Midroc Gold, one of Sheik Mohammed Hussein Ali Al-Amoudi's many investments in Ethiopia, has announced that it hopes to generate 564 million dollars from the new gold mine.
The Sakaro Mine, located in Oromia Regional State, is the second gold mine operated by Midroc Gold, which started operation back in 1998 after acquiring Legedembi open gold mine pit and its processing plant through a privatisation deal at a cost of 172 million dollars.
Since then it has been intensively searching for more accessible gold deposits, according to Arega Yirdaw (PhD), general manager of the company.
The Sakaro Mine exploration and feasibility studies undertaken since 2004 have revealed 20.4 tonnes of gold. At a price of 1000 dollars per ounce, the mine will generate 564 million birr dollars revenues and 189 million birr net profit.
The revenues are also expected to generate a total of 130 million birr in tax and royalty payments to the national treasury and an increase in the workforce of about 10 percent from the current 1, 400 employees until 2021.
After signing a deal with Dr. Arega that authorises the company's production of gold it has mined, Alemayehu Tegenu, the Minister of Mines and Energy (MoME) last Tuesday at Sheraton Addis said the revenues from the mine sector, particularly from gold exports, has been growing and he expects Midroc to further boost them.
According to the minister, last year the nation pocketed 105 million birr from gold exports and in the first quarter of this year it received 50 million dollars. The budget year's overall performance is projected to be around 150 million birr, nearly a 50 percent increase from the previous year.
According to official estimations, the nation is endowed with 500 tonnes of gold reserves. Including two firms that recently announced the discovery of 40 tonnes of gold, estimated to be worth 1.7 billion dollars, 44 companies have been searching for the reserves, but so far only Midroc Gold is actually producing.
"It is not due to the lack of incentive or lack of exploration, the challenge has been to go to actual production after the exploration," Alemayehu said last Tuesday, emphasising that that the use of traditional methods of gold production have been a factor.
According to the minister, four to 10 kilos of gold is being bought by the national bank every day from the traditional producers and is being exported oversees to earn increasing revenues. He added that more corporate mines are expected to be launched shortly.
"It is because others are not coming," Dr. Arega of Midroc Gold said, "both local and foreign companies were not coming. When
we first started working we had 34 foreign nationals and now we only have just two, so we are making the investment Ethiopiansed while pioneering the investment."
Midroc Gold during the first ten years of its operation produced 34,000 kg of gold and 10, 000 kg of silver and earned 466 million dollars in revenues.
With global prices for gold shooting up to over 1,113 dollars per ounce this week, the new gold mine, which stretches over 9.7 square kilometres, could well generate even larger sales for the sole corporation in the sector.