Mineral Policy and Status of Mineral Investment in Ethiopia

Mineral Policy and Status of
Mineral Investment In Ethiopia

Presented by
Dawit Mamo Abera, Director of Mineral Exploration &
Resource Evaluation Directorate, GSE
Special Forum 2: Forum of Mining Investment in
Ethiopia
at China Mining Conference 2016
Sep.24,2016
Tianjin, China
Outline of Presentation
1. Introduction
2. Mineral Policy
3. Status of Mineral Investment
4. Investment opportunity
1. Introduction
 Mining has long history in Ethiopia
 The production of gold in traditional way as old as
3000 years
 Currently Ethiopia is exporting minerals such as
gold, Tantalum, Gemstones, dimension stones
 The Mineral sector is the second foreign currency
earner next to coffee
 It has also created job opportunity; the artisanal
mining sector has created a job for nearly 1 million
citizens
2. Mining Policy in Ethiopia
 The Mining policy of Ethiopia had different
structure historically
 The involvement of the private sector was limited
for long time especially between 1975-1991
 Most mineral operations were limited to
government
 The private investment in the mineral sector was
limited to construction minerals like sand and
quarrying
 Only oil and gas exploration were open to foreign
firms or JV with government
Since 1991;
 The government of Ethiopia adopted a free market
economic policy that;
 recognizes the active participation & role of the
private investment as an engine in the development
of the country
 Limited the government participation to regulation
 Recognizes the government engagement on the
development of infrastructure & provision of basic
geo-science data
 Allows government involvement in areas where the
participation of private sector is insignificant
 Accordinly, various proclamations were enacted to
attract investment, issue & regulate licenses & to
bring sustainable development of the mineral
industry ;
 Mining proclamations for Hard Minerals:
 Mining proc.no.678/2010 (as amended)
 Mining Income Tax No.53/1993 (as amended)
 Mining Regulation no.182/1994 (as amended)
 Mining Proclamations for petroleum operations
 Petroleum Operations Proc.no.295/1986
 Petroleum operations income tax
no.296/1986
Main features and issues addressed in the
proclamations include;
 Encourage private investment & guarantee the
rights of investors
 Invite private investment in all kinds of minerals
 Guarantee the licensees right to sell the minerals
produced locally or abroad
 Restrict the role of government to regulate,
generate and disseminate/promote basic geo-
science data
 Require environmental friendly operations
 25% Income Tax after allowable deductions of
expenditures
Mining Policy…
Guarantee the opening & operation of foreign
currency account in Ethiopia
Retention of portion of foreign earnings &
remittance of profits, dividends
Royalty varies from 2 to 7 & ad valorem on
production site and 5% free government equity
Generous deduction and calculation of permitted
expenditures
Permits 10 years loss carry forward
Exemption from customs duties and taxes on
equipment, machinery and vehicles necessary for
operations
Institutional Framework
There are 3 public institutions with different mandates:
Regional States Mines, water and Energy Bureaus:
 Issue & regulate artisanal mining licenses for nationals
 Issue and regulate for domestic investors:
 reconnaissance, Exploration and retention licensees with
respect to construction and industrial minerals,
 small scale mining licenses for industrial minerals,
 Small & large scale mining licenses for construction minerals
Ministry of Mines, Petroleum and Natural Gas:
 Issue reconnaissance, exploration, retention and mining
license other than those to be issued by the states,
Geological Survey of Ethiopia:
 generate, disseminate/promote and promote geoscience
data
Types of licenses for Hard Minerals
Status of Mineral Investment
 Currently the licenses given by the Ministry of

Mines, Petroleum and Natural Gas are;
 140 exploration
 80 mining
Investment Opportunity
Potential investors are welcome:
•To explore for gold and related base metals mainly in the
potential areas of northern, western and southern greenstone
belts of Ethiopia in unoccupied areas by the other
companies;
•To explore for Tantalum to explore for tantalum in the
pegmatite bearing Precambrian basement rocks in the
vicinity of the active tantalite mine areas in the southern
greenstone belt or elsewhere.
•To assess for iron and phosphate occurrences in the
mafic and ultramafic intrusions in the vicinity of Bikilal
and Melka Arba igneous iron (Fe) and phosphate
deposits in the west and southern greenstone belts or
elsewhere,
 To explore for platinum group elements (PGE) in the
ultramafic rocks of the Western Greenstone Belt in the vicinity
of the Yubdo platinum deposit or elsewhere;
 To explore epithermal gold and associated metals in or

near areas of Tertiary volcanism,
 To carry out advanced exploration and development
in joint venture with the already licensed local and/ or
foreign companies,

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 To explore epithermal gold and associated metals in or

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