Ethiopia: Ministry Suspends Issuing Exploration Licenses in Mineral Rich Areas

By Kaleyesus Bekele

The Ministry of Mines announced that it has stopped issuing mineral exploration licenses in the South Western part of the country, a region known for different mineral deposits.

In a public notice issued last week, the Ministry of Mines, Mineral Licensing and Administration Directorate, announced that it has suspended issuing mineral exploration licenses in South West part of the country as this area is reserved for a joint geological study being undertaken by the Ethiopian and Chinese geological survey institutes. The directorate revealed that it will not accept applications from companies requesting exploration areas in this part of the country for unspecific period of time.

Local and foreign mining companies expressed their discontent over the large concession held by the Chinese and Ethiopian geological survey institutes for the joint geological study.

Based on a bilateral agreement signed by the governments of China and Ethiopia the Ethiopian and China geological survey institutes are undertaking a joint geological study in the South Western part of Ethiopia since 2012. The South Western part of Ethiopia is known for different mineral resources including gold. The concession includes tens of thousands of sqkm of land in South Western parts of Ethiopia. The geological surveys are trying to identify the mineral resources of the concession area. Chinese and Ethiopian geologists are jointly working to learn about the types of the existing minerals. The cost of the exploration project is covered by the Chinese government. However, Ethiopian and foreign mining companies are not happy about this project. They are wary of the Chinese move saying that this gives comparative advantage for Chinese mining firms.

The Ministry of Mines, Public Relations and Communication Directorate director, Bacha Fuji, told The Reporter that the Ethiopian and Chinese geological survey institutes are assessing the mineral potential of the area for the past two years. “They are collecting useful geological data. They are adding value to the concession. Hence, the Mineral Licensing and Administration Directorate will not process exploration license applications until the joint study is finalized,” Bacha said. However, he said the Ministry will avail the crucial geological data for all local and foreign mining firms once the joint study is finalized.

“Apart from the concession area held by the joint study other concessions are open for interested local and foreign investors,” Bacha said.

The Ministry of Mines recently introduced a stringent mineral exploration licensing procedures. It has also evaluated the performance of companies engaged in mineral exploration activities and revoked 56 companies licenses who failed to execute exploration work according to their commitments.