Ethiopia: Govt Revokes Over 50 Mining Licences

by Zelalem

Addis Ababa — Ethiopia has cancelled over 50 mining and explorations licences, official said.

The Public Relation and Communications Director at the Ministry of Mines, Petroleum and Natural Gas (MoMPNG), Mr Bacha Faji, said the action followed the failure by several licence holders to commence operations on schedule.

“We cancelled over 50 mining licences recently, mainly because the companies have not started operations on time as per their agreement,” said Mr Bacha.

The law requires a company to commence exploration or mining within 90 days after signing a contract with the ministry.

Joint ventures

Mr Bacha said MoMPNG had registered 530 mining companies so far, including, the active, cancelled, transferred and under evaluation/ investigation licences owned by local and foreign entities as well as joint ventures.

The ministry statistics indicate that a total of 211 mining licences have been cancelled since 2004.

They include 130 owned by foreign firms, 49 joint ventures and 32 fully local-owned licences.

Though one out of three Ethiopians lives below the poverty line, earning less than $1.90 per day, recent reports show that the country was endowed with many natural resources, including gold, iron, natural gas and oil.

Mineral exports

Gold ranks among Ethiopia’s major mineral exports, generating around $440 million in 2011/12.

Tigray in the north, Gambella and Benishangul Gumz in the west, Amhara in the north central and the southern and Oromia are the gold producing areas.

According to the mining ministry data, as of January 2016, there were about 170 licensed companies engaged in exploration and development of gold with 51 per cent of the licences issued to foreign firms, while 21 per cent were joint ventures.

MIDROC Legedembi Gold Mine, owned by Ethiopia-born Saudi tycoon, is the main firm modernising the formerly state-owned gold mines.

The target

In the first six months of the current fiscal year (August 8, 2016 – February 7, 2017), Ethiopia exported a total of 1,401kg gold, which only achieved 35 per cent of the ministry’s target for the period.

During the same period, Ethiopia exported 24.44 tons of tantalite concentrate, which was only 22 per cent of the ministry’s target for the period. It also exported 6,213 cubic meters of marble, which only met 24 per cent of the target.

Ethiopia’s mining sector contributed 1.5 per cent to the GDP in 2011/12 budget year, according to the 2014 World Bank assessment report.

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