U.S. should deter foreign mining in Eritrea-report

* Accuses Eritrea of religious freedom abuses

* Calls for hardening of U.S. policy

* Eritrea denies abuses, foreign miners reject call

By Jeremy Clarke

NAIROBI, May 13 (BestGrowthStock) – Mining companies should be
deterred from working in Eritrea and banned from raising capital
or listing their securities in the United States due to
Eritrea’s rights abuse record, a U.S.-commissioned report said.
The United States Commission on International Religious
Freedom (USCIRF) said Eritrea’s systematic violation of
religious freedoms should mean prohibitive restrictions for
foreign firms joining the nation’s impending gold mining boom.

Some 16 foreign mining companies are operating in the Red
Sea state. Canada’s Nevsun Resources Ltd (NSU.TO: ) is expected to
be the first to start producing gold later this year, followed
some 12 months later by Australia’s Chalice Gold Mines (CHN.AX: ).

No U.S.-based mining company is operating in the country but
analysts say an aggressive stance in Washington would heap
pressure on Australia and Canada among others to follow suit.

“The U.S. government should … prohibit any foreign
company’s raising capital or listing its securities in the
United States while engaged in developing Eritrea’s mineral
resources,” USCIRF said in its report released this month.

The government-funded commission was set up under the 1998
International Religious Freedom Act to give independent advice
to the White House and Congress and make policy suggestions.

“NOT POLITICAL”

“Religious freedom violations continue in Eritrea. These
violations include … torture or other ill-treatment of
religious prisoners, sometimes resulting in death,” USCIRF said.

Rights groups claim more than 3,000 religious prisoners are
being detained without charge in Eritrea, some in underground
dungeons and old metal shipping containers in the desert.

Eritrea rejects all accusations relating to religious
persecution, saying they are based on thin anecdotal evidence.

The only religions officially registered in Eritrea are
Eritrean Orthodox, Roman Catholic, the Lutheran Evangelical
Church of Eritrea, and Islam. Groups say Eritreans of other
faiths, especially Jehovah’s Witnesses and Baha’is, are
routinely mistreated and harassed.

In response to the report, one Eritrea-based foreign miner
insisted the industry was a positive force in the country.

“We are not a political organisation, we are a business and
our presence is undeniably good for the average Eritrean,”
Timothy Strong, Eritrea manager for British mining company
London Africa, told Reuters by email.

“The industry creates jobs, helps Eritrea mine its own
resource and we contribute to local communities,” Strong said.

Nevsun’s shares have previously taken a hit from
international action against Eritrea. United Nations sanctions
imposed last December on Eritrea for its alleged role in Somalia
saw the company’s stock tumble 14 percent. [ID:nN24187084]

Stock Market Basics

(Editing by Richard Lough and Giles Elgood) ((Email:
[email protected]; tel:: +254 20 222 4717)) (For
more Reuters Africa coverage and to have your say on the
top issues, visit: http://africa.reuters.com/)

U.S. should deter foreign mining in Eritrea-report