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After 15 years of exploration and spending 79
million Br, senior managers at National Mining
Corporation (NMiC) announced, last week, the
discovery of the largest gold reserves ever
discovered, in Oromia and Tigray regional states.
The two regions are where the nation’s largest gold
reserves were long-believed to be located, according
to geological data from the Ministry of Mines (MoM).
NMiC is one among several mining companies that the
Ministry has granted concession rights to, such as
Nyota Minerals (Ethiopia) Ltd and Sheba Exploration
Ltd.
The latest discovery will give NMiC the competitive
edge in the mining industry, when it begins
exploiting the 568,000kg gold reserves found in Dawa,
Oromia, and Werri, Tigray, company officials
disclosed. When it starts production, the
Corporation will operate the largest goldmine in
Ethiopia, with the capacity to produce 6,000kg of
gold from both areas, almost doubling the volume
that MIDROC Gold currently produces. The latter
exported 3.5tn of gold during the last Ethiopian
fiscal year, covering nearly 31.5pc of the 485.3
million dollars in revenues that the country has
generated from the export of the precious metal.
Established in 1993 with a registered capital of 43
million Br, NMiC is owned by Mohammed Hussein Ali
Al-Amoudi and, formerly, his brother Hassen Hussein
Ali Al-Amoudi. The company launched its operations
two years after its incorporation with a Russian
trained mining engineer, Melaku Beza, as its
founding chief executive officer (CEO). Acquiring
the Awash Marble Factory from the state in 1993,
which has an annual capacity of 300,000tn of marble,
limestone, and granite, NMiC took concession of the
Lege Dembi goldmine, in Odo Shakiso, Borena Zone,
Oromia Regional State, for 172 million dollars.
An agreement signed with the now-defunct Ethiopian
Privatisation Agency required it to set up a
separate company to run the operations at this site.
This has subsequently led to the incorporation of
MIDROC Gold, now under the management of MIDROC
Industrial Group, run by Arega Yirdaw (PhD).
NMiC, nonetheless secured concession rights to
explore for gold and base metals in a 472sqkm area
in Dawa, an area within the same area but a few
kilometres from Shakiso. The company has had
exploration rights over three sites – Werqi Amba,
Werqi Tabi, and Chemit – in the Abi Adi area of
Tigray, 130km west of Mekelle. The mining firm
covers a total of 1,637sqkm, although its intensive
explorations have only been conducted on about
300sqkm.
A preliminary economic assessment (PEA) conducted by
Venmyn, a South African-based consulting firm, shows
that the Corporation can start production with
80,706kg of gold in the Dawa area, which is
estimated to have reserves of 550,000kg of gold for
20 years.
Three experts, hired by the consulting firm, in
economics, geology, and metallurgy were in Ethiopia
and visited the discovery areas two months ago,
Abera Degefa, deputy manager of NMiC, disclosed to
Fortune, declining to disclose the amount paid to
the consultant.
Managers of NMiC project plan to start production in
three years and hope to generate total revenue of
four billion dollars within 20 years of
exploitation, according to the PEA report. It also
projects to make a total profit of 84.8 million
dollars from gold and silver mined at Werri, within
nine years.
NMiC, which is known for its marble exports to
Middle Eastern and European countries, will have to
make an investment of 326.4 million dollars, of
which 121.5 million dollars will go to the Dawa
project, according to experts from the South African
consulting firm.
“The results of the consultants have exceeded the
management’s expectations and make the project
profitable with the lowest capital expenditure,”
Melaku said on Thursday, December 29, 2011, at
Sheraton Addis.
The Corporation will also float a public tender to
hire a firm that will conduct an environmental
impact assessment on the project areas before
exploitations begin, Melaku disclosed.
The federal government is projected to collect a
total of 17.6 billion dollars in the form of
corporate tax and royalties during the total 29-year
concession period from the two sites, according to
the feasibility studies conducted by the South
African firm.
The MoM has collected a total of 104.4 million Br in
royalties from 26 companies in the last fiscal year,
out of which MIDROC Gold has paid the most,
amounting to 100.1 million Br.
The Ministry, however, has now ceased to issue new
exploration licences.
NMiC has also discovered a total of 1.9 million
kilograms of silver as well as 50.4 million
kilograms and 42.4 million kilograms of lead and
zinc base metals, respectively, in the Warri area. |
