Sunday, June 16, 2024

NBE receiving paltry gold deposits


Widespread contraband trade, political instability in gold mining regions, and a need for a better system to stop corruption are being blamed for a decreasing amount of gold going into the National Bank of Ethiopia’s reserve (NBE).
NBE, which has branches in Gold Mining regions, now receives less than 50 grams of gold per day. That amount was 10 to 25 KG a year ago. The bank also received less than USD 90 million in the last fiscal year but some years ago that figure was USD 600 million.
The Bank’s gold buying branches in Shire, Dema, Gambela, Mizan Tepi, Pawi, Assosa, Hawassa, and Shakiso sometimes go two or three days a week without a transaction.
The sector currently is led by traditional miners. Major companies including MIDROC have stopped extracting gold because of political instability in the areas they are operating.
The gold was extracted and explored by 170 small companies. They were PLC licensed and around 50 percent of these firms are foreign companies, while 25 percent of them are joint ventures between local and foreign businesses and the remaining are local enterprises.
According to Ministry of Mines and Energy illegal gold trading helps some businesspeople move their money out of the country and some government employees are also collaborating with these illegal actors.
Sudan, Kenya, Djibouti and Somalia are the destinations for the gold which illegally passes the country’s borders.
The Ministry is worried about the problem. They wrote a letter to the PM to host a meeting and discuss the matter with gold and petroleum stakeholders.
The Ministry’s Head of Communications, Micheal Mengesha, said “we can’t continue like this, the oil and gold market is in big trouble. As a ministry we are restructuring our office to add more workers to fill our deficit, but the discussion with the PM is very necessary to go further.’’
“The security system should be tightened to protect miners in the mining areas, big companies should return to their work and the black market must be controlled soon; we must work together’’ he added.
A source at the National Bank told Capital that the Ministry should add more workers in the mining areas to control the system.
“The ministry and the regions are very reluctant to assign the right staff in the mining areas but if you don’t have enough resources, you can’t stop crime’’ the source added.
Over 1.5 million artisanal miners are working in the country.
The gold collected from artisanal miners is processed by NBE and then sent to Switzerland for refining to be sold on the global market.

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