Sunday, May 26, 2024
BusinessCouncil approves four large-scale gold mining licenses

Council approves four large-scale gold mining licenses

Endorses bromine extraction license for the first time

The Council of Ministers (CoM) ratified seven large-scale mining licenses, of which, four licenses will be granted to companies that have requested to extract the Gold reserve discovered in Gambella and Benshangul Gumuz regional states of the country.

The Council ratified the mining licenses after evaluating the proposal submitted to it by the Ministry of Mining and Petroleum (MoMP), which is headed by the former Addis Ababa Mayor, Takele Uma.

The Council reviewed the assessment made by the expert committee established by the Ministry, which deals with the feasibility of the investments, their importance to the country’s economic growth and the initial capital of the companies as well as their credibility and the agreements reached between the Ministry and the companies, the Office of the Prime Minister stated in a statement issued on Thursday, September 23, 2021. 

Kurmuk Gold Mining Plc is one of the four companies getting the large-scale gold production license by the CoM.

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According to information obtained from the MoMP, Kurmuk Gold has been conducting gold exploration for the last few years and applied for a production license after acquiring a valuable gold deposit in Kurmuk Woreda – located in Asosa Zone of Benishangul-Gumuz National Regional State.

Shareholders from Ethiopia, Australia, Canada and USA founded the company, which is registered in British Virgin Islands.

The company’s initial investment capital is USD 391 million, which is the largest capital of the three companies allowed to get the large-scale gold mining licenses. 

The large-scale gold production license permitted to the company will stay valid for 20 years and production will be fully operational within the coming two years. 

According to a document reviewed by The Reporter, the company plans to produce a total of 62,262.656 kg of gold over the first 10 years, with the total value of this commodity estimated to be 158,477,916,600 birr. In the process of doing so, the project will create more than 740 permanent jobs for Ethiopians.

Zumbara Investment Plc is the other company that acquired a gold mining license. It has an initial investment capital of 129.5 million birr. Zumbara is a company registered in Ethiopia and founded by Ethiopian investors to extract the gold reserve found in Asosa Zone, Benishangul Gumuz Region, Odabigilidu Woreda.

The company was granted eight years, and will become fully operational within a year and half.

Over the next ten years, it plans to produce a total of 744.84 kg of gold, which in the current value of the commodity is estimated to generate total revenue of 1,895,859,725 birr.

The third company that acquired a license is Etno Mining Plc, which has been operating in the past with a mining license. The company applied for a production license after it found a valuable gold reserve in Dima Woreda, Anuak Zone of Gambella National Regional State.

Etno is owned by Norwegian investors and is registered in Ethiopia with an initial investment capital of USD 9.5 million. The large-scale mining license will be valid for only one year and the company is expected to start gold production within 60 days.

The fourth company allowed to acquire a license is Oromia Mining SC, which is registered in Ethiopia and is owned by Ethiopian investors. This company was granted license to extract the gold reserve it found in the Oromia regional state, Guji Zone, Anna Sora Woreda.

The initial investment capital of the company is 146,798,184 birr and the license will be valid for six years. It is expected to produce 505.4 kg of gold during the period of the license. 

Currently, there are three companies engaged in large-scale gold mining licenses, namely MIDROC Gold, KEFI Minerals and Ezana Mining. However, it is only MIDROC Gold that is currently engaged in gold production and it generates average annual revenue of USD 300 million.

The other large-scale mining license is granted to a company called ALGHAITH ALQUBAISI, which will be the first company in Ethiopia with a large-scale mining license to extract the bromine mine reserve located in Afar regional state. 

The company, registered in the UAE with an initial investment capital of USD 39.3 million, has applied for a license to produce bromine and chlorine, which are mainly used to produce caustic soda and other minerals such as hydrochloric acid and sodium hypochlorite.

With a license period of 20 years, the company plans to produce 194,000,000 tons of bromine and 168,053,000 tons of chlorine during the first ten year period.

Furthermore, the CoM approved two large-scale marble production mining licenses requested by Kripto Mining and Chemicals Plc and Buhumi Mining Plc. Both companies are registered in Ethiopia but are owned by Indian investors.

The Office of the Prime Minister said in its statement that companies that will be granted with the large-scale mining licenses are obliged to adhere to the principles of high social corporate responsibilities and protect the environment in their respective license areas. 

According to the statement, all seven large-scale mining investments are expected to generate more than USD 4.7 billion in revenue to the government of Ethiopia within the first ten year period and will also create more than 1,300 jobs.

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