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The Ministry of Public Enterprises (MoPE) is attempting to partially privatize the country’s tantalum mining facility at Kenticha. In its latest bid notice MoPE invited experienced partners to mine for the rare metal.
However experts are criticizing the bid document claiming that it should focus on making value added products from the mineral as opposed to mining raw tantalum. They say a value addition factory at Kenticha will cost a minimum of USD 120 million and a maximum of a quarter billion USD. “However, this would establish an industry that would boost the country’s hard currency from exporting end products as opposed to raw production.
The bid document that MoPE issued indicated it is looking for a partner to manage and expand lithium-tantalum mining at Kenticha. The government has attempted to expand the 25 year old Kenticha mine, located 550km south of Addis Ababa at Adola, many times. However the facility is still the property of the state owned Ethiopian Minerals Development Enterprise, which is now under the Ethiopian Minerals, Petroleum and Bio Fuel Corporation.
Experts said that tantalum mining, which is exported as a concentrate, has several related products that can be produced locally.
Lithium demand has been growing becasue the battery is used in various industries so the global market is huge. For instance the lithium-ion battery automobile industry is now on the rise and is searching for lithium, according to experts.
Tantalum is a major input for the production of electronics, aircraft parts and medical equipment.
“A factory that would make value added products would really help the economy,” experts in the industry added. Tantalum is used to make mobile phones and other electronic gadgets, aircraft parts and medical equipment.
The PM has also followed the issue and the government plans to expand the mining plant as opposed to including partners just to produce and export the concentrated mineral. A pilot tantalum production project began in 1990, during the Derg era. Tantalum concentrate exports for the first six months of the current budget year has earned Ethiopia over USD four million.
Oromia’s regional administration wants to have the youth in the area to take part in producing tantalum as opposed to transferring it to a third party. However, experts say that if the factory produces value added products it will be capital and skilled labor intensive as opposed to just mining which would use unskilled labor.
“The sector is a dangerous business since tantalum concentrate consists of uranium,” an expert said.
The regional administration has already drafted a bill that would allow the region to administer natural resources. Currently the federal government manages or licenses natural resources in all regions. However, Oromia argues that this goes against their constitutional rights.
“We do not have any mechanism to control the operation, provide licensing, and enforce the law,” an expert at the region told Capital recently.
Different social, health and environmental issues have arisen at the area. Capital has confirmation from the Oromia Water, Mining and Energy Bureau that experts from environmental, social and health professions have been at the area recently to assess the effect of the mining sites including Lege Dembi Gold Mining, which is close to Kenticha.
Lege Dembi has also already completed its 20 years production license. This license is awaiting renewal. The company has submitted a request for a ten year extension to the Federal Ministry of Mines, Petroleum and Natural Gas. This is based on their original agreement that states the two parties would extend the production for ten years which is a common practice in the mining sector.
Based on that the upcoming mining proclamation that will be ratified by the ‘Chefe’ (regional council) will give the right to the region to administer the mining resources, develop, provide licenses, terminate the license or close the mine when the agreement ends, penalize and even support the regional mining operation.