Djibouti, a small East African country, is a key hub for global trade, sitting at the southern entry to the Red Sea and Bab al-Mandab Strait.
Though it has an arid climate and just 0.04% arable land, the country is rich in resources like salt, gypsum, limestone, gold, granite, and diatomite.
Djibouti also has strong renewable energy potential, especially in geothermal and solar power. Geothermal capacity alone is estimated at 1,000 MW.
Djibouti’s Natural Resources And Their Locations
Here are the natural resources that have been found in Djibouti and their locations:
| Natural Resources | Locations |
|---|---|
| Salt | Lac Assal |
| Perlite | Central Plateau |
| Gypsum | Coastal Plains |
| Limestone | Ali Sabieh Region |
| Gold | Moussa Ali Area |
| Granite | Goda Mountains |
| Diatomite | Lake Ghoubet |
| Petroleum (Exploration) | Damerjog and offshore areas |
| Geothermal Energy | Lake Abhe and Assal Rift |
| Solar Energy Potential | Across the arid regions |
Discoveries Of Djibouti’s Natural Resources
Salt deposits at Lac Assal have been known for centuries, with extraction dating back to ancient times. Located in the Danakil Depression, Lac Assal is the lowest point in Africa.
Salt has been a key export for Djibouti, though production, which reached 173,000 tons in 2001, has since declined. Geothermal exploration began in the 1970s, with major efforts in the 1980s and 2000s.
In 2013, Djibouti established a dedicated office to prioritize geothermal energy. Most activity is focused near Lake Assal and Lake Abhe.
The country’s geothermal potential exceeds 1.1 GW, and a power station is planned at Fialé Caldera to use renewable sources.
Petroleum exploration has been ongoing since the late 20th century, both onshore and offshore in Damerjog and the surrounding coastal areas.
Minerals like limestone, gypsum, and gold are found in regions such as the central plateau and Goda Mountains. These resources have supported construction and industry for years.
In 2023, Djibouti launched its first wind farm near the Bay of Ghoubet. With 17 turbines producing 60 MW, expansion is planned to reach 103 MW.
Located 120 km from the capital, this area has strong wind potential. The project supports the national target of 100% green energy by 2035.
A solar project in the Grand Bara Desert began in 2020. Initially developed by Engie and later taken over by AMEA Power, it aims to generate up to 100 MW, making it Djibouti’s first large-scale solar power plant.
A 40-MW waste-to-energy plant is planned for Damerjog, though progress has been delayed. Once complete, it will convert waste into electricity.
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Viability Of Djibouti’s Natural Resource Exploitation
Djibouti’s natural resources have notable potential for economic growth and energy independence. However, their viability depends on overcoming financial and infrastructural challenges.
Geothermal Energy
Djibouti has geothermal potential estimated at over 1,000 MW due to its location at the convergence of three tectonic plates in the East African Rift Valley.
Geothermal energy provides a reliable baseload power source and could lower electricity costs by up to 70%. However, challenges such as high temperatures, salinity issues, and a lack of private sector investment have slowed its development.
The Fialé Caldera project near Lake Assal has been the focal point for geothermal exploration, with initial drilling starting in 2018, supported by international donors like the World Bank and the African Development Bank.
In 2013, a $31 million funding initiative assessed the feasibility of large-scale power generation. Despite this, limited implementation capacity, high exploration costs, and dependency on foreign expertise are barriers to fully exploiting the potential.
Salt Production
Salt extraction from Lac Assal has been a key part of Djibouti’s economy for centuries. The salt deposits are vast and high-quality, yet production is delayed by traditional methods and challenges like extreme heat.
Lac Assal is one of Africa’s largest salt reserves. However, there are opportunities to improve scalability by modernizing extraction techniques.
Infrastructure gaps and environmental concerns related to large-scale extraction must be addressed for sustainable production.
Petroleum Exploration
Petroleum exploration in Djibouti dates back to the late 20th century. Though no major discoveries have been made, geological surveys show promise, particularly in the Damerjog and offshore regions.
International partnerships have been key to exploration efforts, with Japan’s International Cooperation Agency identifying 13 potential sites in 2014. Yet, high exploration and drilling costs, combined with limited domestic technical capacity, have held back progress.
Mineral Deposits
Djibouti is home to a variety of minerals, including gypsum, limestone, and gold. These resources are underutilized due to limited mining infrastructure and technical expertise.
Regions such as the Goda Mountains and the central plateau contain mineral deposits that could support construction and industrial activities.
Export Potential Of Djibouti’s Natural Resources
Djibouti’s natural resources have a strong export potential, supporting the economy and establishing the country as a key player in regional trade.
Salt Exports
Djibouti’s salt exports, mainly from Lac Assal, are a key contributor to the economy. In 2023, the country exported 628,276 kg of salt and sodium chloride to Ethiopia, generating $194,340 in revenue.
The high quality of Lac Assal salt allows it to remain competitive in global markets. Historically, salt exports have played an important part in the country’s foreign exchange earnings.
To increase export volumes, Djibouti could modernize extraction processes and improve infrastructure. Broadening trade relationships aside from Ethiopia to other African countries and the Middle East would further diversify markets. With the rising global demand for industrial-grade salt, Djibouti is well-placed to leverage this trend.
Renewable Energy Exports
Djibouti is advancing in renewable energy, focusing on wind and solar power. The first wind farm, inaugurated in 2023 near the Bay of Ghoubet, has a 60 MW capacity.
Solar energy projects in the Grand Bara desert are also underway. Looking ahead, Djibouti wants to achieve 100% green energy by 2035. This presents an opportunity to export surplus energy to neighboring countries like Ethiopia and Somalia.
Mineral Exports
Djibouti exports minerals such as gypsum, limestone, and cement, primarily to Ethiopia. In 2023, the total value of these exports was $16.93 million, supporting construction and industrial activities in the region.
To grow exports, Djibouti could increase mining operations and adopt modern extraction methods. Partnering with international investors would also help open new markets while boosting export volumes.
Economic Impact Of Djibouti’s Natural Resources
Djibouti’s natural resources, though limited, continue to influence its economic structure.
Contribution To GDP
Natural resources accounted for just 0.28% of Djibouti’s GDP in 2021, a small drop from 0.32% in 2020, according to TheGlobalEconomy.com.
The historical average between 1985 and 2021 stood at 0.56%, with a peak of 0.95% in 1998 and a low of 0.17% in 1985. While not a major contributor, these resources are part of the broader economic picture.
Despite small resource income, the economy showed strong momentum, growing 6.7% in 2023. Growth is expected to average 5.4% between 2024 and 2026, driven by port logistics and re-exports to Ethiopia.
Job Creation And Employment
Djibouti’s labor force was estimated at 294,600 in 2012. By 2017, unemployment reached 40%. Around 10% of workers were in agriculture, while salt extraction and mineral exploration provided additional employment opportunities in mining.
Regional Trade
Exports reached $155.5 million in 2017, while imports stood at $1.172 billion. A major 2015 deal with Ethiopia launched a 550-km fuel pipeline valued at $1.55 billion.