Despite success, MIDROC Gold Mine awaits license renewal


So far the sole large scale gold miner in the country, MIRDOC Gold, is still waiting for the renewal of a gold mining operation license for its site at the Lege Dambi Gold Mine, Capital learned.
MIDROC Gold Mine, which bought the state owned Lege Dembi Gold Mine in 1997 at a cost of USD 172 million for 20 years, will conclude its initial deal before the end of the current budget year.
The deal between MIDROC and the government of Ethiopia two decades ago included a possible ten year extension. Experts say this is a common practice but MIDROC Gold has not been able to obtain a mining license extension, according to a source.
Sources said that the company has already submitted the extension request to the Ministry of Mines, Petroleum & Natural Gas (MMPNG).
The mine has done well so there is no reason to suspect that production is an issue.
Experts said that there would be no reason for the ministry to revoke the mining license since the company invested large amount at the Lege Dembi site, 500km south of Addis Ababa in Guji Zone, Oromia region.
MIDROC Gold, part of the MIDROC Ethiopia Technology Group, is a company of the business tycoon Sheikh Mohammed Hussein Ali al Amoudi, who was recently detained in Saudi Arabia with prominent princes and businessmen.
The company was initially established with a capital of USD 51.6 million and commenced production mid 1998.
In the 2016/17 fiscal year, when the country exported close to six tons of gold to the international market the major share, which is about 4,023 kilograms (4.023tons) was exported by MIDROC Gold and the balance was produced by artisans.
Besides Lege Dembi the company has undertaken several new exploration and production endeavors around the same area at Sakaro and achieved quite a bit. In 2012 National Mining Corporation (NMiC) another mining company owned by Ali Al Amoudi disclosed that it discovered a huge gold resource in Tigray and Beshangule Gumuz and was the other destination for MIDROC’S new gold production since the company announced it secured a huge reserved there.
Motuma Mekassa, Minister of MMPNG, told Capital that the period for the first twenty years is not yet finalized. He said that the license renewal was not finished however and he declined to give more information. Officials at MIDROC Gold also declined to comment. They said that the Ministry is responsible for providing more information.
MMPNG says that new gold mining companies are expected to begin exporting this fiscal year and exports should double.
Currently, several local and international mining giants began exploring in Ethiopia recently. Three, Ethiopian, medium scale, mining companies, Ezana Mining, which is under the Endowment Fund for Rehabilitation of Tigray (EFFORT), Stella Trade and Industry PLC and Dawit Gold Mining Enterprise are expected to begin mining in two separate regions. In April Ezana, which undertook the exploration around Shire Endaselassie in Tigrai, began trial tests, while the other company, Dawit Gold, is also exploring in the same region. Stella would be the first miner in the Gambella region
The mining and quarrying sector is highly underdeveloped and its contribution to the GDP was limited to 5.6 percent in 2014/15. Hopes are that mineral extraction will become 10 percent of the GDP within 10 years.