1 5 reasons Ethiopia is the mining investment destination you’ve been looking for If you’re looking for a mining destination with the right mix of mineral potential, stability, infrastructure development and government support for investors – consider Ethiopia. This country case study outlines 5 reasons why you need to take another look at one of Africa’s best performing economies. Ethiopia’s High Economic Growth Extraordinary Mineral Potential Modern Geodata to Support Exploration A Stable Legal Framework Major Investments in Infrastructure and Accessibility MINISTRY OF MINES, PETROLEUM AND NATURAL GAS
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5 reasons Ethiopia is the mining investment destination you’ve been looking forIf you’re looking for a mining destination with the right mix of mineral potential, stability, infrastructure development and government support for investors – consider Ethiopia. This country case study outlines 5 reasons why you need to take another look at one of Africa’s best performing economies.
� Ethiopia’s High Economic Growth� Extraordinary Mineral Potential � Modern Geodata to Support Exploration� A Stable Legal Framework� Major Investments in Infrastructure and Accessibility
MINISTRY OF MINES, PETROLEUM AND NATURAL GAS
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Ethiopia’s virtually untapped, diverse
and vast mineral resources offer huge
potential opportunities for exploration
and development. These include - but
are not limited to - tantalum, potash,
gemstones, gold, iron ore and various
industrial, energy and construction
minerals. This extraordinary potential
coupled with improving government
policies and regulations means Ethiopia
is now very much on the radar screen of
international mining investors.
Ethiopia has seen astonishing growth in the
last ten years. Growing at an average rate of
10.2% between 2006 and 2016, the country
is consistently one of Africa’s top performing
economies. The country’s Growth and
Transformation Plan II is targeting an annual
average real GDP growth rate of 11%. Ethiopian
industry is projected to grow at an annual
average rate of 20%, with projected growth
of 21.9% in the manufacturing sub-sector;
31.6% in electricity, gas and water; 15.4% in
construction; and 32.8% in the mining sector.
WELCOME TO THE LAND OF OPPORTURNITY
Ethiopia’s record growth
Reason 1:
You may have heard about Ethiopia’s
GTP. But what is it exactly? Ethiopia aims to achieve middle income status by 2025 by gradually transitioning from an agricultural to an industrial led economy. This will be achieved by
the implementation of the Growth and
Transformation Plan (GTP) II.
Currently, agriculture is the primary
driver of economic growth, accounting
for 46% of total Gross Domestic
Product (GDP), 80% of employment
and 85% of export revenues in Ethiopia.
Transformation to an industrial
economy requires strategic and
systemic linkages with all sectors of
the economy. The extractives sector
is well positioned to be a driver of this
transformation. Aided by the Ministry
of Mining Petroleum and Natural Gas’s
25-year Mineral Sector Development
Plan, the mining sector aims to
increase its contribution to GDP from
2% at present to 10% by 2025.
WHAT IS ETHIOPIA’S GROWTH AND TRANSFORMATION PLAN (GTP) II?
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Source: World Bank
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Ethiopia WorldSub Saharan Africa
GDP GROWTH RATE (%)
Ministry of Mines, Petroleum and Natural Gas
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Did you know that Ethiopia has a mining pedigree dating
back more than a millennium? Despite this long history,
today commercial mining is still in its early stages, providing
ample opportunity for those wishing to invest in its mining
sector – like you.
Extraordinary mineral potential
Reason 2:
Spotlight 1: Gold
Artisanal miners have mined gold in Ethiopia for thousands of years, and gold deposits are widespread across the country. Southern Ethiopia’s greenbelt already hosts two gold mines, with MIDROC Ethiopia mining at Lega Dembi, and production having started at Sakaro in the Oromia region. MIDROC has also been granted a large-scale gold mining licence and is under development at Metekel in the Benishangul Gumuz region.
Several local and international large-scale gold mining companies have been granted licences:� Newmont is undertaking gold exploration in northern Ethiopia� Ezana Mining is a local mining company which is operating in the northern part of the Tigray region; � KEFI Minerals (Ethiopia) Ltd is a British owned company with operations under development in the western part of the Oromia region; � Tigray Resources has applied for a large scale gold and silver mining licence in Tigray, in the north of Ethiopia� Ascom Mining Ethiopia has been prospecting for gold and base metals since
2014 and it has discovered a gold ore reserve in the Benishangul region. The company is currently undertaking feasibility studies of gold prospects in the western part of the country.
Spotlight 3: Tantalum
Spotlight 2: potash
Ethiopia is already the sixth biggest producer
of tantalum in the world. The Kenticha tantalite
mine in the Oromia region, in the southern part of
Ethiopia, is estimated to contain sufficient deposits
to produce as much as 9,000 tons of processed
tantalum products over the next 15 years, and
beyond. The mine also contains quartz and feldspar.
Of all of Ethiopia’s mineral
potential, potash has garnered
some of the greatest interest.
