‘’Ethiopia has excellent prospects for developing its resource-based industries’’ Dr. Eng. Abubeker Yimam

BY ADDISALEM MULAT

Today’s column goes by the name of Dr. Eng. Abubeker Yimam Ali. He is an Associate Professor and Dean of the School of Chemical and Bio-Engineering at Addis Ababa Institute of Technology, Addis Ababa University.

He was the board member of the Ethiopian Petroleum and Biofuel Corporation and advisory board member for the Chemical and Construction Input Material Institute. Apart from serving as the President of the Ethiopian Society of Chemical Engineers and Steering Committee Member for the Twinning Program of CCIDI, Ministry of Industry, he consults NGOs and private investors in various capacities related to his field.

Of late, The Ethiopian Herald had a short stay with Dr. Eng. Abubeker. He has touched upon a wide spectrum of issues revolving around the practice of the Ethiopian chemical industry, the investment opportunity of the chemical sector in Ethiopia, the status of Ethiopian minerals, types of minerals that exist and which one we export at this point, the status of Biofuel in Ethiopia and other related aspects. Excerpts:

 What is your reflection on the practice of the Ethiopian chemical industry? Is it heading in the right direction?

In Ethiopia, the chemical sector is at a very low level of development with limited contribution to the national economy. There are very few basic chemical industries such as caustic soda, soda ash, aluminum sulfate, and sulfuric acid, sodium hypochlorite, and alkyd resin.

Most of the other establishments in the chemical sector produce chemical products by further processing imported chemical products. The country’s demand for chemical products is met mainly through import.

Development of the mining sector and enhancing agricultural productivity will be very vital in this regard. Various initiations have been undertaken recently, including the homegrown economic reform and the launching of new mining and petroleum policy. These should be strengthened with a focus on the value-addition of natural resources and linkage to the agricultural sector.

Is Ethiopia sustainably utilizing its chemical resources? If not, what measures should be taken to take the chemical industry of the country to the next level of success?

Ethiopia is endowed with natural agricultural and mineral resources for the development of the chemical industry sector. These resources, however, are not developed as resource bases for the chemical industry.

The chemical sector faces a constraint in domestically produced raw materials: The sector has been relying on imported raw materials even in the areas where the country was supposed to have a comparative advantage. There are three aspects of the problem related to the domestic raw materials constraint: shortage, poor quality, and lack of standardization.

Energy shortage and electric power interruption are also at the top of major constraints for the sector development in Ethiopia. Limited access to foreign exchange has been another constraint to import input materials, spare parts, and machinery among others. Thus, the above issues should be addressed to make the chemical sector competitive.

What is your take on the investment opportunity of the chemical sector in Ethiopia?

Ethiopia has a prospect of developing its resource-based chemical industry. Strengthening public-private-partnership (PPP) is one modality by which the Chemical industrial development can be fostered. Various incentives have been initiated including equities on joint ventures and access to credit. These should be strengthened.

Investment promotion for both potential local and foreign investors on the opportunities (homegrown chemical products) should be undertaken.

A special resource-based chemical product supporting policy (in line with the recent mining and petroleum policy) should be formulated and implemented.

How do you evaluate the status of Ethiopian minerals?

The utilization of mineral resources in Ethiopia is becoming very important recently. Mining for gold is a key development sector in the country. It is currently contributing the major export earnings for the country, with about 2.2 tons of gold exported in three months.

This should be expanded to other minerals with a focus on value addition to them, targeting to harvest the maximum benefit. We have to process our mineral resources and enhance economic value. It is not prudent to export raw mineral ores. Processing of mineral ores locally will also allow us to expand the chemical industries and create additional jobs for youth.

We should learn from the experience of other African countries on the subject of mineral utilization. The mining sector in Africa has been generating big profits for foreign companies, with little local benefit.

This should be changed with a focus on mineral beneficiation which involves improving the economic value of a mineral by turning it  into an intermediate or a final product.

For example, if we process the tantalum ore, which we are currently exporting, we can increase the export earnings by three or four times. The same works for gold, gemstones (emerald, sapphires, opal), and industrial minerals.

As we are at the early stages of industrialization and economic transformation, we are in a better position to foresee a sustainable mineral industry development. Effective Implementation of the new policy on mineral and petroleum resources is very important in this regard.

What types of minerals exist and which one we export at this point?

As I mentioned, gold is the most important mineral in terms of export. At present, there is only one large scale gold mining company, Midroc Legedembi Gold Mine. Artisanal miners produce and export a significant amount of gold. Recently, new large scale gold mining companies such as KEFI Minerals have been granted licenses for exploration and production.

Another important ore in Ethiopia is tantalite. Ethiopia has world-class tantalite deposits, which are found only in a few countries of the world. Tantalum is a very important metal used in the electronics industry for producing capacitors.

Tantalum capacitors are found in cell phones, computers, and other electronic equipment. Ethiopia used to be one of the leading producers and exporters of tantalite for years.

However, the production has been declining since 2011. The country should modernize the mining process and install a processing plant for enhancing production and improving its economic value.

