Ethiopia to Amend Mining Law2Merkato has re-posted the story about the amended mining law (I posted the original story below's 2Merkato)
Written by Meraf Leykun Monday, 05 August 2013 13:20
The Ethiopian Ministry of Mines has drafted a bill to amend the country's mining law to enhance investment in the sector, The Reporter reported citing a senior official from the ministry. According to the source of The Reporter, the bill has been referred to the House of Peoples' Representatives standing committee on Environment and Natural Resources.
The amendment is said to include revision of mineral exploration and mining license application procedures and incentives accorded to the sector. Revenue from mining contribute only one percent to Ethiopia's Gross Domestic Product. The investment capital in the sector has reached 14 billion Ethiopian birr and revenue from mineral export stood at US$600 million per year, according to the Ministry.
Source: The Reporter
Ministry revises mining law
03 August 2013 Written by Kaleyesus Bekele
The Ethiopian Ministry of Mines has formulated a new revised mining law that is aimed at encouraging mining companies to invest in the mining sector in Ethiopia. A senior official at the Ministry of Mines told The Reporter that the ministry recently presented the revised mining law to the House of Peoples’ Representatives. The official said the draft law has been remanded to the Standing Committee of Environment and Natural Resources.
The senior official said the revised mining law encourages mining companies to venture into the mining sector. The law stipulates the procedures of application for minerals’ exploration and mining licenses, and incentives. The Standing Committee for Environment and Natural Resources is expected to evaluate the draft law and come up with recommendations. The revised mining law is expected to be endorsed by Parliament shortly.
The Ministry of Mines recently revised the mining tax proclamation. The Ministry slashed the mining income tax from 35 to 25 percent.
The Ministry of Mines has explained to the House why it was necessary to amend the mining income tax law. The Ministry said Ethiopia is endowed with minerals such as gold, tantalum, iron and potash. The Ministry said though the country is endowed with such natural resources, the mining sector contribution to the country’s economic development is minimal.
According to the Ministry, the revenue from the minerals and quarries contributes only one percent to the country’s GDP. The investment capital in the mining sector has reached 14 billion birr. Annual minerals export has reached USD 600 million. The Ministry anticipates boosting foreign direct investment in the mining sector, thereby increasing the revenue the country earns from the export of minerals.
Large-scale mining is in its infancy in Ethiopia. So far MIDROC Gold is the only company that is engaged in large-scale gold mining. Recently, Ezana Mining secured large-scale gold mining license from the Ministry. The British mining company Nyota Minerals applied for large-scale gold mining in its Tulu Kapi gold mine in the Oromia Regional State of Wollega zone but the Ministry did not yet grant it the license.
The Canadian mining company, Allana Potash, is to start large-scale potash mining in the Afar region. The Australian mining giant BHP has pulled out of its potash mine in the Afar region for an undisclosed reason. Other companies such as the Indian Sainik Potash are working on potash mines in the Dalol depression. The Brazilian mining giant, Vale, is prospecting for gold in Konso Wereda in south Ethiopia. A UK company, Stratex, has found commercial gold deposit in the Afar region. Other foreign mining firms are prospecting for iron, gold and base metals in different parts of the country.
Reliable sources told The Reporter that the declining prices of minerals in the international market is driving away mining companies. “The price of gold in the international market is discouraging mining companies from investing on gold exploration and mining projects,” sources told The Reporter. Mining companies engaged in gold production are hoarding the gold until the price starts going up again.
The price of gold fell to its lowest level in 34 months in late June, having lost a quarter of its value since the start of April. The price of an ounce of gold (31.8gm= 1 ounce) which was 1600 dollars plunged to USD 1,286.
A senior geologist working in one of the mining companies in Ethiopia told The Reporter that it was difficult to develop a gold mine at the existing price of gold. “It is impossible to raise funds from the stock market with the declining price of gold,” the official said. “So we have to wait and see. But the government’s move to revise the mining law is encouraging,” the official said.
According to the Ethiopian Ministry of Mines, the government earned USD 419 million from the export of minerals supplied by artisanal miners operating in the country in the first 11 months of the current financial year. Export of gold made up the largest proportion of minerals, generating USD 409.1 million in foreign currency, followed by gemstones and tantalum earning USD 9.3 million and USD 1.6 million. This income came from the export of 7878.3 kg of gold, 20,126.3 kg of gemstones and 32.95 tons of tantalum.
https://www.thereporterethiopia.com/index.php/news-headlines/item/817-ministry-revises-mining-law