A Canadian mine developer, East African Metals (EAM), requested for a permit to extract gold and silver in Dam Tamburk and Meta Bula on December 13, 2017, just a week after the Ministry of Mines, Petroleum & Natural Gas (MoMPNG) issued an extraction licence to the Company.
With the new permit, the Company plans to mine silver and gold in two additional areas located in the Tigray regional state, 600Km north of Addis Abeba.
The two gold deposits are situated 35Km northwest of Shire, a town with a populace of 60,000 which also hosts a recently completed airport.
East African hired Beles Engineering Plc to undertake an environmental and socioeconomic assessment regarding the project’s effects on the town’s development. The study yielded encouraging results as it found the people living around the gold deposits to be supportive, according to EAM’s official website.
Motuma Melissa, minister of MOMPNG, confirmed that the Company’s proposal is under review.
“We will complete our review within two months,” he said. “Then, based on the results, the Council of Ministers (CoM) will either reject or accept their proposal.”
Andrew Lee Smith, the CEO of East, is hopeful.
“An opportunity to have three deposits within a 20-kilometre radius in an area with well-developed air, road, and power infrastructure offer exceptional potential for project development,” he said.
The previous licence entailed the Company to conduct mining in Terakimiti, in the Tigray regional state, where over 425 licensed artisanal miners operate.
The permit allowed the Company to extract a minimum of 520kg of gold and more than 2,000kg of silver in the next six years with a possible renewal every decade.
Before securing the first permit, the Company had explored the mining area, covering 2.7sqkm, for over eight years.
“The Company must become fully operational within two years,” Motuma Mekassa, minister of Mines, Petroleum & Natural Gases told Fortune.
The new project transpires when the government is struggling to boost gold exports, which have been underperforming for the past half a decade.
Being one of the major exportable items in the country, gold’s share in the total exports slumped to seven percent in the past fiscal year- three times lower than in 2012.
To buck this trend, the government slashed the minimum amount of gold it receives by three folds from 150g, a month ago. Five gold exchange centres were also established in areas known for having large gold deposits.
Furthermore, MoMPNG recently issued a permit to the Ethio-Canada company, Harvest Plc for the extraction of gold and silver in western Tigray zone, in the northern part of Ethiopia, on 2.7sqkm of land with a cost of over 65.29 million dollars. Similarly, a Chinese Company, Nankay Mining PLC, was licensed three months ago to extract alluvial gold in the Gambela regional state.
Acknowledging the importance of the growth in mining projects in the economy, Worash Getaneh, an expert in gold production, believes the government should carefully follow such companies.
“Some of the developers tend to forget their social responsibility, such as building schools and creating jobs for the locality while making a profit,” he said. “Such a move will finally be problematic for the companies and the government
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