Indian mining firm May Flower Mining Enterprise Ltd is to invest $116 million in the Delbi Mining S.C.'s coal mine in south-western Ethiopia, 400 km from here, IANS reported.
The general manager of Delbi, Alemayehu Deressa, said the company was looking for a strategic partner to jointly develop the coal mine, and Mumbai-based May Flower agreed to invest over a three-year period.
May Flower will import mining machinery, mining experts as well as the required finance for exploration and mining works.
"May Flower will own 70 percent of company shares, while Delbi will retain 30 percent", Deressa told IANS.
"We will be responsible for all payable accounts and they will bring the necessary technology, know-how and financing required for the exploration and mining activity," he added.
A joint management team comprising officials drawn from both companies will be set up.
The Delbi coal mine is located in Oromia regional state, Jimma Zone, 400 km from the capital, Addis Ababa. About 53 percent of Delbi Cola Mining S.C. is owned by the Endowment Fund for the Rehabilitation of Tigray (EEFORT) and the balance 47 percent is held by the Oromia Investment Group.
The Delbi Cola Mining concession covers a 39.2 square kilometre lot with an estimated coal deposit of 11.4 billion tonnes.
Ethiopia's coal reserves, ranging from lignite to bituminous deposits, are estimated at around 376 million tonnes. The country has the potential to generate more than 5,000 MW from its geothermal energy resources from where only 7.3 MW power is currently being produced at a pilot plant, according to data from the Ministry of Mines.