The Mining Law
Friday, 10 June 2011

    Proclamation No. 165/2011


A Proclamation to Amend the Mining Law Proclamation No. 68/1995

Article 1:  Short title

This proclamation may be cited as “Mining Law Proclamation No.68/1995 Amendment Proclamation No. 165/2011.

Article 2:  State Participation

Article 41 of the Mining Law Proclamation No.68/1995 is hereby amended as follows:

Without prejudice to the provision of Article 7 of the Mining Law   Proclamation No.68/1995, the Government may acquire, without cost to it self, a participation interest of up to 10 percent of any mining investment. The  Government is also entitled to equity participation not  exceeding a total of 40 percent, including the 10 percent  mentioned hereinabove,  the percentage, timing ,financing ,resulting  rights and obligations and other  details of which  shall be specified by agreement.

Article 3 Effective date

This Proclamation shall enter in to force as of the date of its publication in the Gazette of Eritrean Laws.


                                        Done at Asmara this 16th day of May, 2011

                                                                    Government of Eritrea


Previous Proclamations


The legal framework governing the conduct of all mining and related
operations within the territory of Eritrea is embodied in a Mining
Law comprising: Minerals Proclamation No 68/1995, Mining Income Tax
Proclamation No. 69/1995 and Regulations on Mining Operations Legal
 Notice No. 19/1995, all of which were promulgated in March 1995.

Key Policy issues upon which the newly promulgated Mining Law is based include:

• All mineral resources in Eritrea are public property. The State
has a duty to ensure the conservation and sustainable development
of these resources for the benefit of the people;
• The intention is to create a favourable atmosphere for foreign
 investment in the mining sector. Due recognition is made of the
 significant role that foreign investment and skills can play in
 the development of this sector and the capital intensive, long
term, and risky nature of mining investments;
• The necessity for formulating regulations which ensure protection
of the natural environment, together with sustainable development of
the country’s mineral resources, in accordance with sound principles
of resource management and land use;

The Eritrean Mining Law is up-to-date, attractive and competitive, as
it provides considerable benefits and incentives to investors. For
example, the law provides for: The right to exploit any commercial
discoveries madepursuant to a valid exploration license;

• The right to sell locally or export, free of all duties and taxes
 and without being required to obtain any other authorisation or
 permission from any other Government agency, all minerals produced
 pursuant to a mining license;
• A simple and fair taxation system which recognises the risky nature
 of mining investments, and hence allows:
     o Accelerated depreciation (straight line method over 4 years) of all
        capital and preproduction costs;
     o Write-offs of exploration expenditure incurred anywhere in the country;
     o The carrying forward of losses;
     o A generous reinvestment deduction (5% of gross income);
     o No dividend tax
     o A nominal rate of import duty (0.5%) on all inputs necessary for
        mining operations;
     o Normal royalty rates as well as an option for the reduction, suspension
        or waiver of the royalty in appropriate circumstances;
• Equitable foreign exchange regulations permitting;
     o Free and unrestricted repatriation of earnings;
     o Retention of a portion of foreign currency earnings abroad in external
     o Maintenance of foreign currency accounts in banks in Eritrea.
• A simple “one-stop” licensing system enabling all the formalities for
 all types of licenses for mining operations to be completed by a single
Government agency – the Department of Mines with the Ministry of
and Mines.


Last Updated ( Saturday, 11 June 2011 )