The mining sector plays a crucial role in the economic development of nations around the world. In the case of Oromia State in Ethiopia, the mining industry has emerged as a significant contributor to the region’s growth and development. This article aims to provide an overview of the mining sector in the country and Oromia State, highlighting its performance, opportunities, challenges, and potential for future growth.
Oromia State, located in the central part of Ethiopia, is rich in diverse mineral resources. The state is known for its vast deposits of minerals such as gold, tantalum, nickel, gemstones, marble, limestone, and other industrial minerals. These resources offer immense potential for economic growth and attracting investments in the mining sector.
The Ethiopian government has recognized the importance of the mining sector in driving economic growth and has implemented several initiatives to promote responsible and sustainable mining practices in Oromia State. The government has introduced investment-friendly policies, streamlined licensing procedures, and established regulatory frameworks to attract domestic and foreign investments in the sector. As a result, 163.74 million USD was gained during the past nine months of this fiscal year.
Over the past decade, the mining sector in Oromia State has witnessed significant growth. The extraction and processing of gold and tantalum, in particular, have contributed to the region’s economic development. Several large-scale mining projects have been established, creating employment opportunities and generating revenue for the state.
The growth of the mining sector in Oromia State has had a positive impact on the local economy. The industry has created job opportunities for thousands of people, both directly and indirectly. It has also stimulated the growth of supporting industries, such as transportation, construction, and services, leading to improved livelihoods and increased income for the local population.
Despite its positive contributions, the mining sector in Oromia State faces certain challenges and concerns. One of the primary challenges is the need to ensure responsible and sustainable mining practices to minimize the environmental impact of mining operations. Proper management of waste, water resources, and land reclamation are essential to mitigate the potential negative effects on ecosystems and local communities.
Another crucial aspect of the mining sector in Oromia State is community engagement and benefit sharing. It is essential to establish effective mechanisms for involving local communities in decision-making processes and ensuring that they receive a fair share of the benefits derived from mining activities. This can include infrastructure development, education, healthcare, and other social welfare initiatives.
The mining sector in Oromia State holds tremendous potential for further growth and development. As technology advances and exploration techniques improve, new mineral deposits may be discovered, expanding the resource base and attracting additional investments. Moreover, the government’s commitment to promoting the mining sector and improving the investment climate bodes well for the future prospects of the industry.
The mining sector in Oromia State, Ethiopia, has experienced significant growth and has become an important driver of economic development. The region’s rich mineral resources, coupled with government initiatives and policies, have attracted investments and created employment opportunities. However, it is crucial to address environmental concerns and ensure community engagement and benefit sharing to sustain the sector’s growth. With responsible mining practices and continued government support, the mining sector in Oromia State has the potential to contribute significantly to the region’s prosperity and development in the years to come.
The Ministry of Mines revealed that 287.28 million USD was secured from minerals export during the last nine months of the current fiscal year.
Mines State Minister Million Mathewos told The Ethiopian Press Agency (EPA) that a plan was set to earn 387.28 million USD from minerals export for the reported period while the performance achieved 74.11 % of the target
According to him, 3.023 tons of gold, 69.79 tons of tantalum, 11,176 tons of lithium ore, 100.563 tons of ornamental minerals and 32, 141 tons of industrial minerals were exported to the foreign market during the last nine months. The income was made by supplying over 43,491 tons of minerals to the foreign market. This current revenue surpassed that of the past year same period by 114.19 million USD.
The State Minister also noted that apart from the mining expenses business, 173.18 million Birr income was obtained from royalty, community development fund and licensing in the reported period. “The aim is to increase the international market networks by attracting those who have the capacity and experience to participate in the mining industry.”
Efforts have been made to promote Ethiopia’s mineral potentials in two rounds of the Mining and Technology Expo, as well as in the international mining conference in Australia and South Africa.
Due attention has been given to enable Ethiopia to utilize its potential in the mining sector. Accordingly, the Mining Council has been formed and put into action to ensure that projects started in the sector are completed on time.
To increase import substitution, monitoring and support activities have been done for companies engaged in coal washing, ceramic, marble, granite and terrazzo products and increase their performance, Million remarked.
According to scholars and experts on the sector, Ethiopian government should establish a clear legal and regulatory framework for mineral extraction in Oromia, ensuring that it is aligned with national laws and international best practices. This framework should cover areas such as licensing, environmental protection, labor rights, revenue sharing, and community consultation.
The government needs to actively engage with local communities, including the Oromo people, to understand their concerns, address grievances, and ensure that the benefits of mineral extraction are shared equitably. Meaningful participation and consultation can help build trust and mitigate potential conflicts.
The Ethiopian government must prioritize environmental sustainability by implementing measures to minimize the impact of mining activities on ecosystems, water sources, and biodiversity. This may involve conducting comprehensive environmental assessments, enforcing strict regulations, and promoting responsible mining practices.
To effectively exploit mineral resources, the government should invest in essential infrastructure such as roads, railways, power supply, and telecommunications. Developing infrastructure will facilitate transportation, reduce costs, and attract private investment in the sector.
The government should focus on building the technical and managerial capacity of its institutions responsible for mineral extraction. This includes training personnel in geology, mining engineering, environmental management, and regulatory oversight, which will enhance the sector’s efficiency and effectiveness.
The government will be advised to opt to create an attractive investment climate by streamlining bureaucratic procedures, ensuring transparency, and offering incentives to domestic and foreign investors interested in the mineral sector. This can help attract capital, technology, and expertise to support sustainable and responsible mining operations.
The Ethiopian government should establish robust systems for revenue collection, management, and distribution to ensure that the benefits from mineral extraction are shared fairly. Transparent mechanisms for tax collection and revenue allocation can contribute to economic development, infrastructure investment, and social programs.
The government should encourage local economic development by promoting linkages between the mineral sector and other industries. This can be achieved through initiatives such as local procurement requirements, job creation, skills development, and the development of downstream industries that utilize mineral resources.
The government should require mining companies to fulfill their social responsibilities by investing in community development projects, such as education, healthcare, infrastructure, and livelihood diversification. This can help alleviate poverty, improve living conditions, and foster sustainable development in the region.
The government should establish effective monitoring and enforcement mechanisms to ensure compliance with mining regulations, environmental standards, and social obligations. Regular inspections, audits, and penalties for non-compliance can promote responsible mining practices and safeguard the interests of local communities.
These considerations provide a starting point for the Ethiopian government to maximize the benefits of mineral extraction in Oromia. It is crucial to adapt these suggestions to the specific context, taking into account local dynamics, stakeholder input, and evolving industry practices.
BY LAKACHEW ATINAFU
THE ETHIOPIAN HERALD FRIDAY 3 MAY 2024
