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Ethiopia
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The mining sector is quite small in Ethiopia and its minerals sector contributes less than 1% to the country’s GDP. The country has deposits of coal, gemstones, kaolin, iron ore, soda ash, and tantalum, but only gold is mined in significant quantities and it’s considered Ethiopia’s main mineral export. In 2001 gold production amounted to some 3.4 tons. Even though modern mining in Ethiopia is recent, gold has traditionally been mined from alluvial and, to a lesser extent, primary free gold since ancient times. Modern gold mining methods have only been used since the 1930’s in the Bedakesa Valley of the Adola area in Southern Ethiopia. Later exploration has resulted in the discovery of the Lega Dembi deposit and other minerals.

Salt extraction from salt beds in the Afar Depression, as well as from salt springs in Dire and Afder woredas in the south, is only of internal importance and only a negligible amount is exported.

Conflict between Ethiopia and Eritrea continues and this has a negative effect on foreign investment in these two countries.

Current mining activities also include the production of tantalite (50 t/year) and soda ash (20,000 t/year). The only formal tantalum mining operation is the Kenticha Mine, operated by Ethiopian Mines Development Share Company. Mining of kaolin, dimension stones (limestone, marble and granite) and small scale and artisanal mining of precious metals, gemstone, salt, industrial minerals and construction materials are the main mining activities in Ethiopia. Ethiopia has located some coal reserves in three separate areas in Ethiopia estimated at containing 61 Mt of coal (all lignite). Additional reserves have apparently been located in the Western part of the country.

Cement was the most important mineral industry in value and quantity. Also mined in limited quantities in 2001 were brick clay, kaolin, (China clay), common clays, columbium (niobium), diatomite, feldspar, semiprecious gemstones (fire opal, amethyst, peridot, rose quartz), gypsum and anhydrite, lignite, lime, pumice, rock salt, scoria, natural soda ash, stone, sand and gravel (crushed construction stone, dimension stone, granite, limestone, silica sand), talc, tantalum, and silver and platinum contained in gold ingots. Substantial iron ore deposits were discovered in the Welega region in 1985. Other undeveloped resources included copper, semiprecious gemstones (agate, aquamarine, chalcedony, chrysoprase, emerald, garnet, jasper, obsidian, ruby, sapphire, spinel), manganese, molybdenum, mercury, nickel, palladium, platinum, rhodium, tungsten, zinc, apatite, bentonite, dolomite, potash, and quartz sand. Expected improvements in the general economic situation and the need to rebuild infrastructure were likely to increase demand for building materials and the viability of Eritrea's metals and industrial minerals deposits.

Gold

Ethiopia has a single gold mine, Lega Dembi which was privatized and awarded to local a company Midroc Ethiopia for US$175 million. A mining license was awarded and Midroc Legadembi Gold Mine Share Company (Minroc Gold) commenced production in August 1998. Production in 2001 totaled 3.4 t. Gold production from Lega Dembi realized about US$34 million in foreign currency for the finance year 2001-02.

Golden Prospecting Company has found a 23t gold deposit at Tulu-Kapi in Western Ethiopia. Sakaro has also reportedly discovered a new deposit, estimated at 18t, in the Lege-Dembi gold belt.

Chemical and Fertilizer Minerals

There has been an increase in investments in non-metallic minerals such as salt, mineral water and dimension stone within Ethiopia. The Ministry of Mines and Energy has issued four licenses for salt production at Lake Afdera in Afar Regional State, in northeast Ethiopia. One of the licenses, Afar Salt Production-sharing Co. has committed Bi60 million to produce salt from the brine of Lake Afdera. The company intends to produce 500,000 t/y of edible salt initially, building eventually to 3.0 Mt/y, when the total investment could approach Bi100 million. Another company, Afdera plc plans to produce 100,000 t/y. Similarly, two other companies, Ertale plc and Bashanfer Trading plc are also licensed to engage in salt production in the area. The government hopes that within the next few years the country will be able to produce enough salt to satisfy local demand and to export the surplus.

Phosphate exploration by the Geological Survey has been under way in Ethiopia for some years and has been finalized. Previous studies in the Bikilal area in western Ethiopia have indicated that there is a mineable reserve of 182 Mt of ore at an average grade of 3.5% P2O5, and prefeasibility and additional studies show that the ore is technically mineable. There is another phosphate exploration project at Melka Arba in southeastern Ethiopia where detailed geological mapping has been conducted over an

Mineral Law & Legislation

The Ministry of Mines and Energy is responsible for granting licenses for companies willing to operate in the country. The Mining Proclamation 52/1993, Mining Income Tax Proclamation 53/1993, Mining Operations Regulation 182/1994, Proclamation 22/1996, Proclamation 23/1996, and the Investment Proclamation of June 1996 form the legal basis for mining in Ethiopia.

The Ethiopian government retains title to all land and mining operations, subject to national and governmental approval. The Government has the right to acquire a 2% interest in mining ventures as well as a 35% income tax levy on all mining operations. Mining royalties include 5% on precious metals and 3% on other minerals.

The state-owned Ethiopian Mineral Resources Development Corporation (EMRDC) is involved with the development and production of mineral resources.

Major Players in the industry

  • Midroc Lega Dembi Gold Mine Share Company
  • Stratex International Plc.
  • Afar Salt Production-sharing Co.
  • Ertale Plc.
  • Bashanfer Trading Plc.

Key Figures

  • Gold production: 4,028 kilograms (2006)
  • Industrial Sand and Gravel (Silica) production: 4.6 thousand metric tons (2006)
  • Silver production: 1 metric tons (2006)
  • Soda Ash production: 8.2 thousand metric tons (2006)
  • Diatomite production: 2,000 metric tons (2004)
  • Kaolin production: 1,641 metric tons (2006)

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