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Ethiopian Earnings from Gold Dwindles to Just $32M, a Record Low

By Staff Reporter

Gold-EthiopiaOctober 10, 2019 (Ezega.com) -- Ethiopia has reported declining revenue from export of gold over the years, the latest being a record low of just $32 million this year, the country’s Ministry of Mines and Petroleum has disclosed.

In a presser he gave on Thursday October 10, 2019, an advisor to the Ministry of Mines and Petroleum, Tewoldeberhan Abay, said the country’s earnings from the export of gold have dwindled over time from $445 million in 2014 to $32 million this year.

The advisor attributed the devastating earning from the resources to ever increasing contraband trade being carried out at gold extraction sites.

The absence of gold buyers at nearby places to the extraction sites and the high involvement of ever-increasing brokers in the business has badly affected the earnings from the precious metal, Tewoldeberhan said.

Gold is Ethiopia's main mineral export and has been mined since ancient times, primarily as alluvial or free gold. The country’s single large-scale gold mine, Lega Dembi, in the southern area of the country, which was owned by Midroc, was closed last year after public protest against the company.

Traditional miners travel up to 500km to sell their gold due to absence of transaction centers near to the mining areas sites, the advisor said.

To boost revenue from the mining sector, the national bank of Ethiopia in collaboration with the recently established customs commission is building gold transaction centers near the sites, Betru Haile, Market Development and Network Director of the Ministry said.

The government is also in the process of revising mining proclamations, allowing businesses more incentives that include security of tenure, the right to sell minerals, preferential duty and tax provisions on equipment and machinery. It is also working to introduce a new mineral transaction law to deter illegal actors in the sector.

The government will also be deploying more federal and regional police to arrest the contraband trade. It vowed to give bonus to individuals who provide tips to police while witnessing illegal gold transactions.  

In addition to gold, Ethiopia has reserves of platinum, copper, potash, natural gas and hydropower. However, the mineral industry is not a significant sector of the economy, contributing less than 1 % to GDP. On a global scale, Ethiopia is a significant producer of tantalum, producing 10% of the world's supply in 2017. Other key minerals produced in Ethiopia include niobium, platinum, tantalite, cement, salt and gypsum, clay and shale, and soda ash.

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