3,000 tons of gold get smuggled out of Ethiopia every year

Nov 14, 2006 (LONDON) — Over 3,000 metric tons of gold get smuggled out of Ethiopia every year, State Minister of Mines and Energy Sinknesh Ejigu said Tuesday.

Addressing traditional, or artisan, gold miners at Mizan Teferi town, Ejigu said traditionally extracted gold and precious metals have been smuggled out of the country through neighboring countries.

"Some individuals have been inflicting severe damages on the natural resources of the nation through extracting gold illegally in areas which are secluded by the government," said Ejigu.

Ejigu said traditional extraction of gold and other precious metals by local people results in excess wastage of natural resources, adding the government has plans to provide training to traditional gold miners to curb the problem.

She said the ministry has designed and put into force a strategic plan since 1997 with a view to updating traditional gold mining and trading.

The ministry has already provided licenses to organized traditional gold miners living in Adola Shakiso Woreda of the Oromia State, she said, adding the miners supplied between 500 and 800 kilograms of gold to the National Bank of Ethiopia until September 2006.

Geological studies have identified a favorable geological environment hosting a wide variety of mineral resources in Ethiopia.

The Ethiopian Investment Authority estimates initial explorations have confirmed the existence of deposits of gold, platinum, tantalite, soda ash and phosphate rock. Petroleum and other metallic, industrial and chemical minerals have also been identified.

Despite these discoveries, mineral development remains limited, contributing only 1% to the national economy.

Meanwhile the Ministry of Mines and Energy has signed an oil exploration agreement with Lundin East Africa, a division of Lundin Petroleum AB (LUPE.SK). The deal allows the Sweden-based oil company to explore and develop petroleum in the Somali Region of the Ogaden Basin.

The contract that entails exploration in Blocks 2 and 6 covers over 24,000 square kilometers west of the Calub and Hilala oil and gas discoveries.

The contract was signed by the Minister of Mines and Energy Alemayehu Tegenu and the Chairman and the General Manager of Lundin, Ian Lundin and James Philips.

(Dow Jones)