Ethiopia is also exporting several types of gemstones, such as opal, emerald, and sapphires. Opal is Ethiopia’s largest gemstone export, accounting for more than 90% of all gemstones exported out of the country. However, the country is not getting the maximum benefit as the sector faces a challenge with cutting and polishing. The government should support and encourage exporters to sell only cut and polished stones directly to the global markets.

Ethiopia has the potential to be one of the leading exporters of lithium. Recently, an estimated 250 thousand tons of proven reserve of lithium oxide discovered at Kenticha mine. Lithium has several uses in the industry.

Recently, the rise in demand for electric vehicles increased the demand for lithium batteries.

Global demand for lithium is expected to surge over the next decade, owing largely to the evolution of electric vehicles. Hence, the country should be ready to utilize this immense opportunity.

The potash reserve in the Danakil, Dallol Depression of the Afar region is one of the highest in the world. Prospecting for iron, copper, and base metals is also in progress in many regions of the country. Ethiopia has an estimated more than 70 million tons of iron ore deposit in Amhara, Oromia, and Tigray region.

As Iron is the key element for the manufacturing of steel, local demand for iron is expected to continue because of the infrastructure boom in the country. The government is currently working with international mining companies to explore and develop iron ore.

The country has also a variety of industrial minerals such as limestone, clays, sand, gravel, diatomite, kaolin, bentonite, silica, barite, gypsum, and talc. These minerals are essential raw materials for cement, ceramics, paints, glass, chemical, and paper industries. Hence, the development and expansion of industrial minerals are very important.

Ethiopia is developing a nuclear power plant. Does the country have enough uranium for the plant?

Uranium has been known to exist in Ethiopia as early as the 1950s. However, no commercial mining happen to date. As far as I know, the government is assessing the uranium deposit in Bale and Borena, in the Oromia Regional State.

The amount of deposit of uranium ore is not yet determined. Uranium also exists at Kenticha together with tantalum. Ethiopia has been exporting tantalite ore without processing. This tantalite ore contains up to 1.5% uranium, which indicates that a significant amount of uranium can be obtained in that region.

How do you evaluate the sugar industry in Ethiopia?

In recent years, the government of Ethiopia has made considerable investments to boost the country’s capacity to produce sugar. This is mainly due to the availability of large areas of suitable low lands and rivers for sugar cane growth, highly conducive climate and soil types, and abundant, hard-working, and easily trainable labor force.

Currently, six sugar factories are producing sugar, and close to ten new sugar factories are under construction in the country. However, there is a lack of product diversification in the industry.

The survival of the sugar industry depends on diversifying beyond sugar production alone. Ethanol distilleries must be built alongside the sugar factories. Expansion of ethanol distilleries and enhancing ethanol production is very vital and can also help the country to reduce imported fuel demand and meet national consumption.

For example, if we produce enough ethanol and achieve the 10% blending target across the country, we can save USD 40-50 million in foreign currency every year.

Other sugar industry by-products-based factories such as pulp, paper, particleboard, citric acid, bakery yeast, furfural, etc.. should be followed. University should start opening the program and establish a core research laboratory related to the sector. Aggressive Investment promotion for both local and foreign investors should be carried out.

What is the status of Biofuel in Ethiopia?

Ethiopia is identified as one of the countries with the highest potential for biofuels in Africa. The government issued a biofuel strategy in 2007 to encourage domestic biofuels production to reduce the dependence on high-cost fossil oil.

Biofuel development in Ethiopia focuses on using sugarcane for ethanol, and jatropha, castor beans, and palm tree for biodiesel production. Ethanol production is linked so far with the public sugar estates and biodiesel with private investment. Ethiopia has been producing bioethanol from the sugar by-product molasses for more than 30 years.

At present, only two ethanol distilleries are operational in the country, which is located at Metehara and Finchaa sugar factories, with a combined capacity of 32.5 Million liters per annum.

Despite the ambitious government strategy in place, the development of biodiesel in Ethiopia remains limited. Currently, no commercial-scale biodiesel operations (apart from three pilot plants) exist. About 64 million liters of ethanol was blended with gasoline in the country from 2009-2018. There is quite small compared to the country’s potential.

Is there a recent activity on biofuel utilization in Ethiopia?

Besides biofuels for land transportation, Ethiopia has a high potential to develop sustainable bio-jet fuels for the aviation sector, which is coming under increasing pressure to reduce its CO2 emissions. Currently, the aviation sector contributes between 2% and 2.5% of global CO2 emissions.

However, by 2050 global aviation could account for over 22% of all CO2 emissions. In light of this, the Roundtable on Sustainable Biomaterials (RSB), a global, multi-stakeholder independent organization in partnership with Boeing is currently developing a sustainable aviation fuel roadmap for Ethiopia. The goal is to establish Ethiopia as a regional hub for sustainable aviation biofuel.

Is there anything you would like to convey as a final point?

Ethiopia is endowed with various natural resources, which have a huge potential to contribute to the country’s long-term economic development and job creation. However, no country can develop or grow economically without peaceful coexistence among its citizens.

Peace, security, stability, and good governance are vital to achieving sustainable economic development. Thus, we should all strive to bring peace and stability to the nation so that we can all benefit and prosper together.

The Ethiopian herald December 26/2020