Note on Mining opportunities in Ethiopia
Ethiopia is endowed with rich mineral resources and offers excellent opportunities for mineral prospecting and development. Geological studies have identified a favorable geological environment hosting a wide variety of mineral resources. According to the Ministry of Mines and Energy, Ethiopia’s green stone belts contain substantial gold deposits and more than 500 metric tons of gold deposits have already been identified by Government exploration efforts. Additional reserves are expected to be identified in at least seven regions of the country. In addition to gold, there are good deposits of tantalum, platinum, nickel, potash and soda ash. Among construction and industrial minerals are marble, granite, limestone, clay, gypsum, gemstone, iron ore, coal, copper, silica, diatomite, etc. Geothermal energy also exists in good quantity. With regard to fossil energy resources, there are significant opportunities for oil and natural gas in the four major sedimentary basins, namely the Ogaden, the Gambella, the Blue Nile and the Southern Rift Valley. Ethiopia has also located some coal reserves in three separate areas in Ethiopia estimated at containing 61 Mt. of coal (all ignite).
Despite these discoveries, mineral development remains limited, contributing only 1% to the national economy. Steps are being taken to improve the situation, including the creation of an environment conducive to private, local and foreign investment. While there is no restriction on private investors in developing any type of mineral resource, the greatest potential is in gold and rare metals, petroleum, precious and base metals, industrial minerals and dimension stones (marble and granite).
Prospecting, exploration and mining licenses have been issued to foreign mining companies from Canada, Italy, Saudi Arabia, China, Malaysia, the United States, etc.
A Saudi Company, Midroc Ethiopia, has acquired the only primary gold mine in the country for US$175 million in August 1998. Another private company M/S. Wel Wel Gold PLC acquired in 1998 a license area of 500 sq. kms in western Ethiopia for exploration of gold and associated minerals. In the Gambella region, only traditional gold miners are involved. Gold was the fifth-leading export commodity in 2005/06 with revenue of US$64.7 million.
A Malaysian company M/S. Petronas is exploring for oil in western Gambella in Ethiopia near the border with Sudan. A petroleum development and production sharing agreement was signed with the Government of Ethiopia in 2004 to prospect crude oil in 15,000 sq. kms. area. It was understood that Petronas has allocated US$5 million for oil exploration for the next three years. Petronas has also commissioned a Chinese firm to conduct geophysical seismic surveys. In August 2005, the company acquired additional exploration areas in Genale, Warder and Kelafo localities in the Ogaden basin. In addition to these, the Ethiopian Government has granted Petronas for exploration rights in the Calub and Hilal gas fields development. The company has a plan to build a gas refinery plant at Calub and to construct a gas pipeline all the way to Djibouti that would eable it to export petroleum products. Petronas proposed to invest up to US$1.9 billion. The company also plans to drill exploration wells in the vicinity of Calub and Hilal.
The National Oil Corporation (NMC) owned by the Saudi billionaire of Ethiopian origin, Mr. Mohammed Al-Amoudi, and his conglomerate MIDROC has been awarded an exploration license in 2004 in the Awash basin of the Afar State in the Easter part. NMC has appointed Sintom Consultants, a Russian firm, to undertake seismic surveys.
National Mining Corporation, a company under the MIDROC Group, is engaged in coal exploration. There are three major coal resources in the western and south-west parts of the country. The resources are Delbi Coal (Lignite/B to sub-bituminous A type with sulphur below 0.5%), Moye Coal (Bituminous type with sulphur below 0.4%) and Yayu Coal (Mainly Lignite/B with medium sulphur content of 1-1.5%). A Chinese company is involved in the consultancy work. Iron ore deposits have been identified within 200-250 kms. of these coal resources, while limestone deposits are also available near these coal resources.
Ethiopia also produces 120mt of tantalum per year. In 2004, Chinese firms expressed interest in joint venture with the Government owned Ethiopian Mineral Development Company (EMDC) to expand production of Tantalum which is used in electronics industry. The tantalum that EMDC sells is mined in the Oromia State’s Borena Zone, 557km of south of Addis Ababa at a place called Kenticha, Adola. Ethiopia obtained over US$4 million from export of tantalum during the last Ethiopian fiscal year (2005/06).
There are Potash deposits in Afar Regional State in northern Ethiopia. These deposits were explored by an American company in late 1950s and early 1960s, but the project was suspended following the military take-over in 1974.
