Proposed Mining Amendment Favours MSEs Instead of Co-ops

Cooperative unions will no longer be allowed to take part in artisanal mining and will instead be replaced by micro & small enterprises (MSEs). This is according to proposed amendments to the Mining Operations Proclamation of 2010, which were discussed in Parliament on Tuesday, November 19, 2013.

Currently, individuals and those clustered around cooperative unions are issued licenses to engage in artisanal mining, and cooperative unions are able to reserve such areas as “claim areas” and obtain exclusive claim licenses.

This, however, was not always acceptable for regional states, which feared that the cooperatives would use the claims to continue holding the areas indefinitely, according to Getachew Bedane, deputy chief government whip at Parliament. This resulted in them failing to approve the claims, leading to endless disputes.

The unlimited duration of cooperatives unions, which has led them to reapply for mining licenses after the termination of their contracts, was what prompted the amendment, he added.

Regional bureaus have complained that the nine-year time limit of mining licenses has created the mistaken view that artisans organised under cooperatives are the owners of the site along with the minerals. Thus, the amendment also proposes reducing the validity of artisanal mining licenses to a maximum of two years with no renewals, as opposed to the current legislation that allows licenses to be renewed twice for three years at a time.

“Mines are perishable products,” Getachew argued at Parliament, where 300 of the 547 MPs convened. “Thus, the government needs to make sure that successive groups use it so that the job opportunity is availed to more people.”

The replacement of cooperative unions is part of the numerous amendments currently proposed in order to promote the sustainable development of mineral resources. These include reducing the government’s royalty cut from the sale of gemstones from eight percent to seven percent and obliging companies with mining licenses in Ethiopia to reveal the revenues gained from the sale of minerals.

A license for artisan mining, which the 2010 proclamation defines as being manual in nature, and one that does not require the hiring of additional staff for production, is usually given to unemployed youths so they can raise enough capital to start small businesses.

Artisanal miners have so far been organised as cooperatives with a minimum of 10 members, according to the proclamation, and administered themselves through their own work planning programmes. They can request a mining license from regional mining bureaus or agencies and are given anywhere between 5,000sqm to 10,000sqm of land. The cooperatives can borrow money from micro finance institutions (MFIs).

Currently, a total of 75,000 to 100,000 miners have been organised into cooperatives and 50,000 as SMEs.  The lack of basic infrastructure, presence of HIV/AIDS and malaria and the scarcity of drinking and working water, are some of the challenges they face, according to an artisan and small scale mining development package prepared by the Ministry of Mines (MoM).

Nonetheless, artisan mining plays an important role in gold and gemstone production in the country. By the end of the current fiscal year, 18,000kg of gold, worth 700 million dollars, is expected to be produced by artisan miners. This is in addition to 15,000kg of rough gemstones, worth five million dollars.

This significant role that artisan mining has in the country’s economy was raised by MPs, who expressed concern that the amendment was too restrictive.

“We need cooperatives,” said Gebre Dagnew, an Amhara National Democratic Movement (ANDM) MP from Tach Armacheho constituency in North Gonder Zone. “If this amendment is going to be approved as it is, then it will rob cooperative unions of a just and profitable artisanal mining sector they need.”

It would be better to create a legal framework whereby both unions and MSEs are granted artisanal mining licenses, he and others argued. In addition, limiting the time of operation for cooperative unions would make the system more equitable. This, according to them, would broaden the scope of participation and extend job opportunities to more people.

Others stated that banning the unions was tantamount to neglecting their contribution to foreign currency earning.

“How can we do away with the backbone of the industry?” said Dawit Teferra, another MP from ANDM representing the Delanta constituency in North Wollo Zone.

The proposed reduction of the government’s royalty cut from the sale of gemstones, and the new requirement for companies with mining licenses to disclose revenues generated through the sale of minerals were also discussed by MPs.

“I’m not sure if this will satisfy miners,” Dawit said.

These comments from MPs as well as the draft document will now be forwarded to the Natural Resource & Environmental Protection Affairs Standing Committee, which will review the draft amendment before approval.






Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.