Country Report Djibouti November 2006

The domestic economy: Djibouti's salt resources are to be developed

On September 14th the president, Ismaël Omar Guelleh, approved the granting of an exclusive 50-year concession, free of charge, to the locally owned Société d'exploitation du Lac Assal (Selac) to develop 100 sq km of salt flats on the banks of Lake Assal. Lake Assal is 100 km west of Djibouti city and is the lowest point in Africa, at 155 metres below sea level. It is the most saline body of water in the world and is ten times saltier than the ocean. Extreme summer heat is accompanied by strong drying winds and, as a result, water evaporation along the banks of the lake has left vast expanses of salt flats. It is estimated that 6m tonnes of salt are added each year as a result of evaporation. The Afar tribes in the region have traditionally made their living by mining the salt by hand, and the area is an internationally renowned beauty spot with significant tourist development potential (August 2005, The domestic economy: Infrastructure and communications).

In addition to its 50-year concession to industrialise salt extraction, the Selac operation has been given a number of special tax exemptions and will have the status of a free-trade zone when it develops the salt flats. In exchange, the company has said that it will undertake substantial investment in infrastructure, equipment and training in order to extract the salt in partnership with foreign companies. A number of companies from France, Spain and the US are believed to be interested in forming an international consortium to work the concession, with Selac remaining as the nominee. One French company is reported to have said that it is already prepared to invest US$20m in the salt-extraction operation.

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