BY BACHA ZEWDIE
Ethiopia’s virtually untapped, diverse and vast mineral resources offer huge potential opportunities for exploration and development. These include – but are not limited to – tantalum, potash, gemstones, gold, iron ore and various industrial, energy and construction minerals. This extraordinary potential coupled with improving government policies and regulations means Ethiopia is now very much on the radar screen of international mining investors.
As witnessed by some officials of continental institutions, Ethiopia’s mining sector has potential to stimulate economic growth and poverty reduction. The country is rich in mineral resources, including oil and gas, these remained largely untapped, adding mining’s potential to contribute to economic growth and poverty reduction in the country could not be over-emphasized.
With considerable gold reserves, and a rapidly-developing governance structure in place, Ethiopia could be one of the most attractive investment destinations for the global mining industry, especially for foreign firms looking for a stake in the gold sector. According to the Extractive Industries Transparency Initiative (EITI), Ethiopia boasts around 200 tons of gold, and with a further 360 million tons of coal and 69 million tons of iron, there is every reason to be optimistic about the country’s mineral future.
Regardless of its untapped potential, the sector contributed to less than 1 percent of Gross Domestic Product (GDP), 14 percent of exports, 1 percent of government revenue and was only able to create 4,000 formal jobs in 2018. In its Growth and Transformation Plan, Ethiopia has set as a target for its mining sector to contribute to 10 percent of GDP by 2025. To achieve this target and to successfully leverage its mining sector for economic growth and sustainable development, the country will have to learn from the experiences and good practices of more mature mining economies and make use of available frameworks and guidelines.
Acknowledging the above suggestion, commendable activities towards exploiting the sector’s resource are underway. As a result of utmost effort exerted to the sector by government and the private sector, more than 458 million USD was earned from minerals exports during the past months of this fiscal year, Ministry of Mines reported.
In the last nine months of the fiscal year, 458.7 million USD was earned from the export of minerals. During the same period, though planned to produce 8.2 million tons, cement factories could produce only 4.8 million tons.
The Minister of Mines, Eng. Takele Uma recently presented a nine-month report of his office to the 9th regular session of the 6th House of Peoples’ Representatives of the FDRE. The Minister said in his nine-month report: Various companies and mines have been shut down due to insecurity in various parts of the country.
He said the issue needs to be resolved permanently. To this end, The Ministry is working closely with security agencies to address the security challenges facing the sector. Therefore, his office is currently working with the Ministry of Defense, the Federal Police, the National Intelligence and Security Agency and the Artificial Intelligence Agency to come up with viable solutions for the problems.
He also said that, the effort exerted to working in collaboration with security forces to address the security threats is yielding results in 14 mining sites. He further said that, an agreement had been reached to set up a police department at the federal and state levels. As a result, the procurement of logistics supplies for the establishment of the departments has been completed and the necessary information has been provided to the security forces.
He added that if the security situation can be improved with such an organization and sustainable solutions are placed in, the current benefits being gained from the sector could be advanced. Be it is, he said that a total of 458.07 USD was earned from gold, jewelry and industrial minerals exported in the last nine months of the current budget year.
The minister further elaborated that during the last nine months, 6,947 kilograms of gold was supplied to the National Bank of Ethiopia. Adding, he said that 2,337 kg of jewelry; 79 tons of tantalum; 7,363 tons of industrial minerals and 2,000 tons of sodium bromide were produced for the first time and provided to the international market.
In addition to the minerals exported, 4.6 million tons of industrial minerals and 36.8 million cubic meters of construction inputs are expected to be supplied to industries in the domestic market. On the other hand, 5 million quintals of table salt and 588,000 quintals of industrial salt have been put on the market, he said.
On the other hand, as of the Minister of Mines, there is a huge gap in the cement production, and marketing chain which is the main component for the construction sector. He said that the total cement factories in the past nine months have produced only 4.8 million tons out of the 8.2 million tons planned. And this is only 58 percent of the plan, he added.
According to the Minister’s explanation, intervention of external forces had adverse impact on the success of the production plan. On top of this, as to him, the cement factories are facing internal problems, especially lack of skilled man power and management problems. Moreover, In addition to the shortage of coal, the factories are also suffering from hindrances of power outages, production machinery shortages and lack of adequate manpower.
According to the Minister of Mines, various measures are being taken to alleviate the problems the cement factories faced. To this end, construction of coal plants has begun in various parts of the country to address the shortage of inputs such as coal.
He added that a product and marketing guideline has been prepared and implemented in collaboration with the Ministry of Trade and Regional Integration and the Cement Producers’ Association. He said the guideline is expected to create a smooth flow of factories and cement consumers.
The Ethiopian Herald June 7/2022
