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Monday, 19 September 1994
Page: 943

(Question No. 1590)

Senator Margetts asked the Minister of Foreign Affairs, upon notice, on 9 August 1994:

  With reference to the recent memorandum of understanding the Australian Government has signed with the Eritrean Government:

  (1) What are the details of the deal which includes a geological survey of Eritrea.

  (2) What are the costings for the geological survey and other development aid projects included in the deal.

  (3) What will be Australia's role in the proposed geological survey.

  (4) Will the memorandum of understanding benefit Australian companies; if so, what are the projected financial benefits to Australian companies.

Senator Gareth Evans —The answer to the honourable senator's question is as follows:

  (1) On 21 January 1994, I signed a Memorandum of Understanding between the Government of Australia and the Government of Eritrea relating to the Eritrea Mineral Exploration Project. The project is intended to establish and provide training to the Geological Survey of Eritrea over its first two field seasons.

   The aim of the project is to strengthen Eritrea's capacity to systematically research, assess and demonstrate its mineral potential by developing a viable geological survey unit in the Ministry of Energy, Mines and Water Resources.

  (2) The Australian Government's contribution to the project will total approximately $461,170 over two years. Of this, $46,500 will be made available for provision of allowances, travel and accommodation costs associated with the involvement of Australian personnel. Also included is $399,670 for the purchase of equipment and material supplied for the execution of the project. An amount of $15,000 has been made available for in-Australia training attachments.

  (3) The Australian Government role in the project is to provide aid for the development of a geological survey capacity in Eritrea. This is to be achieved by demonstrating field and mapping techniques to Eritrean geologists over two field seasons. It includes provision of basic equipment required to undertake systematic field exploration of the Asmara mineral belt and assistance with the chemical analysis of the samples collected. Most of the equipment and all of the chemical analysis will be provided by Australian companies.

  (4) Australian mining companies, including BHP, Western Mining and CRA, have expressed interest in mineral exploration in Eritrea which has known deposits of industrial metals and possible deposits of copper, gold and off-shore oil and gas. Through geological and geochemical mapping carried out under the project, and by developing further the capacity of the Eritrean Ministry of Energy, Mines and Water Resources to continue this work, business linkages in the mining sector will be facilitated.

   In a separate, but related project, Australia has provided technical assistance to help Eritrea develop minerals exploration legislation, designed to protect Eritrea's national interests in dealing with international investment in the minerals sector. Eritrea has a narrow resource base and minerals represents one of the more promising sectors to help economic development.