BY BACHA ZEWDIE
Among the manufacturing industries that use mineral resources are factories that produce cement, blocks and other products in the construction sector. Factories that produce paint and glass, as well as building materials and home furnishings, also use mineral resources.
These manufacturing industries are also encouraged to use resources from local mineral resources. Experts in the field say that the use of local mineral resources will save the time it takes to bring the resources from abroad, avoid spending foreign currency on purchases, and enable the proper use of the country’s resources.
In particular, the use of domestic mineral resources is an option to overcome the problem that Ethiopia is currently facing with the shortage of foreign currency in the manufacturing industries to import resources from abroad. On the other hand, as a country, the local economic reforms will lead to economic growth in the mining sector.
Not only gold, precious jewelry, natural gas and oil, but also the mineral resources, which are used as inputs for the manufacturing industry, have contributed significantly. According to experts in the field, in addition to supplying mineral resources to local manufacturing industries, there is an opportunity to earn foreign exchange by supplying value-added resources to foreign markets.
In this way investment can be attracted. Dr. Guta Legese, Director General of the Mining Industry Development Institute at the Ministry of Mines explained that the mining sector is being led by skilled manpower and technology through a joint agreement with universities to build capacity. While asked about what is being done in terms of creating a favorable environment for the use of domestic mineral resources, Dr. Guta stated that the ministry is working in this regard.
As to him, a survey was conducted on the resource use, capacity and administrative conditions of the manufacturing industries that benefit from mineral resources, as well as the availability of resources and the status of the resource. In the survey, if there is a need to change input, the prerequisites for change are also included in the survey.
It was identified in the survey that there are gaps in manufacturing industries that are facing problems related to the current national situation and the acquisition of foreign currency needed to purchase factory spare parts and other reasons. Dr. Guta pointed out that the chemical industry, Tabor Ceramic, and cement factories in Awash Melksa were included in this survey.
Among the things seen in the survey are from where the manufacturing industries use the mineral resources and who their suppliers are and their options. He mentioned that the chemical industry in Awash Melksa uses kaolin as a mineral input. At the same time, a survey has been conducted on cement factories. Addis Ababa University has also been asked to conduct a study regarding the cost of cement production and the source of the cost.
According to him, the research work is being done on 12 cement factories, including the different types of mineral resources used by the factories, including coal, the amount of supply and value added or not, and the benefits of the young people who are organized by associations that supply the inputs to the factories.
In the current situation, Dr. Guta mentioned that the highest mineral input of cement factories is coal, and based on the results of the study, the industries and mineral producers will continue to work on the basis of the support and supervision they need from the government, and they will make recommendations checking the gaps of both manufacturers and factories.
In the future, when the ministry has or establishes its own workshop for training and testing, it can conduct testing on different types of minerals and when it reaches the level of which mineral is used for which production industry, it can reach the level of better supply of inputs in terms of quality and quantity, he said.
Capacity building is underway via short-term training for the regional experts who are engaged in the sector. Efforts are being made to facilitate the conditions for working together with the universities as well, by consulting with the regions in the discussion forums according to their focus areas. For instance, they have started working with universities in the Benshangul region in relation to coal, gold and marble and this work will continue in other areas as well.
Besides, manufacturing industries have experience of using local resources, Dr. Guta said. In particular, the cement manufacturing industry is mentioned as it has been dependent on imported coal for a long time. The lack of use of coal also made the domestic resource look bad. Recently, research-based measures have been taken to improve the use of coal as a resource in the country.
Like coal, there are other resources that are being used to a great extent. Due to the fact that mineral types such as sulfur are not being used for mining, the situation is seen that producers are using them from abroad. A long-term plan is being made to replace this with local input, and there are developers who have obtained license to engage in the sector and are active and are being supported, Dr. Guta said. “In terms of creating a market, in the future, in connection with government projects, encouraging local investors to produce on their own, the efforts will be strengthened so that the procurement will focus on local producers,” he said.
Regarding the supply, with the government’s new incentive focus, those who supply the mineral in raw form and those who supply value added will be encouraged. In this regard, the stakeholders of the sector, including the manufacturing industries, are required to work together. It is not only about providing industrial mineral inputs to local manufacturing industries, but there is an opportunity to provide value added resources to the foreign market. Dr. Guta recalled that in the past, cement factories used to supply raw materials to the foreign market that were not up to the standard of cement and could not continue.
He pointed out that the factories are under pressure to supply to the foreign market as they used to do. “Providing value added product is encouraged, but the investment is high. An idea for the government to add incentives to the cost of transportation has been discussed at the level of policy makers and the matter is being looked into. This will be one of the changes in the future. But it is not possible to sell resources without adding value,” he said.
Dr. Desalegn Gezahegn, a lecturer in the Department of Geology at Wolo University, is known for consulting in the mining sector and conducting research on environmental impacts related to development. He said that minerals are not only gold measured in grams and precious jewels but others including stone that Ethiopia is fortunate with.
The use of mineral resources for various materials has been around since ancient times. Clay and brick, for instance, have been used by ancestors for construction. It is not appropriate to import resources that have been used since ancient times. 10 percent of the types of minerals that cover Ethiopia’s land are used as input for the manufacturing industry and it is upsetting that there is inability to convert these into production, he explained.
As to Dr. Desalegn, mining has been exhausting for some time, but after that time, it will benefit both the individual and the country. He also mentioned that the leader of the sector is focusing on something that creates pressure instead of supporting the developer through a strengthened system as another reason for the gap. “The investor should engage in a job that earns dollars instead of going to the banks and ask them to bring dollars,” he said.
Dr. Desalegn pointed out that the mining sector has also been taken into consideration when Ethiopia is transitioning to industry. The government should have a system that encourages the investor down to the bottom structure. Research activities in universities have not stopped. The problem is their application. “If the research is not converted into action, it will be a lamp in a vat. A lot of money is spent on research. But it will be wasted,” he said, stressing that universities and investors should work together.
While explaining about the mineral wealth in South Wolo area of Amhara region, Dr. Desalegn pointed out that there are limestone, gypsum, and glass factory materials that can be used as raw material for cement factories in the Beshro River, along the Abbay Valley, and coal in areas called Kuta Ber Ambasel Wuchale around Dese, and iron ore in the North Wolo Borena area.
He mentioned that the iron ore is used by the local farmers to make agricultural tools in a traditional way. There are also precious gemstones like the Wolo opal found in Wolo Delanta. He said that the natural fuel resources that have come out of the ground in Woreilu are being used by the local farmers for Kuraz lamps. Dr. Desalegn said that 70 to 80 percent of Ethiopia’s mineral wealth has not yet been identified.
THE ETHIOPIAN HERALD TUESDAY 20 JUNE 2023
