The Ministry of Mining (MoM) rejected Kefi Gold’s request for an extension of the deadline to launch project development and production of the gold deposit discovered in Tulu Kapi locality of Western Wollega zone, Oromia regional state.
The UK mining firm, Kefi Gold and Copper, through its locally registered firm, Tulu Kapi Gold Mines Share Company, wrote a letter on September 13, 2021 to the Ministry notifying that the launch of the project development could not be met on the agreed deadline of October 31, 2021 due to growing security concerns in the project area.
In the letter, the company indicated that security concerns in the Tulu Kapi mining area, which is located in West Wollega Zone of Oromia, have obstructed it from launching the project development according to the agreed timetable.
The company also published an open disclosure on its website on September 29, 2021 explaining its concerns regarding the security situation in the project area of Tulu Kapi.
“During preparations for the expected October 2021 launch of the development phase of the Company’s Tulu Kapi Gold project, security concerns have arisen. Consequently, KEFI and the Project company, Tulu Kapi Gold Mines Share Company, have elected to temporarily pause the launch to ensure that these matters have been satisfactorily addressed,” the company said.
The Mining Ministry, however, rejected Kefi Gold’s request for an extension to the deadline set for the launch of the project development phase.
In a letter it issued on October 11, 2021, the Ministry disregarded the company’s justifications for its failure to commence the development phase and request for extension of time.
The letter signed by the Mining Minister, Takele Uma, cited the company’s previous letter sent to the Ministry in July acknowledging improvements of the security situation and its readiness to launch the project development within the agreed deadline.
According to the Ministry’s letter, the principal basis of the permission to extend the previous period until October 31, 2021 was not the security situation. Rather the company’s limitations in acquiring the project financing were the main reason that led the Ministry to extend the deadline until the end of October.
“Your recent invocation of security for the potential failure to meet the agreed 31 October 2021 deadline, pre-textual in nature as it would appear, is thus entirely unacceptable to the ministry,” stated Takele’s letter of denial of request sent to the company on October 11, 2021.
The letter also explained the government’s commitment and capacity to improve the security situation by taking strict and comprehensive security measures to prevent the disruption of any economic activities in the area.
“In view of the numerous previous accommodations that the ministry has offered to the company’s repeated breaches of promise and chronic under performance, the ministry has decided that a further extension of time would be unwarranted,” said the Ministry rejecting the request for an extension of time.
In a short response sent to The Reporter’s query, Takele said: “There is no security problem in Tulu Kapi.”
“A law enforcement division from the Federal police has been deployed in the mining area some three years ago and they are still there on the site. They want to rubbish the letter we sent them, but we will stick to our principles,” he affirmed.
Officials at Tulu Kapi Gold Mining Share Company were not available to comment on the Ministry’s latest decision.
On its official website, KEFI Gold and Copper, however, announced its optimism to launch the Ethiopian project before the end of 2021, with the start-up production in 2023.
Kefi Gold received its mining license in 2015 to develop the gold deposit discovered in West Wellega Zone, Tulu Kapi woreda.
The Gold Ore Reserve in Tulu Kapi is estimated to be 1.05 million ounces with mineral resources totaling 1.72 million ounces of gold.