Tuesday, April 23, 2024
BusinessCorporation, regional government locks horn over salt mining license

Corporation, regional government locks horn over salt mining license

The Minerals, Petroleum and Biofuel Corporation has requested for an extension of its salt mining license it operates in Afar regional state, despite an objection filed by the region’s officials.

The mining license, which was approved twenty years ago, is set to expire by June 2022.

Signed by Awol Arba, Afar regional state president, in a letter sent to the Ethiopian Ministry of Mines, requested the transfer of the salt mining project to Afar Development Association, a state owned enterprises under the Afar regional government.

“For the past twenty years, the people of Afar region did not benefit from the salt mining project, even though it is located in the region,” stated the letter.

However, managers of the Corporation also lodged a request to the Ministry of Mines to renew the license.

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“We have requested for the renewal of the salt mining license and expect a response from the Ministry,” Rahel Getachew, CEO of the Corporation told The Reporter.

The Corporation, which is a state owned enterprise, holds 83 percent of the Afar Salt Mining Share Company, while the rest is owned by EFFORT. However, since EFFORT’s shares and assets are being administered by the Ministry of Finance, the Corporation has become the sole actor in the share company.

The House of Peoples’ Representatives (HPR) raised the paid-up capital of the Biofuel Corporation, just two years ago, to a staggering 16.7 billion birr, of which 4.17 billion birr is paid in cash and in kind. However, because the approved capital was not fully injected on time, the Corporation has been running out of a working capital.

The Corporation has been giving up some of its major mining sites including the Adola gold mining, Kenticha tantalum mining and Yayu coal mining sites.

The mining licenses of these sites were transferred to the Oromia Mining Share Company.

Considering the trend, the probability of the Corporation losing its salt mining license in Afar remains high, according to insiders.

“The government would not snatch those mining licenses if the Corporation was efficient in the first place. We have been providing many supports to the Corporation that we did not give for other SOEs. The Corporation has been poorly performing and is among the SOEs that are registering losses,” said an official at the Ministry of Finance, whose name is withheld upon request.

However, Bacha Faji, communication director at the Corporation previously told The Reporter that the government’s failure to inject the paid-up capital approved by the HPR, severely affected the Corporation’s capacity to operate its mining sites. Bacha also stressed the Corporation is embarking on new mining sites, as well as adding value on minerals, before they are exported.

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