The recent heated dispute and controversy over the extension of Midroc Gold's concession period to extract gold in Lege Dembi, Guji Zone in the Oromia Regional State for an additional 10 years ended with the suspending of the company's license.
A robust public grievance surfaced the past couple of weeks, alleging the company of disposing chemicals within the surrounding area and causing environmental pollution. The anger and the protests of the localities of the Guji zone in the Oromia Regional State reached a climax beginning early last week. The protesters claim that the discharge from the company is causing skin irritation, complications in women's delivery, child illness and death.
The grievance and unrest triggered the Ministry of Mines, Petroleum & Natural Gas (MoMPNG) to suspend Midroc Gold Mine's license starting May 9, 2018. The site is the largest gold producer in the country locating 500km south-west of Addis Abeba in Guji Zone in the Oromia Regional State. It is under the umbrella of Midroc Ethiopia Technologies Group, that has 21 companies under it and whose board chairperson is jailed in Saudia Arabia suspected for corruption.
The company is the major contributor to the gold production and foreign exchange from gold exports. Last fiscal year, the country generated 231 million dollars from exporting gold. In the first three quarters of last fiscal year, Midroc Gold alone extracted 3,800kg of gold.
"The license remains suspended until completion of the assessment which will be conducted by an independent body," said Bacha Faji, Public Relations & Communications Director of the Ministry. "The assessment will be conducted on samples of soil and water from the area."
The Ministry claims that different environmental assessments were conducted by the ministry, environmental auditors, the company itself and experts from Addis Abeba University (AAU). All of the assessments concluded that the chemical discharge from the company is up to the norm of international standards, according to the Ministry.
However, Agizew Nigussie head of Addis Abeba Civil Engineering School of Environment, confirms that the University made no laboratory test for Midroc Gold.
"Individuals from the University might have done it," he told Fortune.
Midroc Gold strongly resists the claims from the localities. The special publication of the company launched mid last week states that discharge from the site is stored in a tailing dam while any discharge passing through a detoxification plant.
"The waste is only discharged when the company confirms its compliance with internationally accepted water quality," reads the newsletter of the company.
Midroc Gold, which was established in the late 1990s by an Ethio-Saudi Arabian tycoon, Sheik Mohammed Al-Amoudi, his wife Sofia Salah Al-Amoudi and the government of Ethiopia, uses Sodium Cyanide in its extraction process. The chemical is registered as a hazardous substance in the Occupational Safety & Health Administration (OSHA), which adopts and enforces health and safety standards.
The company's website claims that Midroc Lege Dembi Gold Mining open pit mine has an average annual production of 4.5tn of gold. Initially, the company took a 20-year concession from the government, which has a two percent share on the company, for 172 million dollars. It commenced production in August 1998.
In its first 10 years of operations, the company extracted 34,000kg of gold from the site, generating close to half a billion dollars. Just 10 years after it started operations at Lege Dembi, it got a 10-year concession period from the then Ministry of Mines & Energy (MoME) for the extraction of 20,483kg of gold from the Sakaro area, three kilometres away from Lega Dembi gold belt.
The recent and last expansion of the company was made three years ago. It has announced a 15-year project to extract 34tn of gold in Benishangul Gumuz Regional State with an investment of 4.2 billion Br, expecting 27 billion Br in revenues.
"In response to the communities' claim, the Ministry is preparing Terms of Reference (TOR) to conduct a new assessment," Bacha told Fortune.
Our effort to reach Ayalew Tebeje, deputy general manager for Lege Dembi and Sakaro mine operation bore no fruit as he did not respond to the telephone and e-mail requests from Fortune.