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Spanish, Australian firms partner to prospect for gold

A Spanish firm, CRAU, has partnered with an Australian mining firm, MEGADO, to prospect for gold ore in Southern Oromia region.

CRAU disclosed that it has undertaken a preliminary geological study in the Shakisso area and identified a huge potential for gold and other base metals discovery. The company has applied to the Ministry of Mines and Petroleum to be given gold exploration licenses in two locations.

Briefing reporters in his office in Addis Ababa on Wednesday Pablo Artinano, president of CRAU, said that his company has been engaged in agriculture related businesses in Ethiopia adding that the company now wants to venture into the mining sector. Artinano said that in collaboration with a local mining firm Babicho Mining, CRAU has undertaken a preliminary study in a license area measuring 130 sq.km plot of land north of Shakisso near Kibre Mengist town. CRAU owns 80 percent stake in Babicho Mining and the remainder is owned by two Ethiopian entrepreneurs.

CRAU has also undertaken a preliminary study on a second license area covering 200 sq.km of land south of Lega Dembi, Memora locality. Artinano noted that the two license areas have a huge potential. “The Adola Green Stone belt has a huge potential for primary gold discoveries,” he said.

According to Artinano, CRAU has partnered with the Australian mining firm, MEGADO, to prospect for gold ore in the two license areas. CRAU has also secured financial backing from a renowned Australian investment firm, Patersons Corporate Finance. Established in Perth, Western Australia in 1903, Patersons provides equity and debt capital to emerging companies.  

Executives of CRAU, MEGADO and Patersons were in Addis Ababa this week on a working visit. The business delegation met and discussed the planned investment project with officials of the Ministry of Finance, the Ministry of Mines and Petroleum and the Oromia Water and Mining Bureau. “We had fruitful discussions with the authorities. They encouraged us to invest in Ethiopia,” Artinano said.

According to Artinano, the exploration license applications are being reviewed by the Ministry of Mines and Petroleum. “We hope to secure the exploration licenses soon,” he said. The delegation held meetings with Eyob Tekalegn (PhD), State Minister of Finance, and Samuel Hurkato (PhD) Minister of Mines and Petroleum. “We also got a green light from the Oromia Regional State authorities,” Artinano said.

Michael Gumbley, CEO of MEGADO, said that once the company secures the exploration licenses it will be listed in the Sydney Stock Exchange. Gumbley said MEGADO will own 100 percent stake on the mining projects adding that CRAU would give up. “We want to make a significant investment in Ethiopia. We came here with a strong commitment. We want to explore and mine,” he said.   

With regards to corporate social responsibility, Gumbley said that MEGADO came to Ethiopia to engage in long-term investment projects. “We did not come here to do a business transaction and leave. We came here to stay for long,” he said.

According to Gumbley, his company would engage the local communities in development projects. “We want to invest in the local community. There could be mining companies who worked in Ethiopia for years and did nothing to the community. But we want to learn about the communities needs and work together in addressing those issues. We do not want to sit here and decide what to provide to the local community. We want to engage them actively in developing water, school or food security programs. We do not just give away money to an NGO,” he said. “We want to be active. We want to have discussions with local communities and make need assessment and collaborate with the local administrations,” he added.

The Shakisso area is well-known for its rich mineral resources including gold and other precious minerals. It was explored by British geologists in the 1950s and by the former Union of Soviet Socialist Republics (USSR) geologists in the 1980s. The largest gold mine in Ethiopia is located in the Lega Dembi area near Shakisso town.

The mining sector has been generating a significant foreign currency to the country. However, the mineral export earning has been declining in the past five years. The mineral export which used to fetch more than 600 million USD has nose dived to only 44 million USD. The Ministry of Mines and Petroleum has established a technical committee that would work on the revival of the sector.     

Prime Minister Abiy Ahmed’s administration has identified the mining sector as one of the priority sectors to transform the country’s economy. The administration wants to use the mining sector as an engine of growth to propel the economic growth. The government hopes to open one million jobs in the sector and generate over a billion dollars annual export revenue.