The Ministry of Mines and Energy administered mineral resources development in Ethiopia. The Ethiopian Institute of Geological Surveys conducted mapping and mineral prospecting. The state-owned Ethiopian Mineral Development Corporation is involved in development and production of mineral resources.
The outlook for Ethiopia’s mineral industry is favorable. Ethiopia’s plans to expand infrastructure may increase the economic viability of its metals and industrial minerals deposits.
Oil and Gas:
Ethiopia imports 100% of its petroleum requirements, but has commercially viable gas reserves at Calub, in the remote south-east. With world oil prices remaining at a high level, the search for other oil and gas reserves in Ethiopia is intensifying.
(i) The Malaysian company, M/s Petronas, has started to explore oil in Gambella region in western Ethiopia near the Sudan border. In 2004, it signed a petroleum development and production sharing agreement with the Ministry of Mines to prospect crude oil in a 15,000 sq. km. area in Gambella. It has sub-contracted a Chinese company for geophysical seismic surveys and field work in 300 sq. km. area. The Ethiopian government has granted Petronas a one year exclusive right over an area of 350,000 sq. kms. in the Ogaden basin in southeast part of the country for preliminary joint study. According to the data compiled, it shows good prospects. In July 2005, Petronas signed another agreement with Ministry of Mines for exploration and production of petroleum around Kelafo, Welwel-Warder and Genale localities in Somali State.
The Malaysian oil firm Petronas has also won Ethiopia’s ambitious Calub and Hilala gas field development contract in August 2006. The gas fields were identified in the 1970’s and basic infrastructure was installed in the 1990s, but none of a string of development proposals has come to fruition, largely because of logistical difficulties in what is an isolated location with little connecting infrastructure. The final failure of the last development proposal, by SI-Tech international (SIL) in January 2006, led to the tendering and award of the new contract. Petronas plans to invest US$1.9 billion over six years to develop the two fields, which together are classified as “giant”. This will involve the construction of a gas-to-liquids plant and an export pipeline to the coast, at Djibouti. Petronas, Gail India Ltd. and Dinder of Sudan participated in the tender put up by the Ministry.
(ii) The National Oil Corporation (NMC) owned by the Saudi billionaire of Ethiopian origin Mr. Mohammed Al-Amoudi, and his conglomerate MIDROC, has been awarded an exploration license in 2004 in the Awash basin of the Afar State in the eastern part. NMC has appointed Sintom Consultants, a Russian firm, to undertake seismic surveys. It is understood that some American companies are also negotiating for oil prospecting in Tigray region in the northern part of Ethiopia.
(iii) White Nile (a UK-Sudanese group) signed an exploration agreement for a block in the South West in July 2005. As part of the exploration programme, ground geophysical surveys, including magneto-tellurics and gravity, have now been completed in the omo river area. Early results of the interpretation are encouraging and have revealed deep basins, potentially containing sedimentary section similar to that of the petroliferous Muglad and Melut Basins of Southern Sudan. The next stage in the development of the company’s Ethiopian project is to finalise the interpretation of the data collected, which will identifying the areas that White Nile wishes to translate into a PSA. Pexco (a private Malaysian firm) won an exploration in the south-east Ogaden basin (where Calub is situated) in October 2005, for an initial payment of US$1 million; and two other small firms – Afar Exploration and South West Energy – also won concessions in 2005.
(iv) It is understood from the Ministry of Mines that more blocs are available for oil and gas exploration in Ethiopia.
(v) In the past, Indian companies like Gas Authority India Ltd. (GAIL), Petroleum India International (PIL) and Assam Company Limited had also shown interest in this sector.
February 2008
List of Miners in Addis Ababa
1. Debreberhane Natural Spring Water PLC,
P.O. Box 100668, Addis Ababa, Ethiopia
Telephone No.00251-11-5152150/5152142
Fax No.00251-11-5156250
Mobile No.09111203572
E-mail:
Contact Person: Mr. Gebeyaw Takle, Managing Director
Mine : Natural Spring Water
Location: Debrebrhane, North Shoa Zone (Amhara Regional State), 130 km from the capital Addis Ababa
Area : 30 sq. km.
Capital: 30 million birr (US$3.5 million)
Production: 80,000 liters per day
The company started production of natural spring water under the brand name –Aqua Safe before six months. All the machineries imported from France and some accessories from India. Currently, they are supplying all their products to the local market.
