The Ethiopian government, along with private sector partners, is taking steps to tap the country’s vast underground resources. Ethiopian Minister of Mines, Petroleum and Natural Gas Tolossa Shagi staed that the government is stepping up efforts to support the mining industry.
The minister pointed out that revenue from mining had not met its goal, as defined by the government’s economic plan for 2014. Ethiopia had planned to secure mining revenue of $646 million during 2014/15 but only earned about half of that, $363 million, according to government statistics.
“There is hope that Ethiopia will become a country in the short term whose extractive industry will contribute significantly to GDP,” the minister said in an interview, “Within a period of two years, Ethiopia will start natural gas production from its Kalub and Lala areas in the Somali regional state where 7.4 trillion cubic feet of natural gas is being developed for domestic use and for export via Djibouti; currently eight exploration companies including from China and Russia are engaging in exploration and development of natural gas throughout the country,” he said.
The Midroc Group, a company owned by the Saudi businessman Al-Amoudi, is developing gold in Southern Ethiopia. The miner Alana Potash, acquired by Israel Chemicals in March 2015, is working on the massive deposits of potash in northeastern Ethiopia. Russian company GBP Global Resources, which was granted a concession in 2014, is currently exploring natural gas and oil reserves along the Ethiopian Rift valley area. Revenue will be shared between the company and the government if reserves are found. The government is also financing a public-private partnership project with the Chinese mining firm GCL; GCL will also build the pipeline to Djibouti.
Ethiopia is developing its gem stone industry. According to the minister, small-scale traditional miners and middle men are earning about $25 million annually from gem stones that are to be found in abundance in many areas in the country.
According to Yalew Bekele, a geological survey consultant, only 350,000 sq km (135,135 sq mi) in total have been studied using seismic techniques for reserves. Ethiopia covers a total of 1,100,000 sq km (420,000 sq mi).
Ethiopia has vast untapped resources of gold, potash, zinc, gemstones and tantalum, experts say.