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Ethiopian minister sees Allana project as catalyst

[Motownwing]

Mon, 03/04/2013 - 12:56 EDT - Financial Post

In the mining world, Ethiopia is a tiny player and is desperate to catch up. It was a command economy until 1991 and never developed a modern mining sector. But mining minister Sinknesh Ejigu said in an interview that there are more than 100 companies active in the country, and she is hopeful that the catalyst for more development will be Allana Potash Inc., which is developing a US$642-million project.
“This will be energizing to others,” she said.
Allana is facing a frightening capital cost for a junior mining company, but CEO Farhad Abasov noted that the company has a couple of advantages in Ethiopia. One of them is that it can get debt financing from development financial institutions (or DFIs) so it does not have to rely on bank debt.  These institutions want to invest in economic development in Ethiopia, and this gives them a way to do it. Allana is already backed by International Financial Corp., and he said Export Development Canada is interested in getting involved as well.
Allana also has port access locked up, and has a key freight advantage as it is close to the Indian market. The hot, dry weather is also ideal for Allana’s solution mining proposal, Mr. Abasov said.