95% of world’s potash is
mined for use in fertilizers,
while the rest is used for feed
supplements and industrial
production. The presence of
evaporite minerals in the Danakil
Depression, and particularly
the Great Salt Plane of Dallol in
northern Ethiopia has meant
various exploration efforts
have been undertaken in the
past. These have confirmed the
presence of two ore bodies at
Dallol - the Crescent ore body
and the Musley ore body, both
of which represent excellent
opportunities for investors.
Ministry of Mines, Petroleum and Natural Gas
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Mineral potential of Ethiopia: Metallic Minerals
Mineral potential of Ethiopia: INDUSTRIAL Minerals
Spotlight 4: Industrial Minerals
A wide array of industrial minerals are already being mined very successfully in Ethiopia. Here is a glance at a few of these:
� Soda ash is being mined at Lake Abiyata, in the rift valley about 200 kilometers southof the capital. The reserve at Lake Abiyata and the surrounding lakes exceeds 460 million tons of sodium carbonate at salt concentration ranging from 1.1% to 1.9%. The plant is producing about 5,000 tons of soda ash per year on a semi-industrial scale. The consumers of soda ash are local caustic soda factories and soap and detergent manufacturers.
� Kaolin, quartz and feldspar are being mined from the Adola belt in southern Ethiopia by a state-owned enterprise. � Silica sand is also being produced and used by local industries. The cement factories of
the country are using high quality limestone, clay, gypsum and pumice as raw materials for production.
� Large quantities of locally mined construction minerals such as sand, gravel, scoria,crushed stones, aggregates, scoria are used by the construction industry for buildings, roads, dams and bridges. Decorative and construction materials are also produced by foreign and local mining companies in the southern, western, central and northern parts of the Ethiopia.
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ADDIS ABABA
DESSIE
GONDER
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MEKELE
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DEBRE TABOR WOLDIA
ASELA
BAHAR DAR
ARBA MINCH
AWASAGOBA
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SUDAN
KENYA
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UGANDA
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Geology: Modified from: Milesi J.P.; Feybesse J.L.; Pinna P.;Deschamps Y.; Kampunzu H.; Muhongo S.; Lescuyer J.L.; Le Goff E.; Delor C.; Billa M.; Ralay F.; Heinry C. Géologie et principauxgisements d'Afrique - Carte et SIG à 1:10.000.000. 20ème Colloque de Géologie Africaine, Orléans - France, 02 juin - 07 juin 2004.Mineral Occurrences derived from:Tibebu M., & Haile Michael F., Industrial Minerals and Rocks Resource Potential of Ethiopia.Geological Survey of Ethiopia. March 2003.Edited by Mitchell Clive, & Morgan David, 2007.Map Design by Linley Kathrine.
Projection
Datum
GCS_AdindanD_Adindan
Mineral Occurrence LegendMetamorphic
Talc
Kyanite
Garnet, staurolite
Calcitic Marble
Graphite
Dolomitic Marble
Asbestos
Igneous
Sulphur
Pumice
Beryl
Mica
Feldspar, Quartz & Vein Quartz
Quartz
Feldspar
Olivine
Titanium
Phosphate
Dimension Stone (Granite)
Sediments
Limestone
Travertine
Phosphate
Kaolin
Bentonite
Brick & Tile Clay
Ceramic Clay
Gypsum
Barytes
Potash
Soda Ash
Rock Salt
Diatomite
Silica Sand & Sandstone
Titanium mineral sands
0 50 100 150 20025Kilometers
Industrial Mineral Occurrence Map of EthiopiaScale 1:2 000 000
Site Number12345678910111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758596061626364656667686970717273747576777879808182838485
Site Number8687888990919293949596979899100101102103104105106107108109110111112113114115116117118119120121122123124125126127128129130131132133134135136137138139140141142143144145146147148149150151152153154155156157158159160161162163164165166167168169170
Exploration is so much easier with solid geodata. Although
regional maps at the scale of 1:250,000 have been
produced in Ethiopia since the early-mid 1970s, in 2017 a
major milestone was reached when 100% coverage of the
country’s land-mass at a scale of 1:250,000 was achieved by
the Geological Survey of Ethiopia (GSE).
100%coverage of the country’s land-mass at a scale of 1:250,000 was achieved by the Geological Survey of Ethiopia (GSE) in 2017.
As part of the government’s firm
commitment to encourage exploration
activity, and as part of the GTP II, further
activity will be significantly ramped up in the
coming years. The following targets have
already been set:
� Airborne geophysics surveys will be
increased from the current 30% to 100%
by the end of the plan period
� Geo-hazard study coverage (at a scale of
1:250,000) will increase from the current
42% to 100% by the end of the plan period
� 1:100,000 geoscience mapping will also
commence
� National Geochemical Mapping at
1:1,000,000 scale as well as a global
geochemical baseline have been initiated
recently to cover the entire landmass of
the country within a five year period.
The Ethiopian Government understands
that stability and predictability are key for
your investment. The Government therefore
aspires to deliver a regulatory regime that is
both transparent and predictable.
