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The promise to become the backbone of the economy

Article - May 16, 2012
Although the mining sector may be in its infancy, the vision of the government and recent mineral discoveries guarantee foreign currency acquisition and the substitution of imports for exports to support the booming development of Ethiopia
Ethiopia promises excellent opportunities for mineral prospecting. The mining sector is taking gigantic steps to become a pillar for the development of the country and it has generated more than US$500 million in revenue for Ethiopia over the past nine months, according to Sinknesh Ejigu, Minister of Mines of the Federal Democratic Republic of Ethiopia (FDRE).

In addition to gold, Ethiopia is blessed with deposits of tantalum, platinum, nickel, potash and soda ash. The country also holds numerous minerals sought after by the construction and industrial sectors, including marble, granite, limestone, clay, gypsum, gemstone, iron ore, coal, copper, silica, diatomite, and bentonite.

Significant opportunities are arising with the unearthing of the sector’s potential and various success stories are emerging. The government has issued 250 licenses for 150 companies and additional gold reserves are expected to be identified in at least seven regions of the country.

The government is fully committed to helping private investors by endorsing responsibilities and providing preliminary data, geological mapping, and geochemical, geophysical and integrated technical reports. More than 500 metric tons of gold deposits have already been identified by government exploration efforts, according to Mrs. Ejigu.

The future of mining in Ethiopia is bright and the vision of the government is to bring its contribution to 10% of the nation’s economy. The objective is clear. “We want to become the backbone of the economy,” says Mrs. Ejigu. The Ministry wants to make this happen by producing raw materials locally, which will support the development of the country and reduce dependency on imports. In the meantime, the sector is forecast to increase exports and follow the national objective to enhance the acquisition of foreign currency.

However, the mining sector has to be conducive for both investors and the people of Ethiopia. A win-win situation can only be achieved with a commitment from all actors to be responsible toward local communities and the environment. Regarding these issues, the government does not want the resources “to be a curse, but a blessing for the country,” according to the Minister.

Environmental and community care has to be fully integrated into the activities of any companies applying for licenses. The previous bidding system of issuing licenses, which were previously awarded on a first-come-first-served basis, has been replaced with conditions where companies are required to have an environmental and social impact assessment. This way, the government’s vision of expanding the mining sector and it becoming the backbone of the economy will benefit everyone involved.