Another massive gold exploration license is expected to be given to European and Australian partnered companies in an exploration area in southern Ethiopia’s popular gold belt.
Crau Mining, which is under Crau Group, a Madrid based company with a branch in Addis Ababa, and the Australian mining firm Megado which formed a partnership to mine for gold at Adola belt has concluded a pre feasibility study before the application for the exploration license around Shakiso, according to Pablo Artinano, President of Crau, which has been working in other businesses in Ethiopia for the last half decade and wants to expand into real estate and industry.
The partnership is looking at licenses in sites at Mormora and Babicho, which are south and north of Lega Dambi gold mining area at Guji zone of Oromia region, about 400km south of Addis Ababa.
At the Babicho site 20 percent is owned by local geologist and investor Yonas Chemeda and Edossa Etanna, while in Mormora the full ownership is help by a foreign partner. “Local, Spanish and Canadian geologists have assessed the area for resources,” Crau’s President said.
Fikru Birhanu, Business Development Manager of Crau, told Capital that in the mining sector Australia and Canada are well known, “that is the reason we partnered with the well experienced Australian company,” he explained.
The project is expected to be financed by Patersons Corporate Finance, an Australian firm with over a century of experience.
Alex Rovira, Director of Corporate Finance at Patersons, who visited Ethiopian this week, said that his financial firm has supported various mining investments throughout the world. The company has experience in similar projects in Africa. “We are new to Ethiopia,” Rovira told Capital.
Early this week the leader of Patersons Corporate Finance, Megado and Crau met top government officials at the Ministry of Mines, Petroleum and Natural Gas (MoMPNG), Ministry of Finance, and Oromia Water, Mineral and Energy Bureau including Eyob Tekalgn, State Minister of Finance.
During the licensing process experts at MoMPNG provided the technical evaluation and the regional government gave an approval letter for the project expected to be approved by the federal government.
Mormora holds 203 km2 of land 57km to the south of Lega Dembi; Babicho sits on 136km2 just under 20km to the north. On its website Megado stated that the early reviews conducted suggest these two sites exhibit very similar if not exact replicas of the geological formations found at Lega Dembi.
The exploration phase could take four years and the total cost shall be USD 30 million.
The Australian company that filed to be listed at the Sydney Stock Exchange is expected to be approved in October making it the second gold mining company registered on the international capital market that invests in Ethiopia. The other company, Kefi Minerals, which is in the process of developing gold in western Ethiopia, is registered at the London Stock Exchange.
Listing at the international capital market makes the business of the company more reliable and helps it to operate responsibly since it needs clear information for those who would be involved as shareholders.
Lega Dembi, which currently suspended its activity, is the only gold mining company on the industrial level. The Kefi project is in progress to mine the precious metal. The activity of the partnership at Mormora and Babicho would be the other big exploration project.
Pablo stated that the exploration license would be approved in the coming few weeks.
Aussie, European companies head south for gold
Onion,Garlic prices stink Suddenly
Brokers, hoarding, loose regulations and reduction in food production are being blamed for a spike in the prices of onions, garlic and wheat.
One kilo of onions, which previously went for 15 birr has doubled to 30 birr and a kilo of garlic has skyrocketed to 180 birr. The slow procurement of wheat also caused the local wheat market to sell it for a quintal at 2,300 birr which was 1,000 up to 1,200 birr a month ago.
A trade expert says another problem is banning heavy trucks from driving in Addis during the day as well as instability and low production but brokers are taking advantage of the situation for their own greedy gain.
Alemu (name has been changed) a city market inspection employee says Ethiopia’s agriculture must be revolutionized. 
“Agricultural commodities required for industrial use need to cost less for the products to penetrate not just the domestic market, but also the international market. It is pertinent to state that this is beyond what our aging farming population can provide. So, there is an urgent need for the modern practice of agriculture that requires the efforts of our educated youth.”
“When agriculture is made attractive, youth will go into it and produce food in large quantity, which will reduce the cost of food items. We have good climate and weather,” Alemu said.
The Addis Ababa Trade and Industry Bureau said brokers and hoarders are the main problem.
Debre Densa, Basic Commodity Distribution expert at the bureau said there must be good market linkage between the producer and the consumers.
“We can’t say that all the consumer products rise with less production, if you look around the country some products are determined by the brokers not the demand and the supply game and as a bureau we are working with cooperative unions to supply the product which helps us to decrease the products in some time but brokers are still challenging us by breaking our chain with cooperative unions,’’ he said.
This year 91 new roads expected
The Ethiopian Roads Authority (ERA) disclosed that construction of 91 roads will begin in this fiscal year. They will be paid for by an already earmarked 46.3 billion birr in the 2012 budget year, of which 38 billion birr comes from the government treasury.
