KEFI Minerals Limited of British set to start production of close to 28.8 tons of gold and silver in the coming 11 years. The company and Ethiopian Ministry of Mines signed a large scale gold and silver production agreement last night in Addis Ababa, Ethiopia.
The company will start production in Ganji Zone, Tulu Kappi area of Oromia Region of Ethiopia, according to Harry Anagnostaras – Adams, non- executive chairman of KEFI Minerals Ethiopia Limited.
“It will take real determination and responsibility from our side and we will do it,” said Mr. Adams said after signing the agreement.
He noted that six months is needed to access the around $152 million total financing from the banks specialized in mining. “…Through Miyota Minerals and our shareholders we are more confident and raise the capital required. We reduced the amount of capital from our initial Tulu Kappi project and also reduced the number of households to be resettled from 460 to 260 households by redesigning the area,” he said.
“We have involved Ethiopian experts in designing to create new livelihood. Whatever the compensation is required we will pay,” Mr. Adams added.
From Golden Prospect to Nyota and KEFI, the Tulu Kappi gold exploration went through different companies since 2005 with a total investment of $42 million, according to Dr. Kebede Belete, KEFI Minerals Country manager for Ethiopia.
Before KEFI has taken over Tulu Kappi’s project in Ethiopia 18 months ago and has been in similar mining project in Saudi Arabia for the past seven years.
“The agreement we signed will create jobs for 700 people and generates $1.06 billion foreign currency for the country in eleven years with additional $130 million income for government. They will also train our people and we also agreed that they will protect the environment. It will be a good model for other mining companies and open doors for others,” said Tolossa Shaggi Minister of Mines of Ethiopia.
“We hope that other companies will follow KEFI’s suit and engaged in development of Ethiopia’s minerals,” he said indicating that in the coming two years his ministry expects at least a minimum of three companies engaged in gold exploration to acquire production license.
From 15-20 years we plan to continue production from 15 to 20 years,” Dr. Kebede said indicating the initial production area is 7 square kilometers.
Mr. Adams on his part noted that the overall gold reserve potential is unknown. “What we know is what already identified … Sometimes one has to go underground to estimate the additional. Our ambition is to be an example. The minister encouraged us to do further,” Mr. Adams added.
Ethiopia has been earning up to $500 million annually from its mineral exports. Out of this, gold covers the major share. So far MIDROC Gold Company of the Saudi- Ethiopian tycoon was the only one engaged in large scale gold production in Ethiopia with 5 tons per annum. The rest around 7 to 8 tons per annum is produced by thousands of artisan (traditionally) gold producers.
[NewBusinessEthiopia]