Expansion Plan: They are planning to produce flavored water, tonic water and soft drinks, etc. In this connection, they have shown interest to form partnership with Indian companies for their future expansion plan
2. Afaka Miners PLC,
P.O. Box 5036, Addis Ababa, Ethiopia
Telephone No.00251-11-5537362
Mobile: 911431080/911211046
Fax No.00251-11-5536134
Contact Person: Mr. Abiy Tilahun
E-mail: atb_miners@yahoo.com
Mine : Opal
Location: North Shoa Zone (Amhara Regional State), 270 km from the capital Addis Ababa
Area : 20 sq. km.
Afaka Miners license two blocks of opal deposit in Ethiopia since 2003/04. They have finished the exploration part and will start production after three months. The company has shown interest to form partnership with the Indian companies in exploration process as well as by selling some of their share in the production stage.
3. Etno Mining Co. PLC,
P.O. Box 8918, Addis Ababa, Ethiopia
Telephone No.00251-11-5521505
Mobile: 0911235696
Fax No.00251-11-5521500
E-mail: geodev@ethionet.et
Contact Person: Dr. Abebaw Endashaw
Mine : Gold
Location: Akobo (Gambella Regional State), 750-800 km from the capital Addis Ababa
Area : 20 sq. km.
The company is one of those explorer and producer of primary gold and placer gold. They export placer gold to England. They have shown interest in partnership with the Indian companies for exploration of primary gold.
4. Jam PLC,
P.O. Box 12783, Addis Ababa, Ethiopia
Telephone No.00251-11-6627200/615222
Fax No.00251-11-6615407
E-mail: homa@ethionet.et
Contact Person: Haji Muktare
Mine : Gemstone, Coal & Metal
Location: Bale (Oromia Regional State) and Gondar (Amhara Regional State, Wollega (Oromia Regional State)
Area : 20 sq. km.
The company has not started the exploration process and needs partners from India. In addition they have a big stone crusher in Addis Ababa.
5. Kaleb Instruments PLC,
P.O. Box 1006 code 1110, Addis Ababa, Ethiopia
Telephone No.00251-11-6635169
Mobile No.0911244918
Fax No.00251-11-6631731
E-mail: addisess@ethionet.et
Contact Person: Dr. Addis Alem Zeleke
Mine : Gem Stone/Opal
Location: North Shoa (Amhara Regional State)
Area : 40 sq. km.
The company started exploration of opal in15 sq. km. area and asked for partners from India for their detailed exploration and others.
6. Romso Minerals PLC,
P.O. Box 23115 Code 1000, Addis Ababa, Ethiopia
Telephone No.00251-11-5152852
Mobile No.0911605436
Fax No.00251-11-6602969
E-mail: romso@ethionet.et
Contact Person: Mr. Tewodros
Mine : Industrial Minerals and Gemstones
Location: Moyale (The South Ethiopian Nations, Nationalities and Peoples Regional State)
Area : 2000 sq. km.
The company started production of Olivin and they have shown interest to tie up with the Indian companies.
7. Western Welega Gold Exploration and
Development PLC,
P.O. Box 419, Addis Ababa, Ethiopia
Telephone No.00251-11-4654892
Mobile 0911207510/0911211526
Fax No.00251-11-4653549
E-mail: roof@ethionet.et
Contact Person: Dr. Wubishet G/Tsadik
I)
Mine : Gold and Associated minerals
Location: Mendi, Western Welega (Oromia Regional State)
Area : 100sq.km.
II)
Mine : Platinium – Group minerals
Location: Benshangul Gumuz Regional State
Area : 2000 sq. km.
The company finished sub surface/surface exploration and started detail exploration in 10 sq km for the gold and associated minerals. They also found iron deposit and base metals in the same area. Regarding the Platinum, they have completed exploration and would like to tie up with strong partnership from India.
8. Yubdo Platinum & Gold Development PLC,
P.O. Box 57100, Addis Ababa, Ethiopia
Telephone No.00251-91-1217683
Fax No.00251-11-552699
Contact Person: Mr. Benti Tassisa
Mine : Platinium –
Location: Wolega, Amhara Regional State
Area : 27.3 sq. km.
The company has started production and export to England. They asked for strong partnership from India for their expansion work.