Addis Fortune (Addis Ababa)
Mahlet Mesfin
12 July 2011
Despite being in short supply of necessary mining materials, traditional miners have sold 6,615.2kg of gold, worth of 4.8 billion Br to the National Bank of Ethiopia (NBE), and meeting the government’s goals as set in the five year Growth and Transformation Plan (GTP) in the past 11 months.
Traditional gold mining involves washing the gold-containing-soil with running water and sorting out the gold through a gravity filtration mechanism.
Ministry of Mines’ (MoM) request for additional budgetary funding from the Ministry of Finance and Economic Development (MoFED) for the purchase of the materials was rejected, according to the performance report of MoM.
The government has set targets for major sectors expected to be reached at the end of the year in order to track the progress of the economy and monitor the effectiveness of the plan, according to the GTP document.
It is projected that traditional miners would sell 5,250kg of gold to the NBE in 2014/15, a projection of 1050kg of gold a year. However, the current performance has shown a 26pc increase from the targeted plan and 161pc increase from last year’s performance.
“The government gives arbitrary and conservative estimates on the sector without conducting research,” a geologist working in the sector told Fortune. The problem lies, he said, in the fact that the ministry only knows the potential areas for gold mining, based on outdated geological surveys conducted many years ago.
MoM has revised its annual plan in March 2011, since the target has already been achieved within six months of this fiscal year.
During the first six months of the fiscal year, MoM has sold 3,942.2kg of gold to the NBE while it had planned to sell 2,703.3kg every year, prompting the ministry to revise its plan in March 2011.
The rise in the international price of gold has prompted many individuals engage in the mining processes, Tamrat Mojo, head of the Traditional Mines, Manufacturing and Transactions department of MoM, told Fortune.
“Many farmers in Benishangul-Gumuz, located 40km from the Sudanese border, are engaged in gold mining since it generates more income,” the expert agreed.
To date, more than half a million individuals are involved in traditional gold mining in the six regions, according to Tamrat.
The global average price of an ounce of gold stood at 1,478.38 dollars in 2011 has reached 1,510.90 dollars while it stood at 1,496 dollars on Friday, July 8, 2011. However, it has shown a slight reduction of 2.6pc from May 2011.
For the past two years, the NBE has been adding five per cent to the international market price when buying gold from the miners in order to discourage sales on the black market.
Oromia, Tigray and Benishangul-Gumuz regional states are the top three gold producing regions, with 2,229.8kg, 1,750kg and 1,314.4kg, respectively. The Gambella, Southern and Amhara regional states also produce 1,320.8kg of gold.
There are around 1,759 traditional miners organised in 53 associations, of which 227 are females.
Gold is Ethiopia’s third largest export commodity, next to coffee and oilseeds. A total of 281 million dollars worth of gold was exported last year Switzerland purchased 211.2 million dollars worth of gold, while South Africa purchased 70.2 million dollars, according to research conducted by Access Capital.
The government has a plan to increase its gold exports from 3,907kg in 2009/10 to 8,700kg in the next five years, projecting an increase by 122pc.
Aside from gold, the traditional miners also produced 14,008.3kg of precious stones worth 75 million Br showing a 350pc rise compared to the same period last year.
AllAfrica – All the Time
Taken from:
Ethiopia: Traditional Miners Exceed GTP Targets