The Ministry of Mines, Petroleum and Natural Gas (MoMPNG) on Thursday awarded a small scale gold mining license to a Chinese mining firm, Nankay Mining PLC, that enables the company to mine placer (alluvial) gold in the Gambella Regional State in western Ethiopia.
The agreement was signed by Motuma Mekassa, minister of MoMPNG, and Key Shinka, CEO of Nankay Mining. In a statement sent to The Reporter the Ministry said the small scale mining agreement is valid for two years and the agreement could be renewed twice for five years.
The license area covering 2.04 sq. km of land is found in the Gambella Regional State, Agnewak Zone, Abebo wereda along Seli River. Nankay has allocated 50.3 million birr for the gold mining project which is expected to produce 201 kg of gold in the coming two years.
Placer (Alluvial) gold is usually mined in river banks with simple mining technology. The gold bearing rocks are crashed by crasher machine and washed by water to find the refined gold ore. Alluvial gold is traditionally mined by local communities in five regions – Tigrai, Oromia, Gambella, Benishangul, and Southern regional States.
According to a study conducted by the World Bank, there are more than one million artisanal miners in Ethiopia producing nine tons of placer gold yearly. Most of the gold produced by the artisanal miners is supplied to the National Bank of Ethiopia while a significant amount is smuggled out of the country to neighboring through borders.
The increasing contraband gold trade in recent years is becoming a grave concern to the government. Gold used to fetch more than 600 million dollars every year. This has been dwindling since 2014 and hit rock bottom last year generating only 230 million dollars.
