Mining Industry in Ethiopia

Landmines kill or mutilate 12,000 people each year in the world’s poorest continent. African governments agreed recently to a landmark initiative aimed at eliminating an estimated 40 million landmines from the continent.

Victims of Landmines

As a result of conflicts over the past 70 years, Ethiopia is among the 10 most mine-affected countries in the world. Landmines and unexploded ordnance (UXO) primarily affect border regions with Eritrea, Somalia and Sudan, but there are also mines and UXO in the interior.

A nationwide landmine impact survey (LIS) completed in March of 2004 revealed that mine and UXO incidents killed 588 people and injured 737 persons between 2002 and 2004. The survey found a further 15,321 victims before 2002. Young adult males were the primary victims. Eighty-two percent of all victims were male and 40 percent of all victims were between the ages of 15 and 29. The next largest age group was children between the ages of 5 and 14 years. Most of the incidents among civilians occurred during herding or farming. Tampering with mines, a serious problem in other countries, accounted for 2 percent of the incidents in Ethiopia.

Following the most recent conflict with Eritrea, the government of Ethiopia instituted a national mine-action program using its own resources and with financing provided through a World Bank loan. It also turned to the United Nations Development Programme (UNDP), UNICEF, and other partners – including the international donor community – for technical assistance and capacity building. The Ethiopian Mine Action Office (EMAO) is the national agency responsible for humanitarian mine clearance and mine-risk education.

The primary effort of mine-action activities has been in support of the Emergency Recovery Programme (ERP) in the Tigray and Afar regions, along the border with Eritrea. The operational capability of EMAO consists of four manual clearance companies and their affiliated mine-risk education community-liaison assets. In 2004, EMAO will increase this capability by contracting mine detection dogs, procuring mechanical clearance systems, and mobilizing additional manual clearance companies and rapid response teams through the World Bank-financed ERP.

Based on LIS data collection, EMAO plans to develop a national mine-action strategy to address the socio-economic impact on mine-affected communities. In order to achieve this, there is a need to mobilize additional resources to reduce the mine/UXO risk in the high-risk areas of the country within a reasonable timeframe, and to develop a sustainable national capacity to deal with the mine/UXO problem in the longer-term.

Every year, the UN Mine Action Service, UNICEF and the UN Development Program produce a “Portfolio of Mine Action Projects,” which lists mine-action efforts proposed by UN agencies and nongovernmental organizations for the coming year. The total value of the 2004 Ethiopia original appeal was $ 8,205,504.


About the Mining Industry in Ethiopia

Conflict between Ethiopia and Eritrea continues and this has a negative effect on foreign investment in these two countries.

Ethiopia’s minerals sector contributes less than 1% to the country’s GDP. Ethiopia’s main mineral export is gold. The state-owned Ethiopian Mineral Resources Development Corporation (EMRDC) is involved with the development and production of mineral resources.

Even though modern mining in Ethiopia is recent, gold has traditionally been mined from alluvial and, to a lesser extent, primary free gold since ancient times. Modern gold mining methods have only been used since the 1930’s in the Bedakesa Valley of the Adola area in Southern Ethiopia. Later exploration has resulted in the discovery of the Lega Dembi deposit and other minerals.

Current mining activities also include the production of tantalite (50 t/year) and soda ash (20,000 t/year). The only formal tantalum mining operation is the Kenticha Mine, operated by Ethiopian Mines Development Share Company. Mining of kaolin, dimension stones (limestone, marble and granite) and small scale and artisanal mining of precious metals, gemstone, salt, industrial minerals and construction materials are the main mining activities in Ethiopia. Ethiopia has located some coal reserves in three separate areas in Ethiopia estimated at containing 61 Mt of coal (all lignite). Additional reserves have apparently been located in the Western part of the country.

Legal Framework

The Mining Proclamation 52/1993, Mining Income Tax Proclamation 53/1993, Mining Operations Regulation 182/1994, Proclamation 22/1996, Proclamation 23/1996, and the Investment Proclamation of June 1996 form the legal basis for mining in Ethiopia.

The Ethiopian government retains title to all land and mining operations, subject to national and governmental approval. The Government has the right to acquire a 2% interest in mining ventures as well as a 35% income tax levy on all mining operations. Mining royalties include 5% on precious metals and 3% on other minerals.

Gold Mining

Ethiopia has a single gold mine, Lega Dembi which was privatised and awarded to local a company Midroc Ethiopia for $175 million. A mining license was awarded and a new company – Midroc Legadembi Gold Mine Share Company (Minroc Gold) commenced production in August 1998. Production in 2001 totalled 3.4 t. Gold production from Lega Dembi realised about US$34 million in foreign currency for the finance year 2001-02.

The number of foreign exploration companies active in Ethiopia continues to decline, with few still active in Ethiopia, mainly exploring for gold and base metals. The geological survey is remaining active in undertaking regional mapping and geophysical surveys over parts of Ethiopia. Surveys have been completed over the promising Bure and Abergele gold and base metal prospects. In 2002 the Ministry of Mines reported that gold smuggling is costing about US$21 million annually in lost revenue. Between 10% and 20% of total gold production is used in the making of traditional ornaments.

