold mine, is 60% Chinese and 40% state, after a 2012 sale by an Australian company. It was financed by a US$107 million Chinese policy-bank loan against a US$145 million construction contract. It reached commercial production around the turn of 2016.

The Asmara polymetallic project is 60% Chinese and 40% state, acquired from a Canadian company in 2015 and 2016 for US$65 million. Its six deposits hold a reported 574,000 tonnes of copper, 930,000 ounces of gold and 1.2 million tonnes of zinc.

Colluli completed the pattern. Australia’s Danakali sold its 50% interest and shareholder loan for US$166 million on 31 March 2023, to a Chinese state-linked construction conglomerate. Any description of Colluli as Australian-backed is more than three years out of date.

The Potash Project, With the Right Numbers

Colluli is the asset that draws attention, and it deserves accurate figures rather than the ones in circulation.

The ore reserve, reported to the Australian standard as at January 2018, is 1,100 million tonnes grading 10.5% potassium oxide. That is 203 million tonnes of contained sulphate of potash equivalent. The separate mineral resource is 1,289 million tonnes at 11%.

The figure of 1.08 billion tonnes that appears in promotional material corresponds to neither. It should not be used.

The project economics, as last published in 2018, covered a first module of 472,000 tonnes a year of sulphate of potash. That module required US$302 million of development capital. A second module would double output from year six for a further US$202 million. Mine life at full rate is around 200 years.

The appeal is geological and geographic. The evaporite sits shallow, which keeps capital intensity low, and it is close to the Red Sea port of Massawa, which keeps logistics short.

The often-quoted revenue figure needs its provenance stated. The only traceable number is about US$204 million a year by 2026. It comes from a 2019 study initiated and funded by the United Nations Development Programme. It is a seven-year-old projection whose milestones have already been missed.

Colluli’s current construction status is not documented anywhere we could verify. The Chinese owner is unlisted and publishes nothing project-specific. The state company publishes nothing. Danakali stopped reporting in 2023. Treat any timing claim as unsourced.

What This Means If You Invest Here

The mining fiscal terms are documented and are not, on their face, punitive.

The state mining company takes a 10% free-carried interest in every project, with an option to purchase up to a further 30%. That is lighter than the 15% free-carried plus 30% option now standard in Burkina Faso.

Royalties are 3.5% on base metals and 5% on precious metals. Corporate income tax on mining profits is 38%, with accelerated depreciation over four years and a 0.5% import duty on mining equipment. There is no tax on dividends.

The currency is the harder problem. The nakfa is fixed at 15 to the dollar and is not convertible. There is no mechanism comparable to the currency board arrangements elsewhere on the continent.

The macro picture is thin rather than alarming. The African Development Bank puts 2025 growth at 3.2% and inflation at 5.3%. It gives a fiscal deficit of 2.5% of GDP and a current account surplus of 13.2% on mineral exports. It projects 2.8% growth for 2026.

But the IMF has not completed an Article IV consultation since 22 July 2019. That consultation found Eritrea in debt distress with a weak external position. The 2019 debt sustainability analysis was never published, and the African Development Bank says so explicitly.

Eritrea has never published a national budget. External debt has averaged about 36.1% of GDP over the past decade, and poverty is estimated at between 53% and 60% of the population.

The practical consequence is that ordinary due diligence is not possible here to the standard an institutional investor would normally require. That is a structural condition of the market rather than a temporary gap.

What Is Not Known

Whether the government actually issued a diaspora mining-investment appeal. We could not confirm it from any institution, government primary source or wire service.

Colluli’s construction and production status, spend to date and first-production date. No primary disclosure exists from any party.

Colluli’s financing arrangements. The original package involved two African development lenders. Whether the new owner replaced, retained or refinanced it is not disclosed anywhere.

Zara’s current gold production. No verifiable figure exists since commissioning. The operator is unlisted and the state company publishes nothing.

Eritrea’s GDP in dollars, its budget, its reserves and its debt stock. The African Development Bank publishes ratios, not levels, and no national budget has ever been made public.

Whether the 2019 projections for Colluli’s fiscal contribution have been revised. No updated study exists.

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Sources

• US Treasury Office of Foreign Assets Control — recent actions, 18 September 2026
• IMF — Eritrea country page, showing the last Article IV consultation of 22 July 2019
• African Development Bank — Eritrea economic outlook
• Danakali — completion of the sale of the Colluli interest, 31 March 2023

Context: For more on this, see Asia Intelligence Brief — Wednesday, September 16,.

Frequently Asked Questions

Did Eritrea ask its diaspora to invest in mining?

We could not verify it. The claim appears in a diaspora news site and an unsigned promotional blog in March 2026. No wire service reported it and no corresponding statement appears on the Eritrean information ministry’s own website.

What changed with US sanctions on Eritrea?

On 18 September 2026 the United States Treasury removed the ruling party, the armed forces, the Red Sea Trading Corporation and the Hidri Trust. It removed them from its designated list. This followed the expiry of the national emergency declared in September 2021.

Who owns Eritrea’s mines?

Chinese companies hold the majority in every major project, with the state mining company holding the rest. Bisha is 55-45, Zara is 60-40, the Asmara project is 60-40, and Colluli is split 50-50 since Australia’s Danakali sold out in March 2023.

How large is the Colluli potash deposit?

The reported ore reserve is 1,100 million tonnes at 10.5% potassium oxide, for 203 million tonnes of contained sulphate of potash equivalent. A figure of 1.08 billion tonnes that circulates in promotional material does not correspond to any reported reserve or resource.

What are Eritrea’s mining fiscal terms?

The state company takes 10% free-carried in every project with an option on up to 30% more. Royalties are 3.5% on base metals and 5% on precious metals. Corporate income tax on mining profits is 38%, and there is no tax on dividends.

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