Danakali banks on new investor mood to fund Eritrean mine

Investment Risk

Rising Interest

For Danakali, Eritrea's isolation has meant it had the chance to secure access to the kind of "tier one" resource -- long life, low cost, high grade -- normally snapped up by much bigger operators, Cornelius said.

It may not be so easy in future. Kevin Pietersen, a Johannesburg-based partner at law firm Hogan Lovells, said there was "increased appetite for both Ethiopia and Eritrea" this year.

Junior explorer Altus Strategies, which has been working on copper and gold projects in Ethiopia since 2010, said mining interest in both African countries had climbed.

"We have had a number of expressions of interest from people about Ethiopia and also about Eritrea even though we're not currently active there," CEO Steven Poulton said, adding that Altus was sending a team to assess opportunities in Eritrea.

For land-locked Ethiopia, access to Eritrea's long coast may prove an early dividend of peace. The prime minister's chief of staff, Fitsum Arega, said in July it was "an urgent priority for Ethiopia" to speed up the transit of goods, which now mostly flow through the ports of another neighbouring state, Djibouti.

Danakali's mine lies close to the Ethiopian border and just 75 km (47 miles) from Anfile Bay, where the mining company firm could build a port for exports. The potash could also be trucked 230 km (144 miles) to Eritrea's established Massawa port.