Friday, June 9, 2023
BusinessInstability deters Oromia mining projects, substitution of coal imports

Instability deters Oromia mining projects, substitution of coal imports

Oromia Mining SC is unable to kick-off its operations as instability continues to prevail in surrounding areas of its mining sites in Oromia regional state.

The problem has posed delays in the government’s plan to replace coal locally and stop coal imports by December 2022.

Oromia Mining SC, a development arm of Tumsa Endowment for the Development of Oromia, was recently given the coal mining site at Yayu, western Oromia, which was under the ownership of the former Metals and Engineering Corporation (MetEC).

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The company was also given Adola gold mining site in Arsi, where it planned to extract 1,600 kilogram gold annually, in addition to the Kenticha tantalum mining site.

“We are unable to start operations at the sites given to us. There is increasing security threats in the areas,” said Tesfaye Tadesse, general manager of Oromia Mining SC.

Oromia Mining SC took over Yayu coal mining site but was recently given to local youth enterprises, which entered machinery supply agreements with Tumsa.

Back in January, Tesfaye, on behalf of Oromia Mining, signed agreements with Takele Uma (Eng.), Minister of Mines, Petroleum and Natural Gas (MoMPNG), to start producing 50 tons of washed coal per hour by December 2022, which is the third quarter of 2022/23 Ethiopian fiscal year.

The company allocated 268.6 million birr and the Ministry notified the central bank of Ethiopia to allocate priority forex for eight companies including Oromia Mining to import coal washing machines and meet the deadline.

The Ministry signed agreements with eight coal miners, who allocated six billion birr to produce a total of 4.2 million tons of coal.

Feven Teshome, an advisor to the Ministry, said the delay of Oromia Mining will not affect the deadline for coal import substitution.

“The other companies are in progress, especially in Dawro and Gurage. If these can start coal washing in full capacity, they can substitute coal imports,” said Feven.

Tesfaye says there is no alternative but to wait until peace prevails.

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