Bloomberg News

Eritrea Slams Group’s Report of Forced Labor at Nevsun Mine

January 17, 2013

Eritrea’s government rejected as “cheap shots and lies” a report by Human Rights Watch that said forced labor was used to construct a gold mine it owns with Canada’s Nevsun Resources Ltd. (NSU)

Segen Construction Co., a sub-contractor owned by the ruling People’s Front for Democracy and Justice that worked on the project, used conscripts during the building of the Bisha Mine from 2009 to 2011, the New York-based advocacy group said in a report released Jan. 15. “Conscripts are regularly subjected to torture and other serious abuses,” it said.

HRW’s report is a “distortion” of Eritrea’s national- service program, said Girma Asmerom, the nation’s ambassador to the African Union. “They call it forced labor,” he said in an interview yesterday in Ethiopia’s capital, Addis Ababa. “That shows deliberate ignorance.”

Eritrea, which became independent from Ethiopia in 1993 after a 30-year war, is “one of the most closed and repressive countries in the world,” according to HRW. Former rebel leader President Isaias Afewerki’s government has banned private media and the Horn of Africa country hasn’t held national elections since independence.

Mining companies in Eritrea risk involvement in “gross human-rights abuses” unless they take strong preventative measures, HRW said. One former Segen conscript out of two interviewed said he was imprisoned for four months after he ignored the refusal of a request to attend a grandparent’s funeral, it said.

‘Not Allowed’

Segen may have used conscripts in early 2009 when Nevsun didn’t check whether sub-contractors’ workers had been released from national service, the Vancouver-based company said in a statement e-mailed on Jan. 11.

“The use of conscripted labor at the Bisha site is not allowed,” it said. The company “acted quickly” to start checks and to obtain a written assurance from Segen that no conscripts would work at the mine, it said.

The Bisha mine produced $614 million of gold in 2011, according to Nevsun. Since early 2011, Nevsun has paid the Eritrean government $400 million, the company said.

Segen Managing Director Tesfay Goitom and Eritrean Mines Minister Tesfai Ghebreselassie declined to comment when contacted by phone.

All 18-year-old Eritreans do national service, which is designed to protect the nation’s security and sovereignty, encourage ethnic harmony and assist economic development, Girma said. Participants have been “permanently mobilized” since a two-year war broke out with Ethiopia in 1998, he said.

Mining Growth

Chalice Gold Mines Ltd. (CHN), an Australian explorer for the metal, sold its Zara Project in Eritrea to China SFECO, a unit of Shanghai Construction Co., last year before construction started, Chief Executive Officer Doug Jones said.

“Chalice has not and does not use state-run firms in its activities in Eritrea,” he said in a Jan. 11 e-mailed response to questions.

South Boulder Mines Ltd. (STB), based in Perth, has had no exposure to the national-service program at its Colluli potash project, which is at a “feasibility” stage, Managing Director Lorry Hughes said in a Jan. 11 e-mail. It plans to produce $500 million a year of the fertilizer ingredient from 2016, it said in April.

The state-owned Eritrean National Mining Co. owns 40 percent of Bisha, which is about 150 kilometers (124 miles) west of the capital, Asmara. Mining-led growth in Eritrea is expected to slow to 3.4 percent this year from 7.5 percent in 2012, according to the International Monetary Fund.

To contact the reporters on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net; Bealfan Hayle in Khartoum via Nairobi at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net


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