has been said time and again that Ethiopia's natural resources are barely
utilized, even though nature endowed her with a large number of mineral
resources. Recent geological studies and explorations have confirmed the
presence of deposits of platinum, tantalite, soda ash and
phosphate rock as well as gemstones such as diamonds and sapphires; industrial
minerals including potash; and other precious and base metals.
geological setup is favorable for the occurrence of metallic, industrial, and
construction minerals, dimension stones, and precious and various types of gemstones.
Gold, platinum, tantalum, potash, salt, limestone, marble, granite, iron,
bentonite, diatomite, phosphate rock, coal, gypsum, clay, opal, mineral
water and construction minerals are the major minerals identified
through exploration works carried out so far. A gas condensate field has been
also defined in the eastern part of the country and is under development.
mineral wealth, combined with its skilled and low cost labor promises a
thriving and profitable mining production. However, the revenue from mining and
other valuable natural resources that found in the ground account for less than
one percent of GDP, yet, that mainly depended on gold which has been produced
from placer deposits mainly by the artisanal miners for several thousand years.
if gold mining is a relatively better performing sector, Ethiopia earned only about
USD 1.7 billion in 2012 from five tons of gold per year. However, according to
recent data, Ethiopia's gold reserves are estimated above 500 tons. The
government estimated that production could rise to 40 tons a year from just
over four tons in 2012. Development of these resources is a cornerstone of the
government's export-oriented growth strategy and means there is less reliance
on agriculture for diversifying the economy.
first major change of direction in the development of the mining sector took
place in 1991, when the government adopted a free market economic policy,
limiting the role of the public sectors in economic activity. In accordance
with the economic policy, the mineral sector was opened up to private investors
in 1991, stimulating large investments, advanced technology and trained
Mining and Income Tax Proclamations in 1993 and supporting Mineral Operations.
Regulations in 1994 helped Ethiopia create an environment conductive to private
capital investment by local and foreign companies in the mining sector. The Mining
Proclamation provided the license holder with a number of incentives such as
low royalties, exemption from customs duties and taxes on equipment, machinery,
vehicles and spare parts necessary for mineral operations, and a 10-year loss
result, the sector expanded at double digit rate for consecutive years. Today
about 265 domestics and international companies have hold prospecting, exploration
and mining licenses for hard minerals.
second major shift started taking place in 2010 with the launch of the five
years Growth and transformation Plan. The GTP set ambitious targets for the
mining sector in five aspects. The Geo-science Data Coverage and Mineral
Exploration program is one of the main ones. The main aim of this program is to
collect, generate and disseminate geo-science data. To realize this aim,
various activities have been planned and performed under the GTP.
disclosed a few months ago, under the five year Growth and Transformation Plan,
the Ethiopian Geological Survey has been working to boost the country’s
geological mapping coverage from 51 percent in 2009/10 to 80 percent by 2015.
On the other hand, coverage of gravity survey, hydrogeological mapping and
engineering geology reached 95 percent, 62.6 percent and 20.9 percent
respectively. These geological surveys help delineating areas where minerals
are found which will facilitate the engagement of governmental organizations
and mining companies. Similarly, collecting vital information on minerals,
ground water, engineering geology and geo-hazards information enables to
identify localities where natural disasters such as volcano, earthquake and
landslide could occur.
other major program of the GTP's mineral sector development program is the Mineral
and Petroleum Investment Expansion Program. Various activities were performed
under this program.
other major area of transformation is the Artisanal Mining and Marketing
federal government enacted a Mining Proclamation 678/2010, which is hailed as
a model legislation for other African countries as it provided clarity and
formal recognition of artisanal mining. Different activities to formalize
informal miners and smugglers. Accordingly, the government provided technical
assistance provided to traditional miners and legalization of the activities of
gold miners, among others. He said over 80 vendors and over 50,000 labourers
have benefited from the mining activity. Efforts are underway to mine one
quintal of gold valued at over 840 million birr in this Ethiopian fiscal year.
the other hand, the Geosciences Sector Research and Development Program is
aimed to undertake problem-driven research and technology transfer across a
broad range of geosciences and introduce appropriate technologies and new
methods in the mining sector. New technologies and working methodologies have
been introduced; published documents and books have been collected and
distributed to all stakeholders. The national scientific instruments inventory
of the sector have been accomplished, while the integrated Geo-scientific
research in Blue Nile basin and integrated project in same basin and urban
geosciences program are on track.
