– Mining firms must provide the federal government with five percent equity
– Regions will get two percent equity
Ethiopian lawmakers are seeking changes to the draft mining law to increase the share of equity that regional states receive from mining permits and revenues of mining firms.
The move comes as MPs, pundits and right groups push for greater regional state participation and ownership in the mining sector.
The draft law, which is under scrutiny, has faced criticism for not doing enough to ensure that local communities and regional states benefit from mining activities.
MPs demanded for the enhanced participation of regional states in the mining sector and provide them with a fair share of the revenue generated from mining operations.-
The proposed “Mining Resources Development Proclamation” draft outlines that any holder of a mining license must provide the federal government with five percent equity in their mining investments at no cost.
Similarly, regional states where mining operations take place will receive a two percent equity stake at no cost.
Nonetheless, MPs have recently highlighted the inadequacy of the regional states’ equity share during a parliamentary session. They have called for an increase in the equity share to ensure that regional states benefit fairly from mining activities.
Meseret Zelalem (PhD), a member of parliament, stated, “The draft has to be prepared to help the larger public who are giving their land for mining exploration,” adding, “The amount is insignificant and must be revised.”
MP Ashine Asten concurs.
Ashine stated that the proposed two percent grant for a regional state’s equity share was insufficient in light of the significant impact these miners have on the environment and society.
This is especially true given the presence of cyanide and mercury in certain mining operations, both of which have negative effects on society and the environment, according to MPs.
“Besides, there are not enough healthcare or educational facilities in mining locations, and child labor exploitation is evident. In this situation, I suggest increasing the share and putting the required safety precautions in place,” Ashine said.
MPs are hopeful that the next debate on the “Mining Resources Development Proclamation” draft will consider elements that support the livelihoods of nearby residents and compensate workers in the mines.
Another MP has suggested that the equity share for both the federal and regional governments should be increased to maintain balance and provide sufficient funds for society.
During the parliamentary session, an MP highlighted the importance of ecological restoration in mining areas to restore ecological balance, which requires significant funding from local administrations.
The proposed proclamation seeks to decrease the royalty fees on large-scale mining from seven percent to five percent. Precious minerals will carry a royalty rate of five percent, while semi-precious, metal, chemical, industrial, construction, and salt minerals will be taxed at a four percent royalty rate.