The Ministry of Mines calls upon Afar and Oromia regions and the Addis Ababa city administration to sell old Ethio Djibouti railway metals for provision of input to metal factories following the Finance Ministry’s decision to vend of scrap metals, used vehicles and machineries to steel producers through legal channel.
The Mine’s Ministry announced that government through the Ethiopian Investment Holding is working on profitable options either to merge metal factories in the country or to support them as they are now.
“Factories are working on only 17-19 percent of their capacity. There are many reasons for this, one of which is the shortage of input to which this scheme will help us to provide input. The inputs gathered can sustain the metal industry for up to 2 years and once collected they will be distributed to factories based on their production capacity,” said Takele Uma, Mines Minister during a joint press conference with the federal Public Procurement and Property Authority.
“The metal industry is huge. Factories which we have in our country are lagging behind in their production, capacity and also technology. Unless the government takes on the initiative to lead the industry it is difficult to develop the sector,” emphasized Takele, adding, “Based on the decision made by the Prime Minister, the Ethiopian Investment Holding is conducting assessment of cooperation with the factories and also international consultant.”
Takele’s Ministry has also called on governmental and private institutions for vending of scrap metals, used vehicles and machineries to steel producers through a legal channel.
Government Universities, Ethio telecom, Addis Ababa city administration are said to be examples of those storing scrap metals, used vehicles and machineries including the Ethio-Djibouti railway.
“We are working with the two regions and Addis Ababa city administration to pass the metal/the railway bases on their territory,” said Takele to Capital indicating that it has been six months since this has been started, “It will help factories to get input.”
Ethio-Djibouti railway, a 784 km gauge railway that connected Addis Ababa to the port city of Djibouti, presents a huge resourceful input in scrap metal.
The two agencies called for selling of scrap metals, aging vehicles and machines from private, governmental entities including universities, regions and city administrations to be sold out through a legal way though the Ministry.
Last month, the Ministry of Finance in a circular ordered the direct provision of scrap metal to industries based on allocations from the Ministry of Mines. The Ministry of Mines and the Ministry of Finance as well as the Government Procurement and Property Authority and regional offices in the regions will monitor the implementation of the decision in a hierarchical manner.
In their joint presser, the two institutions announced that the country spends over USD 1 billion in a year to purchase metals whereas local steel industries are underperforming which basically stems from shortage of inputs.
Ethiopia imported 2.5 billion dollars worth of metals and steel inputs in the last two years.
“The temporary measure taken by the government to solve shortage of inputs is legal vending of scrap metals from various entities. The decision is of national significance which will help to control the inflation in the industrial and construction sector which will solve the shortage of resources for the steel producers apart from removing scrap metal,” Takele elaborated.
He said that a task force has been established to oversee and take measures on those institutions, which failed to obey what he dubbed as a “national call”.
Haji Ibsa, Director General of the Public Procurement and Property Authority on his part said that, “Vehicles, machinery and scrap metals, which have been imported under very scare foreign currency have been seen disposed everywhere in addition to them polluting the environment.”
“In a circular signed by Ahmed Shide, Minister of Finance, 160 governmental agencies and 36 developmental enterprises were ordered to sell used vehicles and scrap metals to steel manufacturers,” he said.
He further unveiled that the Authority registered 2700 vehicles owned by governmental agencies, which are out of service, indicating price rate has been set to sell these properties.
Accordingly, a kg of steel scrap will be sold at a price of 64 Birr, scrap vehicle/machinery 51.75 Birr, and used vehicle parts at 51.25 Birr.
There are entities having significant number of properties to be sold out.
Takele explained that the former Metal and Engineering Corporation (METEC), which changed its name to National Industrial Engineering Corporation, accumulated 500 million tons of scrap and used vehicles.
He stressed that, “If we allocate these scrap metals and used vehicles properly to industries we can cover two years demands of steel manufacturers, and a cost of 2.5 million dollars can be saved”.
With a plan to ease the problems in the steel industry, Takele said, “The Ministry is commissioning a survey on the development of steel.”
He further said that his Ministry and Ministry of Justice are jointly crafting a directive on importing steel industries.