Attracting mining investment is a priority.
That’s why both foreign and local mining
companies are encouraged to carry out
exploration, development, and production
according to their own plans and market
conditions. It’s also why holders of exploration
and mining licenses and their contractors are
exempt from import duties for all equipment,
machinery and vehicles that are used for the
purpose of mining operations.
The holder of small or large-scale mining
licenses may import – free of custom duties
– the consumables they require during the
development period in order to begin and
sustain commercial production for the first
three months.
The mining law also guarantees the opening
and operation of a foreign currency account in
Ethiopia, and retention of a portion of foreign
currency earnings and remittance of profits,
dividends and interest out of Ethiopia.
Modern geodata to support exploration
a stable legal framework
Reason 3:
Reason 4:
The Ethiopian Ministry of Mines,
Petroleum and Natural Gas (MoMPNG)
together with its development partners
is envisioning legal and institutional
reforms of the mining sector. By
overhauling the sector’s management,
the country seeks to attract investment.
To realise this vision, a Codification
Task Force has been established
within the Ministry, together with the
Canadian International Resources and Development Institute’s (CIRDI) Support to the Ministry of Mining (SUMM) project,
with the aim of improving the existing
legal, administrative and regulatory
frameworks. Together, these efforts will
strengthen the mineral licensing and
administration of the MoMPNG, as well as
the regional mining bureaus.
A modern and high quality Mining
Cadastre is also key to attracting
investment. The MoMPNG is working
continuously to strengthen its mineral
licensing and registry system to
ensure transparency, accountability
and efficiency. It is also working to
ensure the system is backed by high
quality geosciences data that is publicly
accessible. The five-year SUMM Project
is focussed on strengthening the mining
cadastre and registry system, and
addressing geo-data gaps.
WORKING IN PARTNERSHIP FOR REFORMS AND INVESTMENT
Ministry of Mines, Petroleum and Natural Gas
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Larger maps are available on request
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� ROYALTIES: In order to attract more
investment to the sector, the royalty
payable by holders of large scale mining
licenses for precious minerals has been
reduced to 7%. Royalties in Ethiopia are
calculated on an ad valorem basis, and are
collected at two levels – for large scale
mining licenses by the federal state and for
small scale mining licenses by the regional
mining bureaus where the mining operation
is located.
� OWNERSHIP: In line with the Constitution
and the country’s Mining Proclamation,
mineral resources remain the property of
the people of Ethiopia. The Government of
Ethiopia is therefore the official custodian
of the mineral resources, with a duty to
make use of them for the benefit and
development of all Ethiopians.
� ENVIRONMENTAL IMPACT: We care about
our environment, which is why licence
applicants are required to submit and
obtain approval via an Environmental
Impact Assessment (EIA) report from the
respective Authority before applying for an
exploration and mining license.
Ethiopia is fully committed to sector transparency. The Government applied for Extractive Industries Transparency Initiative (EITI) candidacy in October 2013, which was granted in March 2014.
The EITI candidacy will be pursued
rigorously to improve the foreign
investment profile for the country
as well as encourage domestic
accountability. An Ethiopian Extractive
Industries Transparency Initiative
Proclamation has been drafted and is
going through a consultation process
with different stakeholders. Greater
transparency in the extractive industry
has gained political momentum in
recent years, and efforts to showcase
Ethiopia’s commitments to such an
initiative will be welcomed by investors
and civil society organizations. Full
disclosure of resource revenues allows
for the development of a transparent
mining sector from the very start. Such
information will also be of use to local
communities who can determine the
extent of the benefits they receive in
relation to the mining operations in the
regions where they live.
TRANSPARENCY IN ETHIOPIA’S MINERAL SECTOR
In a nutshell: what you need to know about the legal framework
Ministry of Mines, Petroleum and Natural Gas
Enabling infrastructure is critical for mining investment. It is
also vital in driving Ethiopia’s transformation into an industrial
economy in the coming years. The Government of Ethiopia is
therefore investing extensively in infrastructure, including:
The GTP is aiming to increase generation capacity to 17,000MW by 2020 and then to 35,000MW by 2037. The country is already well on track to achieving this target. It is also a source of pride that Ethiopia’s new generation capacity will be predominantly from renewable energy sources such as hydro, solar and wind.
Between 2010 and 2015, Ethiopia’s road network has more than doubled to reach 110 414km.
Ethiopia has been investing heavily in rail construction for both passenger and cargo transportation. In 2018, a 656 km long railway connecting Ethiopia to Djibouti’s port was commissioned and in 2015, the Addis Ababa Light Rail was opened.
Ethiopian Airways is now Africa’s largest carrier, making Addis Ababa a major hub for the transport of goods and people. The airline has excellent links all over the world, and especially in Africa.
Major investments in infrastructure and accessibility
Reason 5:
ENERGY ROADS RAILWAYS AIR
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MINISTRY OF MINES, PETROLEUM AND NATURAL GAS OF ETHIOPIAP O Box 486
