Addis Fortune (Addis Ababa)

Ethiopia: U.S-Based Investment Company Granted Mining License

The Ministry of Mines has issued a mining license to North Holdings Investment Inc - a US-based investment company. Their general manager, Temesgen Mehari, is a prominent businessman whose companies were foreclosed by the Commercial Bank of Ethiopia (CBE).

The agreement, signed on Thursday December 26, 2013, was the first signed by Tolosa Shagi, the state minister, since his boss, Sinknesh Ejgu, left to become the ambassador to Brazil.

The contract allows North Holdings to produce limestone, gypsum, clay and sandstone from 24,513sq km of land in Dejen - 230km from Addis Abeba in the Amhara Region - with a capital of 866.2 million Br.

The contract will be valid for 20 years, with extensions granted every 10 years after that, if the company requests so.

North Holdings will begin the construction of its plant by the end of 2014, Temesgen said after signing the contract.

The company has completed a feasibility study, plant construction site selection and technology and consultant selection, Temesgen said in a speech during the ceremony. He also said that studies have been conducted to hire a turn-key contractor. This plant could create employment for 284 people when complete, according to the press release from the Ministry. This plant will provide raw materials for the North Holdings' cement factory, with a yearly production capacity of 8.4 million tonnes in two lines, Temesgen says.

Over 140 companies, both foreign and local, have so far been given licenses by the Ministry to conduct the exploration and production of minerals, according to the Ministry. In 2011/12, 53 mineral exploration and eight mineral extraction licenses were given, 12 of which are for the mining of limestone, clay and gypsum, and 11 for the exploration of same.

The country's limestone reserve is 171 million metric tons and this is saturated mainly in Oromia, Tigray, Amhara, Harar and Dire Dawa. North Holdings is expected to produce 157.8 million tones of limestone over the next 10 years, the press statement said.

Before moving to the US, Temesgen owned three companies in Ethiopia: Nile International Trading, Nile Coffee Export and Tana International Trading. He lost all of these companies when the CBE foreclosed them and the Central Bank ordered his removal from the insurance firm he presided over.

The charges filed against him by the CBE involved the illegal borrowing of 162.1 million, facilitated by three employees of the bank. He also borrowed money from the Abyssinia Bank, which too had wanted to take foreclosure measures.

He had been living in the US since 2001, and was only briefly back in Ethiopia.

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