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Council of Ministers to endorse two large scale mining licenses

Council of Ministers to endorse two large scale mining licenses

The Council of Ministers is going to endorse two large scale mining licenses to be given to Yara Dallol BV and the Harvest Gold project of Tigrai, it was learnt. 

The Ministry of Mines, Petroleum and Natural Gas (MMPNG) two weeks ago remanded the draft of large scale mining licenses to the Council of Ministers for endorsement. Reliable sources told The Reporter that the Council of Ministers will soon approve the mining licenses.

Yara Dallol BV, a subsidiary company of Yara International, has been prospecting for potash mineral deposits in the Dallol depression in the Afar Regional State. Yara has finalized its exploration project that costs USD 100 million. The company completed the definitive feasibility study and submitted it to the MMPNG in 2015.

The company submitted an application for large scale mining license that would enable it to extract potash mineral, a crucial industrial mineral for fertilizer production. Yara which discovered a vast potash deposit in its concession in the Dallol depression proposed to produce 600,000 metric tons of potash annually by applying solution mining (artificially dissolving minerals occurring naturally in a solid state to recover compounds occurring naturally in solution).

The board of directors of Yara has approved the project proposal. According to the company, estimated capacity of the Dallol project is 1-1.5 million tons of potash per year, with resources of more than 30 years mining. Yara hopes to supply ten percent of the current global potash market.

Yara plans to build a potash mine in the Dallol depression. It will also construct a potash fertilizer factory. The total cost of the project is estimated at one billion dollars. Yara Dallol plans to begin mining activities in end of 2018. Yara International is a Norwegian agricultural chemicals giant that has been supplying fertilizers to Ethiopia.

Yara would be the third company to sign an agreement with the Ethiopian government after Allana Potash and Circum Resources to mine potash in the Dallol depression.

“The negotiation with Yara took us more than a year. Probably this is the longest time we spent on dealing with a mining license,” a senior official of MMPGN told The Reporter. “Once the mining license is approved by the Council of Ministers the mining agreement will be signed with Yara.” 

The second large scale mining license tabled for approval is the Harvest Gold Project of Tigrai. The project is located 600 km north of Addis Ababa.

The Harvest Gold project is jointly owned by East African Metals, a Canadian company, and Ezana Mining Development, a local private mining firm. The Vancouver based mineral exploration company owns 70 percent of the Harvest Gold project while Ezana Mining holds 30 percent of the shares. A vast gold, silver and other base metals deposits have been discovered in the Harvest project that comprises three contiguous exploration concessions covering approximately 86 square kilometres, including Terakimti, Igub, and Hamlo.

The Harvest Gold project is expected to produce 2.5 tons of gold per annum at the initial stage. Ethiopia annually produces nine tons of gold generating more than USD 300 million in revenue. MIDROC Gold, KEFI Minerals and Ezana Mining are the three companies engaged in large scale gold mining projects in the country. The American mining giant Newmont has also established a joint venture company with Ezana Mining to develop a large scale gold mine in Tigrai.