MINING IN AFRICA SPECIAL — Ethiopia encourages foreign

In the summer of 1991, when Ethiopia’s transitional government took office, the country’s economy was in a state of crisis caused by protracted civil war, recurrent drought and the socialist economic policies of previous governments.

Since then, however, the new government has taken steps to confront the economic problems by introducing policies aimed at encouraging more private investment.

A key part of this process involved setting up a competitive legal and fiscal regime to encourage international companies to participate in the development of Ethiopia’s mineral resources. This initiative is viewed as a positive step forward from the earlier government policy of complete monopoly of the mining sector.

Ethiopia is in the Horn of Africa, and has a total land area of about 1.1 million sq. km. The population is about 53.4 million, more than 80% of whom live in rural areas. Christianity and Islam are the main religions, and Amharic is the official language, although English is widely spoken. Agriculture is the largest sector of the economy.

Ethiopia is considered underexplored, with mining contributing only 0.2% of gross domestic product. But the country is considered prospective for a variety of deposit types. Gold is the primary target of most foreign companies, and the yellow metal is found in two principal geologic environments, (1) Late Proterozoic greenstone belts and associated intrusions and (2) placer gold deposits.

Other metals and minerals are also of interest, and tantalum, soda ash, potash, nickel and platinum are considered likely candidates for development. The country also has iron ore and coal deposits.