highly notable progress in the extraction of Ethiopia's mineral resources is
the works to produce fertilizer for the next cropping season. As per the GTP,
Ethiopia envisions building eight fertilizer companies in the Oromia Regional
state. Out of the envisaged fertilizer producing companies planned to be
constructed in Oromia, five are for Dap and the rest are for Urea.
a feasibility study conducted in relation to coal deposits discovered in the
area last year in Yayu wereda of the Illubabor zone, in the Oromia Regional
state the plan to build the eight fertilizer companies was revised. As per the
study conducted, two Urea fertilizer factories and one Dap fertilizer factory
will be erected in the area. The construction of Yayu fertilizer factory number
one and two will reach 65 percent and 33 percent completion rate, respectively,
this year. The design work for the Dap factory is already completed, while
civil work and equipment production is underway.
has been also reported that the feasibility study to construct triple super
phosphate and single super phosphate factories is ongoing. Meanwhile, the
construction of two organic fertilizer producing companies is in progress in
two unspecified regions of the country, bringing the total number of factories
to be constructed to seven as opposed to the original plan of building eight
this Ethiopian calendar year, fifty percent of the construction of all
fertilizer factories will be completed. Based on the realities on the ground,
Ethiopia will produce fertilizer for the 2013/14 cropping season.
to government reports: The construction of its first-ever fertilizer factory in
its history; in Yayo wereda, Illubabor zone, Oromia Regional state, 625km West
of Addis Ababa, at a cost of close to 800 million birr is has been started. The
first phase of the construction of the Yayo Fertilizer Factory has been
completed four months ahead of schedule. The 12 million birr feasibility study
conducted by COMPLANT, a firm that studied the potential of Yayo, reported that
around 100 million tons of coal was found in the Yayo area. It is estimated
that the coal deposit in the area has the potential to produce 300,000 tons of
Urea, 250,000 tons of Dap, 20,000 tons of ethanol and 90MW of electric power
annually for decades.
the government is taking another major step to transform the mining sector by
seeking admission to the Extractive Industries Transparency Initiative (EITI).
EITI is a global coalition of governments, companies and civil society working
together to improve openness and accountable management of revenues from
Extractive Industries Transparency Initiative is a global initiative launched
by the then PM of U.K. Mr. Tony Blair in 2002. It is an International
multi-stakeholders initiative of governments, companies and civil society
working to strengthen governance by improving transparency and accountability
in the extractive sector. EITI involves a process by which the
payments made by companies and revenues received by governments are
published in independently verified reports. The process is overseen and governed
by a multi-stakeholders working group represented from government,
civil society organizations and extractive companies.
EITI will help countries to efficiently collect the revenue generated from the
extractive industry, supports anti-corruption and good governance agendas of
countries and establish citizen trust in public institutions and extractive
companies. Citizens would be able to hold government accountable in the use
of revenues collected from the extractive companies. A transparent
system will bring conducive investment climate and attract more direct foreign
government of Ethiopia has recognized the contribution of EITI to reduce
poverty, fight corruption and establish good governance, transparency and
accountability in the country, and has decided to join and implement the
extractive industries transparency initiative. The government is also
committed to work with the stakeholders for the development of the
mining industry and bring sustainable development.
Ministry of Mines is the government organ that is responsible for
the implementation of EITI in Ethiopia. The Minister of the Ministry
of Mines is the leader and chairman of the multi-stakeholders
“National Steering Committee - NSC” assisted by the state minister of the
Ministry of Mines.
National Steering Committee has 17 members represented from the three
multi-stakeholder groups; the government, the civil society and Extractive
companies. It includes the Minister and State Minister of Mines who are
the chairperson and deputy chairperson of the committee respectively.
The NSC is the governing body of the Extractive Industries transparency
initiative in Ethiopia. The EITI Implementation Secretariat (IS) is established
and hosted in the Ministry of Mines. The secretariat is responsible for
the day to day activity of EEITI and will assist and support the NSC.
objective of Implementing EITI in Ethiopia are: To establish a system
through which companies and government disclose the payments and
revenues generated from the extractive sector in Ethiopia; To carry out
reconciliation and/audit of the disclosed statement of companies and
government by independent administrator; To develop a mechanism through which
the citizens of Ethiopia access all the information regarding the
extractive industry; To establish a forum under which all the
concerned parties; the government, the civil society and extractive
companies work together for the development of the mineral industry
of the country and bring sustainable development; To establish transparency
and accountability in the management of mineral resources including oil and
gas and to foresee the minerals development of Ethiopia play a major role on
the socio economic development of the country for the benefit of Ethiopians.