Mining policy mandates value addition


The Ministry of Mines and Petroleum has drafted a mining policy that will last for the next twenty years. The current policy draft pays due attention to value addition. It also uses all available mines as an input for the growing construction, industrial and agricultural sector. Mining companies are expected to partially add value to exporting, to increase the share of the mining sector to the country’s economy.
The fiscal and the legal framework adopted by Ethiopia’s government allows a free market driven economy, which permits both local and foreign-based companies to participate in developing the country’s mining industry. However, they must operate in a transparent manner that helps boost the country’s economic outlook.
The policy states that if mining policy is unclear it will damage the sector and minimize mining’s role in the economy. The objective of the policy is to enable the sector to contribute to the agricultural sector by providing necessary inputs like fertilizers to modernize the sector.
The policy also stresses prioritizing mines so they can be used as an input for local industry to grow and replace imported construction materials.
The policies also address the 1.2 million traditional miners. Organizing traditional miners and providing trainings on proper mining skills will also be important to fight illegal miners and contraband. The policy is set to use modern technology in the sector so as to be competitive in the world market.
Presently, mining contributes only 1 percent of Ethiopia’s GDP. Gold, industrial minerals and gemstones make the bulk of the mining commodities the country exports. Tantalum is also proving to be profitable.
In the late 80s, the mining industry lacked significance because it contributed a mere 0.2 percent of the country’s GDP. Gold is key in the sector. In 2001, it contributed 5 million USD but by the year 2012, this sum increased to 602 million USD. However currently it declined sharply to less than USD 50 million.