Delbi Coal Mining Share Company, the only commercial producer of coal in Ethiopia, plans to extract up to 30 thousand tons from now through February 8, 2012 at an open pit mining field in Delbi area of Dedo Woreda in Jimma zone, about 400Km south west of Addis Ababa.
According to sources, it eventually plans to produce 200 thousand tons of coal annually. The company has extracted and sold more than 46 thousand tons since it began operating.
Preparation for the mining project is already underway, since the company purchased 39.2sqm of land for mineral exploration in May 2008.
The open pit mining will extract Sub-Bituminous Bitumen coal. They are also looking at other potential types of coal that could be obtained by mining underground.
According to the source, the company currently produces 4000 K Cal/Kg of crude (raw) coal but has plans in the future to refine it and go as far as 5000 K Cal/Kg and above.
Even though mining has short term consequences for the environment, the company has formed a conservation and safety section to study the impacts and report the effects to the Environment and Community Development unit at the Ministry of Mines.
Delbi Coal Mining has 55 employees out of which 22 are permanent. It supplies its coal to textile factories like Turkish owned Ayka Addis. Cement factories like Mesebo and Hung Shen in Modjo city. It also supplies to Tabor Ceramics Company and Ethio Bricks Company.
There are currently 17 foreign and local companies engaged in the exploration and surveying of coal in Ethiopia, although Delbi is the only one so far that has begun producing coal commercially.
The state owned Ethiopian Metal and Engineering Corporation has plans to undertake the construction of a fertilizer manufacturing plant that could also include coal use for electricity. It is expected to open at Yayu Wereda, Illubabor zone of the Oromia Regional State 600Km west of Addis Ababa.
According to the feasibility study undertaken by the China National Complete Plant Import and Export Corporation, COMPLANT, at a cost of 12 million birr, it is estimated that there exists over 100 million tons of coal in the Yayu area and this potential reserve can provide 300,000 tons of Urea, 20,000 tons of ethanol and 90MW of electric power annually. This would cost close to 730 million dollars based on the study period, which was 2008.
According to sources at the corporation, Delbi Coal Mining Share Company was formed initially as a Private Limited Company with 100 thousand birr capital and has since changed into a Share Company and its capital reached about 60 million birr.
It currently has six individual and company shareholders with Messebo Cement Factory being the largest. Ezana mining PLC and Oromia Agro-Processing and Industrial Group are the corporate shareholders.
The Ministry of Mines has so far granted 205 licenses to over 108 companies of which 159 are exploration licenses; 111 are foreign, 41 are joint ventures, and seven are local companies.
Among the 205 licenses are also 43 mining licenses, 21 of which are foreign 16 are joint venture and six are locally owned.
In the previous fiscal year Ethiopia earned about USD 500 million of revenue from the export of minerals.
Coal consists of carbonized vegetable matter, with four levels of quality; Peat, Lignite, Bituminous and Anthracite. The highest quality is Anthracite, which is measured in calories per kilogram.