Tantalum, Niobium and Rare Earth Element Mining

Ethiopia reportedly earns an average of US$5.6 million annually from tantalum exports. A hard rock mine, the Kenticha, is located in this country.

Ethiopian Mines Development Share Company produced 47 tons of tantalum during 2001. The company extracts tantalum ore at Kenchicha in the Borena zone of Oromia State and exports to the European Union, the United States and Japan.

Chemical & Fertilizer Mineral Mining

There has been an increase in investments in non-metallic minerals such as salt, mineral water and dimension stone within Ethiopia. The Ministry of Mines and Energy has issued four licences for salt production at Lake Afdera in Afar Regional State, in northeast Ethiopia. One of the licensees, Afar Salt Production-sharing Co. has committed Bi60 million to produce salt from the brine of Lake Afdera. The company intends to produce 500,000 t/y of edible salt initially, building eventually to 3.0 Mt/y, when the total investment could approach Bi100 million. Another company, Afdera plc plans to produce 100,000 t/y. Similarly, two other companies, Ertale plc and Bashanfer Trading plc are also licensed to engage in salt production in the area. The government hopes that within the next few years the country will be able to produce enough salt to satisfy local demand and to export the surplus. Phosphate exploration by the Geological Survey has been under way in Ethiopia for some years and has recently been finalised. Previous studies in the Bikilal area in western Ethiopia have indicated that there is a mineable reserve of 182 Mt of ore at an average grade of 3.5% P2O5, and prefeasibility and additional studies show that the ore is technically mineable. There is another phosphate exploration project at Melka Arba in southeastern Ethiopia where detailed geological mapping has been conducted over an area of 5.6 km2.

Source: MBendi

About Ethiopia

Capital: Addis Ababa
Population: 72,030,000 (2004)
Area: 1,251,282 kmĀ²
Currency: 1 Ethiopian birr
Language: Amharic


Ethiopia is an independent republic which lies in the north-east corner of Africa and forms part of the North East African Region. The capital city is Addis Ababa, headquarters of the Organisation of African Unity (OAU). Other major towns are Dire Dawa and Harar.

Ethiopi Map
Ethiopi Map

Since the secession of Eritrea in 1993, Ethiopia has been a landlocked state. The official language is Amharic but English, Arabic and Italian are used in commerce. The local currency is the Ethiopian birr. (US$ / Birr – current exchange rate).

The international time zone for Ethiopia is GMT +3 and the international dialling code is +251. There are international airports at Addis Ababa and Dire Diwa and the principal airlines which service these airports are Ethiopian Airlines and several international air carriers. As at January 1996 nationals of most countries require visas in order to visit Ethiopia.

Malaria, tuberculosis, hepatitis A, meningitis, typhoid fever, yellow fever (regional) and schistosomiasis may be contracted while travelling in Ethiopia. The risk of contraction is based on a number of factors including location, individual’s state of health, current immunisation status, and the local disease situation. All visitors require vaccination certificates against yellow fever.


The Ethiopian economy has grown stronger as the transition from a command to a market-based economy takes place. The former system of price controls has almost been discarded, the tax rates have decreased, and several private sector restrictions have been removed. This progress is, however, at risk if conflict with Eritrea prevails.

Progress has been made on the implementation of reforms. Valued Added Tax was introduced in the country in January 2003 and the import tariff regime has been reformed. The government is embarking on measures to increase the tax base and revenues gained from it. The financial sector is also improving, with flexible interest and exchange rates that are market-determined. The emphasis on national spending is being redirected from the defense sector to social sectors such as health, sanitation, education and poverty reduction.

The Ethiopian oil industry is a key sector in the economy of the country. Its full upstream potential has yet to be assessed. It has substantial energy resources with development potential. Natural gas and associated liquid reserves have been proven in the Calub area in commercially viable quantities.

Mining industry in Ethiopia (Reuters/Radu Sigheti)
Ethiopian children, victims of landmines hold a banner against the production of landmines in a school near Zalambesa, north east Ethiopia November 26, 2004.

The downstream oil industry accounts for a small amount of the country’s imports. The mining industry in Ethiopia is also a significant sector with development potential. Electricity is provided by the parastatal utility, Ethiopian Electric Light and Power Authority (EELPA).

Ethiopia belongs to the COMESA agreement. Member countries enjoy preferential trade terms. Ethiopia has similar agreements with a number of countries and the EU.

The country suffered a terrible drought in 2002 resulting in a sharp drop in cereal production and significant increases in food prices. The effects on the economy were severe and the country had to rely on food aid from international donors. The current levels of agricultural production are almost back to normal and food levels are satisfactory.

International Trade

Ethiopia’s main export commodities include cocoa beans and products, cut flowers, fruit, gold, gum incense, oil products, petroleum products and tea and coffee. Major import commodities include chemical products, consumer goods, food ingredients, edible oils and petroleum products.

All transactions in foreign exchange must be carried out through authorised dealers under the control of the National Bank. Payments abroad for imports require exchange licences, obtainable upon presentation of a valid importer’s licence, exchange licences are also granted in any convertible currency requested. All imports require a licence. There are no free trade zones in Ethiopia.

Ethiopia is a contracting party to the Harmonised Commodity Description and Coding System of tariff classification.

Source: MBendi