Ethiopia gradually recognized the potential of mining resources as a pivotal driver of economic growth and development. The country has huge potential of natural resources, is estimated to be unaware of approximately 70% of its mineral wealth. This significant lack of awareness stems primarily from inadequate exploration and research methodologies, compounded by a lack of technological support. As a result, the country has only managed to identify between 30% and 40% of its total mineral resources. This underutilization of mineral assets not only hinders economic growth but also prevents Ethiopia from fully leveraging its resources for sustainable development.
Elias Kasahun, a mining lecturer at Addis Ababa University of Science and Technology, emphasized that Ethiopia’s mineral resources are scattered across the country. The geographical dispersion complicates further investigations and limits the effectiveness of exploration efforts.
He said that the challenges are further exacerbated by ongoing conflicts in regions rich in minerals, such as Tigray, Welega and Guji. Elias notes that these areas could potentially yield substantial mineral resources if not for the prevailing unrest that disrupts mining activities and deters investment.
For instance, he mentioned that the Midrock gold production company, located in the Guji zone, has faced operational challenges due to these conflicts. Currently, the company produces around 3.5 tons of gold per year, significantly down from its previous output of eight tons, he said. Such fluctuations in production highlight the direct impact of socio-political stability on the mining sector’s viability, he added.
The lecture pointed out that illegal mining practices pose a serious threat to the sector’s overall health. In regions like Benishangul and Gambella, where numerous gold deposits exist, illegal operations are reportedly held by individuals, bypassing regulatory frameworks. This not only harms legitimate miners but also results in the production of subpar mineral products. The lack of regulation and oversight diminishes the quality of resources extracted and poses environmental risks, he noted.
Ethiopia is unique in that it permits traditional methods of mineral extraction, a practice that, while culturally significant, impedes the sustainable and efficient use of its mineral resources. Elias argues that this approach needs reassessment to enhance resource management and maximize the potential economic benefits.
He further stated that Ethiopia has yet to utilize even 3% of its mineral wealth. Identifying locations with mineral deposits is a monumental task in itself; further complicating efforts to harness these resources used full utilization.
In recent years, the Ethiopian government has made concerted efforts to harness these resources fully, aiming to diversify its economy and reduce reliance on agriculture. This strategic shift not only promises to bolster national revenue but also to create jobs and enhance infrastructure. As Ethiopia seeks to position itself as a key player in the global mining landscape, the full utilization of its mineral wealth becomes essential for sustainable development and the improvement of living standards for its population.
However, recent policy reforms in Ethiopia aim to address these challenges. Elias the recently implemented monetary policy is designed to facilitate better utilization of mineral resources and combat illegality in the sector. The Expert suggested that increased government attention and detailed studies are essential for revitalizing the mining industry.
State Minister of Mines, Million Mathewos, asserted that the Ethiopian government has prioritized the mining sector over the past five years. The government recognizes mining as one of the five pillars of the economy, aiming to harness its full potential.
Million mentioned that Ethiopia has not reaped the benefits it should from the mining sector, largely due to a history of neglect. In the last fiscal year, Ethiopia managed to recover 900 kg of gold. However, following recent macroeconomic reforms, the country has seen a significant increase, with over 2,700 kg of gold extracted in just August and September, state minister noted. This burgeoning output signifies the sector’s potential as a major foreign exchange earner, second only to agriculture, he added.
To further enhance foreign exchange earnings, three gold production facilities are currently under construction. Million said that the country do ahead that these projects will be operational within a year and a half, with the potential to produce over ten tons of gold annually. This increase in production is expected to improve both the quantity and quality of mineral products available for export, he added.
The State Minister has indicated that the new gold mining projects are strategically located in Benishangul, Gambella, and Tigray. Notably, the project in the Kormuk district of Benishangul is projected to yield up to nine tons of gold per year. Additionally, the existing gold mining operations in Guji are being expanded to increase output.
Beyond gold, there are plans for the sustainable production of potash ore in the Afar region, diversifying Ethiopia’s mineral extraction portfolio. Million highlighted that the fiscal year 2016 E.C. the country gained 420 million USD from mineral exports, with an ambitious goal of reaching 800 million USD in the current year, he revealed.
The country has established an open system for both local and foreign investors to engage with the mining sector. This edge aims to attract foreign capital, fostering a more robust and sustainable mining industry. By replacing imported products, producing goods for local industries, and creating job opportunities for citizens, the mining sector is positioned to play a crucial role in Ethiopia’s economic transformation.
Ethiopia stands at a crossroads regarding its mineral resources. While the country is endowed with vast mineral wealth, it faces significant challenges in exploration, regulation, and sustainable management.
Moreover, the government creates awareness for the society to address the challenge of the sector and maintains the environmental impacts. Also the government is must be open for private company to enhancing the utilization of the minerals resource in the country.
By investing in modern exploration technologies, addressing illegal mining practices, and fostering a more conducive environment for investment, Ethiopia can unlock the full potential of its mineral resources. The government’s recent initiatives and reforms are promising steps toward a more prosperous future, but sustained commitment and strategic planning will be essential to realize the vision of a thriving mining sector that benefits all Ethiopians.
BY FIKADU BELAY
The Ethiopian Herald October 6/2024
