Addis Fortune (Addis Ababa)

27 April 2014

Ethiopia: Mining Sector Achieves Just Over Half of Target

Mining-license issuing and renewal, less gold production, gaps in follow up and managing the miners were blamed for the shortfall

Ethiopia's export revenue target from the mining sector fell by a whopping 48pc, as only 93 million dollars was earned out of a plan of 179.4 million.

The Ministry of Mines' (MoM) nine-month performance report expressed concerns, when it presented its report to Parliament on Tuesday April 22, 2014, that the continued fall of the price of gold could hamper the ministry from achieving its target. The ministry is seeking mitigation by trying to boost the supply from artisanal miners and by exporting value added minerals.

Ethiopia's export minerals include tantalum, opal and gemstones, marble, platinum and hydrated lime.

The poor performance is due to the significant decline in the price of gold and the reluctance to sell at that cheap price, said Dereje Wondifraw, planning, monitoring & evaluation higher expert at the Ministry.

The low level of mining-license issuing and renewal, less gold production, gaps in follow-ups and managing the miners and less support for the regional mining bureaus - caused by a lack of skilled manpower - were causes for poor performance. This was stated during the nine month performance report of the Ministry that was held at Ghion Hotel on Tuesday April 22, 2014.

The report and the discussion on the nine-month performance was attended by Tolosa Shagi, Minister of Mines; Masresha Gebreselassie, director of Geological Survey and representatives of regional mining bureaus.

The other gap that was mentioned during the report was the poor performance of the geological survey department, which targeted making a core drilling of 7,150 metres, but managed only 1,114 metres, or 16pc. The report attributed this problem to delays in requests from investors in the sector.

All regions significantly fell short of their targets for the supply of artisanal gold: the least came from Oromia with 25pc; with Benishangul Gumuz and Tigray registering 38 and 48pc, respectively. The better performers, Gambella and the Southern regional state, achieved 53pc and 66pc, respectively.

The representatives of the Afar and Gambella Mining bureaus mentioned there is an unavailability of support from the Ministry and that a gap in communications with the Ministry is a problem they are facing.

The Ministry's overarching failures also included licensing, of which it issued only 28 out of an anticipated 54, and consultations, which brought it 12.76 million Br out of an expected 15.68 million.

Fifty more Small Scale Enterprises were organised out of the planned 100, but these would deliver only 5,752 kg of gold - half the target of 11,809 kg. The revenue collected from the sale of this gold was 232 million dollars.

Gemstone production attained a high 28,038 kg and a revenue of eight million dollars; the target was to make 6,298 kg. Exports of tantalum and platinum also brought in revenues of 1.3 million and 41,000 dollars from 34 tn and 4.6 kg, respectively.

Total export revenue from the sector was 334.3 million dollars. The total amount of gold produced during the period was 8,682 kg, and tantalum 87.6 tn. Out of the 28,038 kg of gemstones, value addition amounted to just 61.67 kg.

The Ministry reported success for petroleum, whose target was just 1.5 million dollars, but actual achievement was 11 million dollars, because a company called Polly G.C.L. signed five agreements for excavation.

Mining exports earned 593.28 million dollars in 2012/13, with 430 million accounted for by gold.

Boston also plans to build another restaurant in Bishoftu (Debre Zeit) town, 47km from Addis Abeba in East Shewa Zone of the Oromia Region. It has two other projects - two hill resorts in Burayu, in the outskirts of Addis Abeba, and Gerallta in Tigray, that have been under construction for the past two years.

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