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Canada to support study on Lega Dembi Gold Mine

Canada to support study on Lega Dembi Gold Mine

Country losing foreign currency due to mine closure

The Canadian Embassy in Addis Ababa is going to finance the environmental impact assessment on the controversial Lega Dembi Gold Mine run by MIDROC Gold.

It can be recalled that the Ministry of Mines, Petroleum and Natural Gas (MoMPNG) suspended the mining license of MIDROC Gold at the Lega Dembi Gold Mine due to furious public protests against the company’s mining operations. The local community complained that the chemical waste coming out of the Lega Dembi Gold Mine has posed health hazard on children and new born babies. They also claim that the chemical waste is killing their cattle and polluting the environment. Executives of MIDROC Gold deny the claim.

Following public riots in Shakisso town last May, the MoMPNG suspended the mining license of the company which was renewed for ten years last year. The Ministry announced that it will undertake an environmental impact assessment by an independent body. Previously experts from Addis Ababa University conducted a research on the Lega Dembi Gold Mine but the result was not made public.

The MoMPNG recently held a consultative meeting with executives of MIDROC Gold, representatives of the local community, and university scholars in Addis Ababa. Officials of the Ministry agreed to conduct a study on the gold mine by an independent organ.

Mikael Mengesha, communication director at the MoMPNG told The Reporter that since the previous study was not suffice the Ministry and stakeholders arrived at a general consensus to conduct a thorough study on the mining operation. Mikael said the Canadian Embassy under its cooperation program with the ministry agreed to support the environment impact assessment. “The embassy agreed to provide experts and cover the relevant cost to conduct the study,” Mikael said.

Accordingly, two senior experts came to Addis Ababa last month and started collecting data and held discussions with officials of the MoMPNG, executives of MIDROC Gold, and representatives of the local community. The experts returned to Canada last week. Mikael said the experts would return to Ethiopia and launch the study soon. The experts are expected to visit the goldmine, collect chemical and geological data, soil and water samples and visit the local community. “Based on the findings of the study the Ministry would take appropriate action. All the stakeholders will come up with a solution based on the recommendation of the study,” Mikael told The Reporter.

Mikael said that the mining activity should benefit the local community. “Past mistakes should be rectified. There should be reconciliation program with the local community. The mining activity should be undertaken with the consent of the community,” he said. 

The closure of the Lega Dembi Gold Mine has cost the country direly.

MIDROC Gold executives told The Reporter that the company has lost USD 10 million in sales revenue in the past give months alone. MIDROC Gold used to mine four tons of gold per annum and generates more than USD 60 million. The country’s minerals export earning has nosedived to USD 130 million in the 2017-2018 fiscal year that ended last June.   

“It is true that the country is losing foreign currency. But the well-being of the local community should come first,” Mikael said. He said that to mitigate the problem officials of the Ministry and stakeholders agreed to conduct the study as soon as possible and take remedial actions.

Attempts to get comments from the Canadian Embassy were not successful.     

MIDROC Gold, one of the subsidiary companies administered under MIDROC Technology Group, which currently has some 1,700 employees, acquired the Lega Dembi Gold Mine from the government through privatization for USD 172 million in 1997. Since 1998 the company has been mining gold and silver from the mine, located in the Oromia Regional State, Guji Zone, Lega Dembi locality 500km south of Addis Ababa.         

The Lega Dembi Gold Mine has an installed annual production capacity of four tons of gold. It was an open pit mine but MIDROC Gold has built the first underground mine in the country and conducted various exploration activities to extend the economic life of the mine.