Addis Abeba — For centuries, the art of gold mining has thrived in the lowlands of Western, Northwestern, and Central Tigray, where the riches of metallic minerals within the Precambrian basement rocks have beckoned generations of prospectors.
Especially during periods of agricultural downtime, artisanal miners have embarked on expeditions along the river banks, lowlands, and gorges with the aim of extracting gold. Despite the enduring tradition of artisanal mining that has sustained communities for generations, the transition to large-scale industrial operations has remained elusive.
This narrative appeared poised for change, with companies like Ezana Mining Development, a subsidiary of the Endowment Fund for the Rehabilitation of Tigray (EFFORT) Development, heavily investing in large-scale gold plant at Terakimti, in northern Tigray, near Shire Endaselassie town.
However, the specter of the war, unleashed in November 2020, dwarfed such endeavors, altering the trajectory of an industry poised on the brink of transformation.
Ezana is among the 61 industries in Tigray reported to have incurred substantial damage due to the war.
Over a year has passed since the cessation of the two-year war in Tigray following the signing of the Pretoria peace accord. In the wake of this agreement, numerous local and foreign gold mining enterprises are preparing to resume their exploration and extraction activities within the Tigray region.
However, despite this development, there are indications that circumstances may be taking a turn for the worse.
Concerns have emerged recently regarding the involvement of entities operating without proper legal authorization, leading to heightened tensions between investors and the local community, particularly unemployed youth.
This situation has also posed challenges to regulatory supervision and environmental conservation efforts.
A geology specialist who works at the Tigray Land and Mining Bureau and chose to remain anonymous underscored the increasing tensions in gold-rich areas, linking them to the engagement of "external entities" devoid of legal endorsement from either federal or regional authorities.
The geologist also directs attention to the interim administration of Tigray for its lack of sufficient oversight, which has led to irregularities within the mining sector, including unauthorized mining activities and environmental degradation.
Artisanal mining primarily takes place in the northwestern region of Tigray, where noteworthy operations are established in locales such as Tsimbla, Asgede, Adi Daero, and Seyemt Adiabo.
In central Tigray, areas such as Rahma Adrbat, Nadier, Kola Tembien, and Hawazen are acknowledged for their substantial contributions to gold production within the region.
After the signing of the Pretoria peace accord, the interim administration of Tigray has initiated the process of granting licenses to investors who satisfy the designated criteria.
However, despite these efforts, persistent challenges remain, as highlighted by the geologist.
"Illicit actors persist in flouting mining regulations by providing equipment to unauthorized mining operators and participating in gold smuggling activities," he remarked. "
Inadequate oversight by the interim administration of Tigray has resulted in irregularities within the mining industry." A geologist who works at the Tigray Land and Mining Bureau
While licenses for large-scale mining operations are granted at the federal level, regional bureaus possess the authority to license medium-scale and artisanal mining activities within their respective jurisdictions.
The geologist further emphasized a particular concern regarding the environmental ramifications of unauthorized and traditional mining techniques, which entail the utilization of chemicals such as mercury, thereby posing substantial health hazards to both miners and the neighboring communities.
"The absence of formalized rules and regulations, along with inadequate oversight, exacerbates these challenges," he highlighted.
The regional authorities have acknowledged the prevailing situation.
Fiseha Meresa, director of licensing and administration at the Tigray Land and Mining Bureau, emphasizes the controversies surrounding gold mining operations and their environmental ramifications, encompassing concerns such as water and soil erosion.
He asserts the need for legal oversight and environmental protection measures to ensure the sustainability of such activities while also securing societal benefits.
"The interim administration of Tigray is proactively engaging the community in deliberations regarding the prudent utilization of resources," remarked Fiseha.
Gilded hopes dashed
Despite the endeavors of regional authorities to govern the mining sector, challenges endure, with more than 300 licensed associations conducting operations across different zones of the region.
An investor who spoke with Addis Standard under the condition of anonymity and has commenced gold mining operations within the Tigray region highlights the challenges entailed in initiating mining endeavors amidst the current circumstances.
The ongoing dispute revolves around the northwestern region of Tigray, specifically within the Asged district and Hitsats kebele, renowned for their considerable reserves of gold minerals.
Endorsed by the regional land and mining bureau, this investor asserts that he initially undertook construction activities, investing in a public road project valued at 3.7 million birr, thereby exemplifying a commitment to social responsibility.
"Unlike many other mining entities, our company has prioritized secondary gold deposit mining, a relatively uncommon pursuit aimed at minimizing sedimentary and environmental pollution," he elucidated.
For medium-scale gold mining that takes place on secondary deposits, the company obtained a license encompassing a minimum of 10 hectares of land along the river, with an initial investment of 120 million birr and a workforce consisting of 57 employees.
Nevertheless, the company's efforts have faced numerous obstacles.
"Despite undergoing a stringent licensing procedure spanning several months, the company encountered setbacks from the outset, witnessing a complete cessation of activity merely six days into its operations," he remarked. "The proliferation of illicit mining activities, driven by well-coordinated factions taking advantage of the situation, exacerbated the company's challenges."
