Ethiopia seeking mineral investment

After 17 years of socialist rule and an ensuing civil war, the transitional government of Ethiopia is instituting a number of policies aimed at improving the political, social and economic sectors of the country. One of the most important new policies will permit private investment in the mining sector.

Hoping to establish strong links with the Canadian mining establishment, a delegation of Ethiopian government officials, led by Mines Minister Izaddin Ali, recently came to Toronto to meet with mineral industry representatives. The meeting, part of a mineral investment promotion project funded by the United Nations Development Programme, was organized by Techno-Economic Consulting, a New York-based group responsible for a recent compilation of Ethiopian mining investment opportunities.

Presentations focused mainly on the country’s economic and political climate, geological setting and mineral investment opportunities, particularly for gold.

The geology of Ethiopia is characterized by a broad diversity of rock types. Most of the country is covered by Tertiary volcanics and marine and non-marine sedimentary rocks. Locally, Archean and Proterozoic-aged rocks are exposed in the south-central, northern and western regions of the country. Gold has been produced in Ethiopia since ancient times, from both alluvial and (to a lesser extent) primary deposits. At present, gold placers are widely mined by artisanal methods and, in some areas, by semi-mechanized operations. At present, more than 3,000 kg (96,450 oz.) of gold are produced per year.

Gold occurs in two principal environments: Late Proterozoic greenstone belts and associated intrusions, and placer gold deposits.

One region has seen more exploration and exploitation for gold than any other — the Adola Greenstone region. Situated some 350 km south of Addis Ababa, the Adola area hosts the Lega Dembi mine, Ethiopia’s first major primary gold producer.

The mine is worked by open-pit methods, but deeper gold potential is being explored by drilling and an underground mine is planned. Ore grades at the mine average about 4.5 grams per tonne (0.13 oz.) and total gold reserves in three zones are estimated at 62 tonnes (1.9 million oz.).

Other promising gold showings or deposits occur in the Adola, Arero, Moyale, Western, Akobo, and Tigray Greenstone regions. Based on government exploration programs, potential gold reserves in the country are estimated to be in excess of 500 tonnes (16 million oz.).

There are currently two other major mining operations in Ethiopia: a tantalum-niobium mine and a soda ash plant. The country also offers good potential for nickel, platinum, base metals and potash.

Additional information on Ethiopia can be found in a 2-volume prospectus which is available from Techno-Economic Consulting, Park Avenue Atrium, 237 Park Ave., 21st Floor, New York, NY 10017-3148, for US$125.