Artisanal, large-scale miners fall far short of gold targets
Sat Aug 17 2024
Artisanal and commercial-scale miners only managed to supply a little over half of the gold expected by the central bank during the just-ended fiscal year as security concerns and widespread smuggling networks continue to take their toll on the country’s mining sector.
Large-scale mining companies managed to supply three tons of gold over the year, significantly less than the five tons their executives had targeted. Artisanal miners fared even worse, supplying the National Bank of Ethiopia (NBE) with one ton instead of the three tons regulators had been hoping to see.
An annual report published by the Ministry of Mines indicates the country exported gold valued at USD 408 million over the year, falling short of the 480 million targeted by officials. Tantalum ore exports brought in USD 131 million, or a little over half of the targeted USD 235 million.
Yet, mining export volume grew by 22 percent in comparison to the previous year’s performance, while revenue doubled, according to the report.
“Gold exports in particular missed the target due to security problems and severe contraband activities prevailing in the sector. Commercial gold mining companies, except MIDROC Gold, missed their targets because they could not start mining production during the year due to security and related issues. Though the large-scale companies are planning to start production every year, and the government is providing support, they could not start production. Their problems are getting more complicated with every passing year,” reads the report.
The Office of the Prime Minister heads a national steering committee tasked with resolving the escalating problems in the mining sector, according to the report. Members include representatives from the security apparatus, regional administrations, and other stakeholders.
Artisanal miners from the Amhara, Somali, Afar, and Southern regions supplied no gold at all to the central bank over the year despite targeting close to 40 kilos, according to the annual report. Miners from the Oromia region managed to supply 114 kilograms—a fraction of the 942 kilos targeted. Miners from Benishangul had an equally disappointing performance, supplying less than a third of the 950 kilograms targeted. Miners in Gambella managed 285 kilos of the 500 kilos hoped for by mining officials, while miners from Tigray supplied 250 kilograms of the 300 kilos targeted.
Large-scale mining firms did not fare much better. They managed to supply less than 3,200 kilograms of gold to the central bank in 2023/24, or 64 percent of the goal.
Oromia Mining, which is partially owned by the Oromia regional government, targeted 63 kilos but achieved zero. Etno Mining, YMG and Ezana Mining Development also had nothing to show for their efforts despite lofty goals of supplying 500 kilos each. Zumbara managed 25 kilograms of the 91 it had planned.
MIDROC was by far the most successful, managing to meet 89 percent of its target to supply a little over three and a half tons of gold.
Mineral exports brought in a total of USD 427 million in 2023/24, according to the report. Gold accounted for USD 408 million. Tantalum exports generated USD seven million, while lithium and opal exports brought in three million and 2.7 million, respectively.
Tulu Kapu, a large gold mining project in Wollega, is among those that have stopped activities due to security issues, according to the report.
“The government is providing support in order to make the company resume the project,” it reads.
The NBE scrapped its policy of paying a 65 percent premium to miners supplying gold following the liberalization of the forex market. Sources told The Reporter that some regional states and mining companies have stopped supplying gold to the central bank since the floating was effected, discouraged by the narrowed profit margin.
Source: https://www.thereporterethiopia.com/