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BusinessMinistry, Yara ink mining agreement

Ministry, Yara ink mining agreement

The Ministry of Mines, Petroleum and Natural has granted a large scale mining license to the Norwegian mining firm, Yara Dallol BV. The licence enables the company to develop a potash mine in the Danakil region of the Afar Regional State.

The Council of Ministers endorsed the mining license on November 3. Accordingly, the Ministry of Mines, Petroleum and Natural Gas (MoMPNG) and Yara Dallol on Tuesday signed the mining agreement. The agreement was signed by Motuma Mekassa, minister of MoMPNG, and Svein Tore Holsether, president and CEO of Yara International, at the office of the president of Ethiopia, Mulatu Teshome (PhD).

Yara International is a giant Norwegian fertilizer producer that has been supplying fertilizer to Ethiopia. The signing of the mining agreement coincided with the Norwegian Royal Family visit to Ethiopia this week.

Motuma told The Reporter that Yara has undertaken a successful exploration work in its concession in the Dallol depression. He expressed his optimism that Yara would develop the potash mine as per the project schedule.

Svein Tore Holsether said that the potash mine would significantly contribute to the economic development of the country. “We are glad to achieve this key milestone in the Dallol mining project. A mine in the Afar region would contribute significantly to economic development locally and nationally. We recognize and appreciate the efforts made by the Ethiopian government in supporting the project, both by providing necessary infrastructure and through making the mining agreement possible,” Svein Tore Holsether said.

Yara Dallol is a mining project located in the Afar region in the northern part of Ethiopia. According to Yara, during the feasibility studies carried out over the recent years, significant reserves of natural resources used for the production of Sulphur of Potash (SOP) have been identified in the allocated exploration area. SOP is a premium fertilizer product especially beneficial for fruit, vegetable and coffee crops.

The planned Yara Dallol mine will have a production capacity of approximately 600,000 tonnes of SOP per year, equivalent to approximately ten percent of the global market. The products will be mined using solution mining, meaning there will be no open pit at the site.

Yara Dallol is a 51.8 percent Yara International owned company. The other owners are Liberty Metals and Mining Holdings (25 percent) and XLR Capital (23.2 percent). A final investment decision is expected towards the end of 2018. According to Yara, the total capital expenditure frame for the project has yet to be finalized, but significant efforts have been made to optimize expenditure, and the amount has been reduced from the previously estimated USD 740 million.

Yara is the third company to sign potash mine development agreement with the MoMPNG after Allana Potash and Circum Minerals. In the past two years the ministry has revoked ten exploration licenses that belong to companies engaged in potash exploration projects in the Danakil region for failing to execute the projects.

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