Oromia Water, Mineral & Energy Bureau terminated the exploration and extraction concessions of 84 mine developers and operators in mid-September.
The firms were unable to execute their duties, failed to pay royalty fees and taxes, and did not create employment opportunities, according to the Bureau.
Their concessions were terminated according to a mining directive, which states that the miners should extract or produce the agreed upon quantities in specific periods of three and 10 years, with a possible extension of two years if the periods are deemed infeasible.
Concessions granted to operator in Dukem, Bishoftu, Jimma, the Shoa Zones and East and West Guji, will be returned to the government’s land bank.
“They will be transferred to youth associations with the aim of creating job opportunities,” said Getu Birina, director of mineral administration at the Bureau.
Nonetheless, the termination of the concession will be submitted to the Oromia Regional State for a final decision by the Bureau. Prior to that, however, the developers can challenge the decision at the Grievance Hearing Committee of the Bureau.
The Bureau asserts that aside from failing to meet their deadlines and paying their duties, they did not submit proper quarterly reports on project statuses.
“The Bureau has tolerated them for more than three years after the deadline for submission, under the circumstances,” Yirdaw Negash, head of the Bureau, said. “Most of them have had concessions since 2004.”
Miners pay a fee on the concessions to the tune of five Birr to six Birr a hectare for exploration; and 500 Br to 600 Br a hectare for production.
The size of land that can be conceded for exploration could be as high as 20 square kilometres and 20ha for exploitation.
Zeta Construction is one of 84 operators whose mining license was terminated. The company took six hectares of land in Dukem for black coal exploitation in 2004. Getu, director of the Bureau, says that there was no progress on the project.
But Messay Gesesse, human resources administrator of Zeta, one of the few companies in the country allowed to import and distribute dynamite for construction purposes, has a different perspective.
“No one notified us about the termination of the concession,” he said. “We have even requested another land parcel, since this one does not have adequate coal to produce.”
Another company that faced the same fate as Zeta is Data Construction Plc, which had been operating in East Shoa Zone, Bosset Wereda, since 2006. It received a concession for nine hectares of land to produce black stone, which is used for construction purposes.
Daniel Tadesse, CEO and shareholder of the company, which was established in 2000, told Fortunethat before calling him to receive a letter of notification, personnel from the bureau visited the site at Bosset twice.
The first time they visited the site and discussed the challenges we faced in the project. During a second visit, they came to suspend the work at the site without giving notice, according to Daniel.
“I have tried to talk to the Bureau’s head twice, but I did not get a positive response,” said Daniel. “I have decided to take the case to court.”
The notice was broadcasted on OBN Television and letters were sent to every office or given adresses, according to Getu.
Since 2006, the company has invested more than 10 million Br in building a rock crusher site and paid for transformers to produce gravel for self-use as well as other construction companies.
“Within this period, we paid taxes, royalty fees and had hired people from the community, all the while tolerating the frequent power interruptions,” he said.
Mulugeta Alene (PhD), associate professor at Addis Abeba University’s School of Earth Science for more than two decades, relates such problems to a lack of strictly defined laws set forth by the administrative hierarchy within regions, woredas and zones.
“The mining law should be amended as it has loopholes that allow both the Bureau and the investors to violate rules,” he remarked.
There are around 1,400 large-scale miners in the Oromia Regional State.
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