Ethiopia’s export mining revenue fell short of its target by a whopping 255 million dollars. This was largely due to what the Ministry of Mines (MoM)said was a dismal performance in gold exports.
The year 2012/13 was supposed to see MIDROC and artisan miners exporting 18,645.5kg of gold for 98pc of the 848.3 million dollars expected from the mining sector. The two exporting groups fell short of the targets set for them, however, by a cumulative 6,064.95kgs. MIDROC would only export 4,193.71kgs, down from its target of 5,445.5kgs; whilst the artisans produced only 8,386.84kgs out of a target 13,200kgs. MIDROC and the artisans brought in 143.8 million dollars and 430.6 million dollars from their respective exports.
The failure of the two to meet their targets, according to an official at the Ministry, was the plunge in gold price. This plummeted from 68.78 dollars a gram in August 2011 to 44.09 dollars in July 2013.
“With low prices, both the company and artisans tend to hold on to the gold until there is improvement,” the official from the Ministry explained.
Although the MoM constantly negotiates with both MIDROC and the artisans to sell their stock, it cannot actually force them to do so. MIDROC, for example, had not sold the 306.38kg of gold it produced in June by the time the fiscal year ended, according to the official.
MIDROC’s officials authorised to speak to the media were not available for comment.
On a regional basis, only Oromia and Gambella managed to yield near the targets set for them for the year. Artisans from Gambella sold 1,040 kg, which was 95pc of the target. Oromia artisans, who sold the largest amount, sold 3,317.3kg of gold out of a target of 4,000 kg.
Despite the same amount being expected from artisans in Tigray, they only managed to sell 2,298.53 kg – 57pc of the planned amount. Benishangul-Gumuz, which was expected to sell 2,999kg, sold only 1,083.86kg. The Southern Regional State performed the least well, with only 546.9 kg of gold out in the market – 27pc of what the Ministry projected.
Although exports of other mined products, such as gemstones and marble, exceeded their targets, this did not improve the overall picture. This is due to the fact that gold brings in a large share of revenue. Gemstones, for instance, brought in 12.24 million dollars, doubling what the Ministry had targeted initially. Artisans sold 25,078.26kg of gemstones in the international market, which is 39pc more than the planned amount. Companies also exported 1,320.2tns of marble, which is more than double the amount targeted by the ministry.
Unexpected foreign exchange earnings also came from tantalum, which was not included in the ministry’s plans. Artisans brought in 1.59 million dollars of additional foreign exchange by selling 32.95tns, whereas companies sold the 48.52tns tantalum they had in stock.
All of these other mined products combined only brought in 18.9 million dollars, however. This is only three percent of the total 593.3 million dollars collected from the export of mined products. Foreign exchange earnings from the mining sector make up 20pc of the total export revenue, according to the performance report of the MoM.
In the coming year, the Ministry has a more sober forecast of revenues. This is because the MoM has banned the export of rough gemstones in the current 2013/14 fiscal year.
“It will take time until capacity to add value will be developed. Thus, we are expecting much lower revenue from gemstones,” the official from the MoM told Fortune.
The ministry only expects 250kg of value-added gemstones to be exported this fiscal year. At 18,645 kg, it also has not made any increments to the amount of gold it projects to sell. In total, the MoM expects to get 777 million dollars from export revenues in 2013/14, which is eight percent less than its projections for the previous year.
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