Habtamu Tegegn, ERA’s Director General said that 48 road projects are new and more than half are projects in the pipeline or projects that are delayed, adding that the Authority made no new projects last fiscal year.
According to the Director General, the government allotted a huge budget for road sector. In fact, it was three times the amount of the previous year but still more needs to be done.
For the last 21 years, the sector swallowed more than 256 billion birr. The government treasury paid for 83 percent of this to build 16,000km of road networks.
“We should follow other mechanism to boost the road coverage by engaging other actors as a single government agency cannot do it alone,” the director said.
“The federal government road network data registered close to 30,000 km. The coverage is not enough for the country. Ethiopia has an area of 1.1million square kilometers so the government must invest more in the sector until the coverage reaches 500,000 km, he added.
The nation hopes to boost this road coverage to 220,000 Km by the end of the second edition of the Growth & Transportation Plan (GTP II).
As to the Director General, ERA and regional road authorities need more clear communication in an attempt to build more asphalt roads.
Poor performance related to the contractors, and preparation of documents, beside issues related to compensation and demarcation are some of the challenges in road construction.
Out of the planned roads one connecting Addis Ababa with Debre -Birhan, Addis Ababa with Jimma, Addis Ababa with Chancho and the already started Mojo -Hawassa toll roads are some of them. The Abay Bridge that has a 21.5m width will also begin this fiscal year.
For the last fiscal year, the government allotted 28 billion birr and used its entire budget on many projects that were delayed.
“The huge budget allocation for the road projects alone will not address the problems as it takes more time and finding a new mechanism of contracting roads aggressively is needed,” the director said.
ECX to trade cotton
The Ethiopian Commodity Exchange (ECX) will begin trading industrial products for the first time in its 11 year history. The long awaited warehouse receipt financing will also be introduced in the 2019/20 budget year.
ECX that has been operating since 2008 was engaged in the trading of major agricultural commodities by introducing the exclusive trading of coffee, which earns one third of hard currency in the export market.
Currently ECX is facilitating the exclusive trading right for coffee, sesame seeds, and others like green mung bean and soybean. However, nonexclusive products like maize, wheat and haricot bean are also traded on the floor.
Since its establishment ECX traded agricultural products that are mainly used for consumption.
According to Wondimagegnehu Negera, CEO of ECX, the trading floor will start trading cotton during the coming harvest season. “The country is currently following the agro processing manufacturing sector and that will be supported by us. We will include the trading of cotton in our electronic market,” the CEO said at the press conference held on Friday August 2 at the ECX headquarters.
The exchange also targeted to introduce such kind of industrial products step by step as per its expertise and experience.
Netsanet Tesfaye, Public Relation Head at ECX, told Capital that studies were conducted to include cotton at the trading floor.
One of the expected products to be included on the trading floor from industrial products is sugar when the under construction projects are fully operational. However it will be decided in the future.
This would be the first time non edible products are being exchanged on the trading floor and even for the supply for local market. Currently the exchange mainly focus on the agricultural commodities that are exported, meanwhile trading for coffee for local supply is also held on the floor.
Currently the number of textile and garment industries is growing in the country, while the major share of inputs, cotton for textiles, is covered by imports.
On the other hand the price volatility discouraged local cotton growers despite the country’s suitable and ample land and environment for cotton production. Experts on the sector said trading the product at ECX might improve the sector marketing and encourage local producers to cultivate the product and even save the hard currency that is allocated for the import of cotton.
The electronic exchange has also targeted trading niger seeds, which is one of the oilseed products exports to different markets like the US for birds feed.
Wondimagegnehu said that niger seeds will be included at the trading as non mandatory. The oilseeds is mainly cultivates at the central part of the country in the surroundings of Addis Ababa. Wondimagegnehu also stated that the exchange has also targeted to commence the pilot project in providing loans for farmers by warehouse receipts. The idea has been circulating in the past but it was not implemented yet.
According to the CEO, warehouse receipt financing will be provided on some selected products during the budget year.
In the current budget year, the trading floor has targeted to trade 35.6 billion birr worth of 788.910 tones of agricultural commodities.
For the 2018/19 budget year 711,850 tones of commodities have been received by ECX warehouses with the achievement of 93 percent of the target and three percent higher than the preceding year.
In the year ECX traded 681,845 tons of commodities with the increment of one percent from the target and 3 percent more compared with the 2017/18 budget year.
Coffee takes the highest share by 45 percent and followed by sesame seeds that stood at 34 percent. Regarding value it has been targeted to trade 30.3 billion birr worth products, while the actual amount registered 33.8 million birr with 3 percent increment.
Besides the performance registered in the past structural improvement is crucial for the modern electronic trading activity, according to Netsanet. He said that to meet the target of modern facility ECX is currently constructed modern warehouse facilities to meet the international standard.
