Wednesday, February 21, 2024
NewsCanadian mining co prepares to resume Tigray operations as regional officials move...

Canadian mining co prepares to resume Tigray operations as regional officials move to revoke concessions

  • Federal efforts to restructure Ezana Mining face clerical obstacles

A Canada-based mining firm that was forced to halt its operations in Tigray following the outbreak of war has announced intentions to restart its work despite the regional administration’s efforts to revoke the licenses of businesses that have been inactive.
In a statement issued on February 7, 2024, Sun Peak Metals Corporation announced it is “pleased to report that the company is prepared to resume exploration activities on the Shire Projects.”

“We are very happy that the Tigray region is again peaceful and stable,” stated Greg Davis, CEO of Sun Peak. “Multiple governmental and non-governmental agencies have been supportive of [the company] re-entering the region. We are looking forward to the resumption of exploration work and drill testing our high priority copper-gold VMS targets.”
In its January 2024 report, Sun Peak also stated it aims to acquire a 51 percent stake in Axum Metals Share Company. The investment will enable Sunpeak to take over Axum’s Terer and Meli gold sites. The company plans to finalize the five million dollar acquisition in three years, according to the report.

The acquisition would bring the number of Sun Peak’s projects in Tigray to six. Ezana Mining Development Plc, a subsidiary of the Endowment Fund for the Rehabilitation of Tigray (EFFORT), owns a 96 percent stake in Axum Metals. The remaining four percent is held by other EFFORT subsidiaries such as Trans and Guna. Nonetheless, insiders criticize Ezana’s move to sell Terer and Meli projects, which it developed with public funds sourced from EFFORT.

Sun Peak executives are also preparing to resume activities in gold exploration sites in Tigray, where operations have been stalled since war broke out in November 2020. These sites include Nefasit and Adi Dairo, which Sun Peak owns 100 percent of the rights to. Additionally, Sun Peak also targeted sites like Hamlo, Meda, Inda and Angoda North. Sunpeak’s January report also states the company has projects in Eritrea along the Arabian Nubian Shield.

Nonetheless, both Sun Peak and Axum Metals are among the 27 mining firms whose concessions are set to be revoked by the Tigray Interim Administration (TIA) Bureau of Land and Mining. These companies were licensed by the Ministry of Mines prior to the outbreak of war, but the concessions expired during the conflict.

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As a result, the Bureau recently wrote a letter to the Ministry, requesting the concessions granted to 27 firms be revoked. TIA officials, and local communities in Tigray, are reportedly unhappy with the lack of progress on the part of these firms, who have been present in the region since before the war broke out.

Last month, Fiseha Meresa, director of licensing and administration at the Tigray Mining Bureau, told The Reporter “The Ministry did not respond to our letter. Meanwhile, the region is unable to utilize its resources.”

However, immediately following publication, officials from the Ministry traveled to Tigray a few weeks ago and reportedly pressured the Bureau’s officials to allow the 27 firms to stay in the region.

The Ministry is keen to maintain the concessions, according to sources close to the issue. Officials from the Ministry of Mines declined to comment on the developments.
“We’ve secured approval to resume operations in Tigray. We were on force majeure due to the conflict and the license stays until the force majeure is over. That is why we are getting back into operation now,” said Yordanos Melaku, country manager for Sun Peak.

The Canada-based firm holds no less than six exploration concessions in Tigray, though some of them are held jointly with other companies.

“Now there are enabling situations to resume activities,” Yordanos told The Reporter. “We’ve conducted an independent security analysis, which indicated enabling conditions to start activities on three concessions. So, it doesn’t mean everything is back to normal in the region.”

Yordanos told The Reporter she believes the Tigray Mining Bureau wrote the letter requesting the revocation of concessions due to a “misunderstanding.”

“The letter did not take into account the force majeure. But they rescinded the letter later on. I have information the Bureau retracted the letter and wrote another one to the Ministry that states we can continue. So, our license is valid now. It stays where it is.”
Reports indicate that Sun Peak’s share sales in Canada stock rose following Sun Peak’s statement of its preparation to resume activities in Tigray projects.

“The intention of Sunpeak’s latest statement is not actually starting activities in Tigray but keeping Sun Peak afloat on the Canadian stock market. Of all the 27 licenses listed by the Tigray mining bureau to be revoked, how Sunpeak alone could be allowed to resume activities,” asked a source spoke to The Reporter on the condition of anonymity.

According to The Reporter’s sources, the local communities in Tigray living in the vicinity of where the 27 concessions apply have been unhappy with the perceived inactivity of these companies for years. But the federal government’s desire to extend the concessions has placed the Bureau officials between a rock and a hard place.

An anonymous source from the Tigray Mining Bureau told The Reporter those firms have been in Tigray for several years, transferring concessions from one company to the other without any tangible progress on the ground.

“Most of the mining companies in Tigray have undergone a complicated web of share transfers. Most of them are linked to Ezana and TPLF officials. Most of the companies are created intentionally with offshore accounts just to keep the mining projects in the hands of a few people. Shares of the same mining projects have been sold and resold between phony licenses for years. It is difficult to trace who really controls those mining projects in Tigray, especially since former officials of TPLF are gone,” said the source.

For instance, the Ministry granted an exploration license for the Terer gold project to Ezana Mining in 2015. The three-year license expired in 2018, was renewed for one year, and again expired in May 2019.

Due to Ezana’s failure to ‘satisfy exploration spending commitments,’ part of the license area was relinquished. But in January 2020, Axum Metals applied for the Terer license, despite it being a subsidiary of Ezana.

Another document reviewed by The Reporter reveals that Ezana agreed to relinquish up to 70 percent of its stakes in mining projects under Axum Metals. As per this agreement, the manager of Axum Metals earns five percent of exploration expenditures incurred during the operations.

In another agreement document, Ezana was granted venture investment with Newmont, for gold and base metal mining projects in Hitsuy, Rahwa Rubaislam, Maydima, Deqwadigu, Adisero, and Debre Abay- Dedebit.

Ezana secured licenses for all of these gold and base metal sites in 2008, but was still at exploration stages when it formed a joint venture with US-based Newmont Corporation four years ago. Prior to that, Ezana had partnered with various other mining firms. The company also agreed to a venture with Newmont on precious metals mining sites in Shire and Mentebteb.

In 2013, Ezana announced it would be investing USD 17.8 million in mining projects in Tigray. However, sources claim the company embezzled public finances sourced from EFFORT, which remain unaccounted for.

The federal government, which is currently trying to restructure Ezana, has been unable to locate company documents, especially financial statements, according to sources.

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