MIDROC Seeks Additional Year at Lege Dembi


MIDROC Gold asked for the extension a year earlier to the 20-year concession expiry




MIDROC Gold Mine Plc, one of the 21 subsidiaries of Midroc Ethiopia Technologies Group, has requested the Ministry of Mines, Petroleum & Natural Gas (MoMPNG) for an extension of a contract to continue extracting gold in Lege Dembi, Oromia Regional State.

The Company has requested the extension before the 20-year concession expires in 2018, according to a senior manager at the Company.

The Ministry is reviewing the request, confirmed Motuma Mekassa, minister of MoMPNG, to Fortune. Since two weeks ago, the case has been pending on the desk of Tewodros Gebregziabher, state minister of MoMPNG, responsible for mineral licensing and administration, according to a source close to the case.

MIDROC Gold was established in the late 1990s by Sheik Mohammed Al-Amoudi and his wife Sofia Salah Al-Amoudi together contributing 98pc of the share, and the government owning a two percent share through the then Ministry of Finance & Economic Development (MoFED).

The Company took a 20-year concession with the licence name ‘Midroc Lege Dembi Gold Mining’ from the government for 172 million dollars when privatised in 1997, and commenced production in August 1998.

During the first ten years, MIDROC Gold extracted 34,000kg of gold from the site, earning close to half a billion dollars.

The largest gold producer in the country, Lega Dembi deposit is located 500km south-west of Addis Abeba in Guji Zone Oromia Regional State.

Lega Dembi open pit mine has an average annual production of 4.5tn of gold, according to MIDROC Group’s website.

MIDROC Gold is actively involved in mining gold while being engaged in gold deposit exploration.

In 2009, it signed a 10-year agreement with the then Ministry of Mines & Energy (MoME) for the extraction of 20,483kg of gold from the Sakaro area, three kilometres from Lega Dembi gold belt.

Six years later, MIDROC Gold announced an expansion of a 15-year project to extract 34tn of gold in Benishangul Gumuz Regional State with an investment of 4.2 billion Br, expecting 27 billion Br in revenues.

Ethiopia produces eight tonnes of gold and earns over 350 million dollars from gold export annually, through the modern and traditional mechanisms of extraction, contributing 12.5pc to the total export proceeds in the past year alone. Benishangul Gumuz region and the northern parts of Ethiopia are known to be major gold enriched areas.

There are around 100 companies involved in the gold exploration sub-sector in Ethiopia. However, MIDROC Gold has been dominating the gold extraction business for long.

Recently, KEFI Minerals and Ezana Mining were also granted large-scale gold mining licenses from the Ministry.

Although the export of gold in the country in general and that of MIDROC’s, in particular, has shown a slump in the past two years, the management of the Company remains optimistic for the extension of the concession that would let the Company extract more gold.



By FASIKA TADESSE
FORTUNE STAFF WRITER

Published on Jun 25,2017 [ Vol 18 ,No 896]


SHARE :
               


Editorial

With a reformist administration in charge of the executive, there has b...


Agenda

The new electricity tariffs that became effective on December 1, 2018,...


Fineline

Who it is that midwifed the rapprochement between E...


Commentary

Ethiopia’s economy is at a crossroads. The same old advice will not s...


Viewpoint

A recent photo between Prime Minister Abiy Ahmed (PhD) and George Soros...


Opinion

The future is bleak. Millennials and younger generations who will inher...


View From Arada

There is heated debate on the propriety, decency and morality of breast...




Business Indicators




ADVERTISEMENT



Editors Pick















//