Ethiopia introduces new policies in bid to woo mining investors COMMENT PRINT EMAIL |
By: Njiraini Muchira 26th November 2010 TEXT SIZE The Ethiopian government has introduced new policies aimed at spurring investments in mining and increasing the sector’s contribution to the national fiscus.
A top government official says that the country has identified development of the mining sector as one of its leading economic aims, with a target of ensuring that the sector ?accounts for 10% of gross domestic product in the next five years.
The Horn of Africa nation, led by Prime Minister Meles Zenawi, expects the new ?investor-friendly policies to be a catalyst for attracting foreign direct investment.
The Ethiopian government is aiming to grant about 50 mineral exploration licences ?yearly.
It also believes that this will result in earnings from the mining sector increasing to $1-billion from the $400-million that the sector currently rakes in each year.
“Mining operations are expected to be an important economic catalyst for our ?export-orientated development strategy,” says Gebre Egziabher Mekonen, who heads up the mine operations department at the Ministry of Mines.
The mining sector is Ethiopia’s second-largest foreign exchange earner after the ?agriculture sector.
Ethiopia is endowed with huge deposits ?of minerals, ranging from gold, platinum, ?silver, copper, tantalite, soda ash and phosphate rock.
A total of 80 international and local firms have been granted prospecting, exploration and mining licences for 160 projects. ?The foreign companies are from the US, Canada, China, Norway and South Africa, besides others.
The new policies provide for incentives like low royalty payment levels, exemption from customs duty and taxes on equipment for mining operations.
Mekonen says that accumulated investment in the mining industry has surged from less than $100-million in 2003 to $1,3-billion this year.
Ethiopia’s mining sector was opened up to private investors in 1991.
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