Please comment on the current policy related to the Ministry of Mines. What are the main priorities of the government in order to develop the sector in the coming five years?

The mining sector in Ethiopia was operated solely by the government during the years between 1973 and 1990 in terms of exploration, exploitation and production. However, in 1991, Ethiopia embarked on a democratisation process, which brought about the demise of the totalitarian military communist regime; pursued liberal economic policies; and introduced multi-party democracy in accordance with the principles of open market policy. This has contributed positively towards the overall development of the country's economy; and indeed that of the mining sector.

The Ethiopian Government in line with these policies, which have encouraged private investment to a large degree, has privatised the then only government-owned large scale Legedembi Gold Mine. Accordingly, the gold mine went into the hands of MIDROC Gold Share Company. It has a production capacity of 4 tons of gold, annually. Currently, the Kenticha Tantalite- a smaller scale mine- which has the capacity of producing 60 tons annually, is in the pipeline to be privatized. Likewise, the Ethiopian Government is seeking foreign direct investment into the Calub Gas Project and the oil-rich fields in the Eastern parts of the country as well as well as the bolcks of the Gambella Basin.

In order to augment the confidence of investors, we have signed a number of multilateral and bilateral agreements, which could guarantee investment in Ethiopia. For example, Ethiopia is a member of MIGA, the Multilateral Investment Guarantee Agency. As you might know, MIGA provides investment guarantees with a coverage that includes currency transfer, expropriation, war and civil disturbance as well as breach of contracts. Regarding bilateral agreements, we have signed a number of investment guarantee and protection agreements with different European countries, the United States and the Russian Federation. Ethiopia is in the list of countries eligible for loan and guarantees from the EXIMBANK of the United States. We are also a member of the Overseas Private Investment (OPIC), which has decided to provide investment insurance coverage for US entities, which invest in Ethiopia. I understand that " capital is a coward animal ", which does not like to be tampered with; and which does not thrive if the rules of the game are not fully respected.


Concretely, what are the first results of these new laws?

The results are quite interesting as far as this sector is concerned. I am quite sure there is still a long way to go. However, we have four prospecting licences with a capital of $100,000 (USD); eleven exploration licences with a capital of $10 million (USD); and other ten mining licences with a capital of $10 million (USD). As I have said, these figures are still quite low compared to what the potential of Ethiopia's mining sector holds at stake for investors.
Our mining laws have been amended in order to coup with the dynamism of this sector in such a way that could attract more investors and maximize the benefits they could make by investing in Ethiopia. The objective of these amendments was to further liberalize the sector by providing better incentives to potential investors. For instance, the tax rate has been cut down from 45% to 35% and the free equity interest of the government has also been reduced from 10% to only 2%. In fact, we have a number of incentives including low and negotiable royalty rate. There are exemptions for investors from customs duties and tax on equipment, machineries, vehicles and all necessary spare parts. Last but not least, loss could be carried forward for 10 years in oil, gas and other mineral production.


What are the main investors?

Usually, we have local investors and some foreign investors who come as joint ventures, but we are trying to attract more foreign direct investment into this sector. I think we have to make foreign investors understand that Ethiopia has a lot to offer in terms of a peaceful democratic system; with a sustainable, growing liberal economy; diversely cultured people with a trainable, disciplined workforce; and a working environment that is quite interesting to any investor that would come to Ethiopia.

Current the national statistics indicate that the mining sector contributes 3% to the GDP of the country. Our ultimate objective is to see this figures increase drastically. We know that we have to work hard in order to attract more and more investors.


Generally the energy and mining sectors have quite polluting activities. What are the main concerns of the government in order to protect the environment?

The Ethiopian Government is very serious about safeguarding and protecting the environment. Companies investing in the country are required to present an environmental impact study of their projects. Legally binding articles, which stipulate the protection of the environment, are part and parcel of the contracts, which we sign with our partners.

Thus, approval is granted subject to the applicant fulfilling the requirements of the environmental impact assessment. In fact, Proclamation No. 52/1993 requires all entities undertaking mining operations in Ethiopia to conduct their activities in such a manner as to ensure the health and safety of its agents, employees and local communities; and minimize damage or pollution of the environment.
Therefore, companies are committed through this legal instrument not to abuse the environment and the natural habitat. It is worth-mentioning that Ethiopia is the home of tens of internationally recognized endemic animals and plants. I should say that through our strict laws, the environmental issue is well taken care of.