On 15 March, 2024, the investor faced a significant confrontation when armed groups forcibly expelled the company's employees from their camp, leading to violence against the workers and the confiscation of machinery.
"Despite lodging petitions with pertinent regional authorities, the company's appeals for assistance were met with limited intervention, leaving all of us susceptible to further assaults," he lamented.
Acknowledging the challenges faced by this investor, Fiseha commented that "the company faced baseless accusations disseminated by certain individuals aiming to discredit its operations, leading to tensions within the community."
"Despite the company's endeavors to undertake beneficial initiatives such as road construction for families of veterans and martyrs, its goodwill was eclipsed by unwarranted setbacks and harassment," he noted.
The director further indicated that foreign consultants retained by the company to address technical deficiencies were misconstrued as exploiters by detractors.
With the increasing presence of mining companies initiating operations in the region, residents are expressing concerns about their inclusion in the benefits arising from these activities. As reported by district authorities, many of these confrontations have resulted in disputes, prompting police attention for investigation.
Regional authorities emphasize that endeavors are underway to integrate unemployed youths into these mining operations by establishing associations. According to Fiseha, approximately 30,000 youths are presently involved in mining activities.
In an interview with state media, Tesfalem Hadgu, deputy head of the Tigray Land and Mining Bureau, articulated that youths organized under different associations are actively engaged in prospecting activities across the 26 districts of the region where gold mines are situated.
Tesfalem underscored that the peace and stability in the region have created an opportunity for the organized youth associations to participate in traditional gold extraction practices. He further highlighted that licensed associations have been granted access to up to 5,000 square meters of gold mining area in their preferred locations since the onset of February 2024.
"However, illegal actors have taken advantage of the region's challenges to exploit gold mines," Tesfalem noted. "Investigations and surveillance are currently underway to pursue legal action against these perpetrators."
Large-scale mining revival hits roadblocks
The initiation of large-scale exploration and mining operations in Tigray is proceeding at a sluggish pace.
Fiseha revealed that there are 29 predominantly foreign large-scale entities in Tigray, all of which are presently in the exploration phase.
According to officials, the operations of the majority of these enterprises remain dormant.
However, a few are taking steps to initiate operations at full capacity.
One of these companies is Sun Peak Metals, a Canadian company, which recently announced the resumption of exploration activities at its Shire site.
Several years ago, Sun Peak Metals received six exploration licenses under its Shire Project, covering an area of approximately 1,450 square kilometers.
However, the company's operations had been halted for a period of three years due to the COVID-19 pandemic as well as the conflict between the federal government and the Tigray People's Liberation Front (TPLF).
Two months ago, the company announced the recommencement of its operational activities, indicating its intention to initiate exploration efforts on three licenses within the Shire Project in the first half of 2024.
Federal authorities have recognized the challenges faced by large-scale gold companies engaged in mineral exploration and development in the region due to the war. However, they stressed operations have been restored due to the stability created following the peace agreement.
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In an interview with state media in July 2023, Million Mathews, the State Minister for Mines, remarked, "There are now opportunities to resume mining exploration and development activities."
Million cited the commencement of operations by the Messobo cement factory as an example of progress and added that efforts are underway to enable other companies to resume exploration and mining activities.
The State Minister recalled that previously, large, medium, and artisanal miners in the region collectively produced up to 900 kilograms of gold annually, supplying it to the central market, thereby establishing Tigray as one of the largest gold-producing regions in Ethiopia.
The huge disparity between the black market and official channels, estimated to reach a maximum of 2,000 birr per gram, acts as a catalyst for gold smuggling." Fiseha Meresa, director at the Tigray Land and Mining Bureau
The recuperation of Ezana Mining Development, the only large-scale company engaged in gold mining operations in Tigray, is also lingering at a gradual pace.
As of present, Ezana has not yet recommenced operations, largely due to the damage incurred by its Terakimti facility near Shire Town during the war.
Founded in June 1993, Ezana has conducted exploration activities in the northern region of the country for more than two decades before initiating mining operations seven years ago.
Upon the completion of the construction of its plant, involving an investment of over $17.8 million in 2017, the company emerged as Ethiopia's second-large scale gold mining enterprise, following MIDROC Gold Mine PLC, which operates at its gold extraction sites in Legedenbi and Sakaro.
Prior to 2020, Ezana held a prominent position in the mining industry, accounting for one-fifth of the gold supplied to the central bank from the region.
In December 2023, Ezana and the National Bank of Ethiopia (NBE) entered into an agreement designating Ezana as the official collector of all gold produced by artisanal miners in Tigray.
Currently, the annual estimated production of the region stands at 200 kilograms of gold.
However, the current collection volume has failed to meet expectations, primarily attributed to widespread gold smuggling activities, which is mostly being driven by significant price gaps between the black market and official channels.
Fiseha contends that this disparity, estimated to reach a maximum of 2,000 birr per gram, acts as a catalyst for gold smuggling.
"The interim administration of Tigray encounters challenges stemming from these market disparities," the director asserted. "Nonetheless, ongoing efforts are underway to effectively mitigate these problems."
