Saturday, February 24, 2024
BusinessSekota Mining submits 1.2 billion birr loan application to DBE

Sekota Mining submits 1.2 billion birr loan application to DBE

Sekota Mining Plc., the first mining firm in Ethiopia to invest in iron ore, has requested the Development Bank of Ethiopia (DBE) to provide it with 1.2 billion birr loan for the development of an iron ore extraction and processing plant in the Amhara Regional State.

An Italian-Chinese joint venture company, Sekota Mining Plc., has been prospecting for iron ore in Sekota, Ziquala, and Abergelle Woredas in Wag Humra zone in the Amhara Regional State for the past five years. The exploration license area covers 242 of land.

According to Sekota Mining the exploration work conducted outlined a total mineable reserve of 79 million tons of iron ore. So far, the JV has invested close to seven million dollars on the exploration work.

After evaluating the exploration work conducted by the company the Ministry of Mines, Petroleum and Natural Gas has approved the large scale mining license application and feasibility study. Accordingly, the Council of Ministers last week endorsed the large scale mining licence. Sekota Mining Plc. and the Ministry of Mines, petroleum and Natural Gas will soon sign the large scale mining agreement that would enable the company develop the iron ore mine.

According to the feasibility study conducted by Sekota Mining, the company is planning to build an iron ore extraction plant in Sekota locality and iron ore processing plant that would manufacture sponge iron and supply the product to local foundries. The company also plans to export sponge iron to Chinese market.

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Sekota Mining was established by an Ethiopian born Italian investor Luciano Frattolin in 2012. A Chinese Metallurgical company specialized in the supply of tunnel kilns, Beijing CBRF Technology Group, has partnered with Frattolin to form the joint venture company.

Sekota Mining plans to develop the first iron ore mine in Ethiopia under three phases. The first phase which targets to build the iron ore extraction and sponge iron processing plant is estimated to cost 410 million dollars. Accordingly, the company has submitted a loan application to the Development Bank of Ethiopia requesting the bank to be conferred with 1.2 billion birr to develop the mine and build the sponge iron processing plant.

The Ministry of Mines, Petroleum and Natural Gas has confirmed the iron ore reserve discovered by Sekota Mining and the feasibility of the project. The ministry wrote a letter of support to the DBE.

Iron ore is a strategic mineral for Ethiopia which is in transition to industrialization. The country imports one million tons of iron annually. The Ministry of Mines, Petroleum and Natural Gas has outlined a strategy to focus on industrial minerals that augments the growth of the manufacturing sector.   

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Video from Enat Bank Youtube Channel.


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