What is to be developed in your country in terms of mines?

Gold and tantalum are abundant in the Southwestern parts of Ethiopia. There are occurrences of opal and other gemstones in the Central and Eastern parts of Ethiopia. Marble can be found in the South, East as well as North and Central parts of the country. Ethiopia is a rich country geologically speaking with immense potentials. Studies indicate that there are millions of tons of reserves of industrial minerals such as potassium and phosphorus. There is a huge potential of potassium, coal, oil, natural gas, salt, phosphorus, dolomite, quartz, silica sand (which could be used in the manufacturing of glass). We need investments that could develop all these reserves.

As for natural gas, there are immense reserves in the Ogaden Basin, in the eastern parts of the country, in an area half the size of Texas. The reserves of the Calub Gas are estimated at 2.7 trillion cubic feet (TCF). There are also other reserves in different basins in the country. Another important basin is the Gambela area, which covers 17,000 km2 in the Southwestern part of Ethiopia, and which is adjacent to the Sudan Gabra Rift of the White Nile. Studies indicate that the Gambela Basin has a potential of favorable reservoirs of source rocks, which are rich in oil. At the Abay River Basin (best known as the Blue Nile Basin), which extends to about 63,000 km2, there is the presence of potential sources of rocks and reserves, which indicate that it is also rich in petroleum. There are the Southern Rift Basin (about 15,000 km2) and the Mekele Basin in the North (8,000 km2), which have similar occurrences. All these are potential areas for petroleum and natural gas since Ethiopia is geologically and geophysically quite similar to the adjacent Arabian Peninsula, with countries such as Yemen, Saudi Arabia and all the other oil rich countries of the Middle East.


Could you give a brief overview of your professional experiences and career?

In fact, I am a new Minister to the Ministry of Mines. I have only served as a minister in the mining sector for about a year and a half. Before my assignment to this new portfolio, I used to be the Minister of Transport and Communications, which has become a defunct ministry due to the recent restructuring of the government's executive body. Accordingly, the former responsibilities of transport and communications have been shifted to fall under the newly formed Ministry of Infrastucture. Prior to that post, I have served as Ethiopia's Plenipotentiary Ambassador to the Republic of Zimbabwe (between 1996 and 1999). I have represented my country as an ambassador covering besides Zimbabwe, the other countries of the Southern African Region, such as Angola, Mozambique and Zambia.

I was educated in the Middle East, where I have graduated at the University of Damascus with a degree in literature. I have worked as a teacher, while I was a young refugee in neighbouring Somalia. Upon my return from abroad, however, I have worked as a journalist in my country; and served as the Head of the Information Bureau in the Somali Regional State, in eastern Ethiopia. My political involvement has given me the opportunity to be elected into the Constituent Assembly, which has contributed to the making of the Federal Constitution of Ethiopia. I was later elected also to the House of Peoples' Representatives as a parliamentarian. My hobbies include creative writing, reading and painting. I would be a novelist some time, in the future. I speak a number of languages such as English, French, Arabic and some five other Ethiopian local languages. I am married and have two daughters, Amina (6 years) and Imman (4 years). In fact I consider my wife, Naima Tahir as the backbone of my success in life.


What is your final message to the international business community and potential investors?

Ethiopia has a stable political system which is based on a multi-party democracy. It is an important country in the Horn of Africa Region as well the whole of the African continent for fostering peace and promoting democratic values. We have been active in the making of peace, and still remain to be so, in the Great Lakes Region and in neighbouring Somalia. Ethiopia's capital city, Addis Ababa is the seat of the newly formed African Union. It has also been the historic headquarters of the OAU. Therefore, Addis Ababa enjoys the largest diplomatic representation in Africa. Ethiopia is a country with a huge population of 64-65 million people and this renders it to be a potentially large market. Moreover, the country is close to the Middle Eastern and European markets. All these things put together; and of course the friendly and cultured people of Ethiopia with all their diverse history, are good reasons for investing in Ethiopia. I would like to call upon investors through eBizguides to invest in this vast country of diverse resources.