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MIDROC Gold in hot water as crisis reaches climax

MIDROC Gold in hot water as crisis reaches climax

Mining companies express discontent over transgressions in regional states 

The controversy surrounding MIDROC Gold, the first large scale gold mining company in Ethiopia, reached a climax point this week when the Ministry of Mines, Petroleum and Natural Gas (MMPNG) decided to suspend the mining license of the company in the wake of a public outrage against the company in connection with an alleged environmental pollution.

The Ministry on Wednesday announced that it has suspended the mining license of MIDROC Gold to address the environmental concerns the local residents raised.  

MIDROC Gold, one of the subsidiary companies administered under MIDROC Technology Group, acquired the Legedembi Gold mine from the government through privatization for 172 million dollars in 1997. Since 1998 the company has been mining gold and silver from the mine, located in the Oromia Regional State, Guji zone Legedembi locality 500km South of Addis Ababa.         

The Legadembi 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.  

Local residents have been complaining about alleged environmental pollution that was being caused by the chemical the company uses to process the gold ore. The residents claim that the chemical waste that is coming out of the gold mine is causing health hazards.

MIDROC’s mining license, which was valid for twenty years, was due to expire last year. But six month prior to the deadline MIDROC submitted its application to the MMPNG to extend the mining license for ten years.

After evaluating the application, MMPNG has renewed the mining license for ten years. That was what prompted local residents of Shakisso town to stage a public riot last week. Bacha Faji, communication director with MMPNG, disclosed that to address the concerns of the local residents the ministry has suspended the mining license of MIDROC Gold as of May 9 until a thorough study is done by an independent organ.

Repeated attempts made by The Reporter to get comments from officials of MMPNG and MIDROC Gold were futile.  

Former minister of MMPNG Motuma Mekassa previously told The Reporter that the Ministry, in collaboration with MIDROC Gold, has hired Addis Ababa University to undertake a study the environmental concerns raised by the local residents. “If what has been reported by the community is true it is a crime. But we have to investigate the matter,” Motuma said. According to Motuma, a study has been undertaken by the Ministry and Addis Ababa University. However, the Ministry did not reveal the findings of the study to date.

The local residents claim that it was a chemical called cyanide that MIROC Gold uses to separate the gold from other impurities that is causing health complications including birth defects.

Geologists and chemists say cyanide, though it is a toxic chemical, gold mining companies use it to leach gold ore. “It is not only MIDROC Gold; any gold mine use cyanide to process the gold ore. Gold mines even in the developed world use cyanide for leaching the crashed gold ore,” a geologist, who used to work for MIDROC Gold, The Reporter. “What matters is that how you treat the cyanide.”

The geologist said after the leaching process the water which contains the cyanide flows to a pond. “There is a treatment plant and the pond is fenced and it is not clear as to how the environment pollution is caused,” the geologist said. He reckons that many years ago cattle that drunk water from the pond died instantly. “After that particular incident the pond was fenced by barbed wire.”    

A chemist who worked at the Legadembi mine told The Reporter that the reported health defects are serious indications that require an in-depth study. “Chemical experts have to physically visit the site collect samples and conduct analysis.”

An environmental expert, who used to lead the Environment Management Department at MIDROC Gold, told The Reporter that the company is one of the few mining companies that have an Environment Department with its own staff and budget.

“The department has monitoring, control and rehabilitation and restoration departments. The department constantly collect water and air samples and monitor the day to day operation of the mine. The water and air quality in the environs of the mine are tested regularly,” he said.

However, The Reporter was unable to verify this from officials at Midroc Gold as they were not available for comments.

In a related news, disgruntled mining companies have voiced their concern over the transgressions in the regional states by local residents and administrations.

The state minister of MMPNG on Monday held a consultative meeting with companies engaged in the mining sector at the Ministry. Executive of the mining companies have complained that there are flaws in the mining sector. “In some instances regional states do not abide by the federal laws,” a company executive said.

Companies engaged in the marble exploration and mining projects in the Benishangul-Gumuz Regional State protested the decision by the regional state to take marble quarries which cover more than 20 hectares of land. The regional state, two weeks ago, informed the marble companies to hand over the land in excess of 20 hectares.

The decision is applicable on all the local and foreign companies who secured the mining license from the regional government as well as the federal government. A representative of Samak Marble, an Indian marble company, said that after Indian marble companies came to Ethiopia the amount of marble locally produced has increased significantly. However, he was sad to learn that the Benishangul-Gumuz Regional State has decided take the land from marble companies. “Why did we invest millions of dollars if we are limited to work on only 0.2 sq.km of land?” The representative said that it was a breach of agreement.

Marble companies engaged in the exploration and mining projects in the Oromia Regional State stated that they were unable to carry out their work in the Oromia Region. “We are told to stop our work by a group of youth or wereda administration for unclear reasons,” an executive of a local mining firm told officials of MMPNG.

Representatives of the Minerals Petroleum and Bio Fuel Development Corporation, a state enterprise that is engaged in the extraction of tantalum and other industrial minerals in the Oromia Regional State, lamented that two of their mines have been shut down by local administrations. “We have stopped the production of tantalum concentrate at the Kenticha mine five months ago and the country is losing foreign currency which it seeks desperately,” they said. The company officials also revealed that they were compelled to suspend the production of kaoline mineral in the Bambo Weha locality near Kibre Mengist. The officials also said that illegal miners are looting tantalum mineral from the corporation’s concession.

Tewodros said that the government officials were busy with dealing with the political instability that occurred in the country in the past two years. He assured the company executives that the ministry would look in to the reported challenges and will address the issues.

The mining firms, however, said that the Ministry has become powerless. “The Ministry has been cooperative to us. Mining companies and the MMPNG have been working together like hand and glove. But the regional states are not working in a harmonized manner with the Ministry. It is better if you consult with the new prime minister and provide us with lasting solutions,” they executives said. “The Ministry provides us with technical support but this is a political problem that needs the intervention of the highest government body,” they added.  

Executives of MIDROC Gold did not participate in the consultative meeting.