The 7 t h CASM Annual Conference Ulaanbaatar

The 7 t h CASM Annual Conference Ulaanbaatar, Mongolia Government Initiatives in the Artisanal Mining Sector of Ethiopia By : Tesfayenesh Lema Hundie Melka Tamrat Mojo September 7 -12, 2007

Flow of the presentation • Introduction • Geology • Mineral potential • Artisanal Mining in Ethiopia • Programmes/ initiatives undertaken by the government • Outcomes of the initiatives/programmes • Problems • Future Plan

Introduction Location: East Africa (latitude o o o ETHIOPIA 3 o N - 15 N & longitude 33 E - 48 E Surface Area : - 1. 1 M km 2 Population : - over 70 million Bordered with- Kenya, Djibouti, Somalia, Sudan and Eritrea Administration: - Federal System (9 regional states & 2 City Admin. ) Altitude: - 4, 620 m asl to <130 m bsl. Infrastructure: -highways & dry weather roads connect cities. -Ethio-Djibouti railway connects Addis Ababa with Djibouti -Ethiopian Airlines has wide international and domestic network (passenger & cargo services). Location map of Ethiopia 3

-Ethiopian Telecomunication Corporation (ETC): Data, internet, fixed and mobile telephone, Telegram and Fax services. Languges: - Official language is Amharic -more than 70 languages are spoken -English widely spoken Religion: -Christianity & Islam are main religions. Export: - major export agro- indutrial products (mainly coffee, oil seed, flower, leather etc. ). • Mining : - contributes <5% to the national economy -gold, tantalite, gemstones & dimension stones are the main minerals exported.

Geology Ethiopia is underlain by Precambrian to recent geological formations -Precambrian covers about 25% of the country ( low grade volcano-sedimentary assemblage & assocaited plutonic rocks and high grade rocks) Paleozoic is poorly represented with the presumed ordovician glacial deposits in Northen Ethiopian & permo-triassic Karoo sediments at the base Ogaden basin in eastern part of the country -Mesozoic sed. Rocks (Jurassic sediments) cover 25% of the land mass of Ethiopia. - 50% is covered by Cenozoic volcanic and sediments (Tertiary to quaternary geology is related to the evolution of the East African Rift Valley). To date 40% of the surface area -Highland- Tertiary volcanics ( basalt ) of Ethiopia has been covered -Rift valley- Tertiary & Quaternary volcanics by geological mapping at &sediments. 1: 250, 000 scale -Quaternary sediments –different parts of Ethiopia

Mineral Potential Ethiopia is Endowed with diverse mineral potential: -Primary & placer gold occurrences & deposits , columbo-tanatlite & Platinum deposits, base metals, molybedenite, & iron, phosphate, Kyanite, graphite & kaolin deposits and mineralization -Manganese, salt (brine & rock salt), potash, diatomite, bentonite, sulfur, , soda ash. -Coal & oil shale deposits -High potential for geothermal resource (so far 50 Mwe potential determined) -Potentil for oil & gas (4 TCF gas & gas condensate discovered in two field) -Dimension stone (marble, limestone, granite etc. ) -Huge resource for the construction industry including cement raw materials

Artisanal Mining in Ethiopia: -Recognized as means of a liveli-hood in the mining law 52/1993 -Defined as non-mechanized mining operation of Au, Pt, precious minerals, metals, salt, clay & other minerals, -Shouldn’t worked deeper than 15 m vertically and should be carried out only by Ethiopian (Individual &/group) -currently more than 500, 000 people are engaged in AM activity Distribution: - in different parts of the country -Gold, gemstones, salt are the main minerals worked by AM Basic characteristic of AM in Ethiopia -miners live in poor living condition -Rudimentary equipment & hazardous mining methods are employed.

Women engaged in AM to supplement family income Child labour in AM Panning for Gold

Open Market for Gold, W. Eth AM Villages in Southern Ethiopia Land Degradation, AM in S. Eth. Packing Gypsum, AM in C. Eth.

Water for Multi -use Living condition Unsafe working condition Pits dug for Opalunrehabilitated

Programmes/Initiatives being undertaken by the government Two major programmes: Program 1 - Study of AM related problems by international consultant Program 2 - Project to formalize and assist Artisanal miners Program 1. consultancy study: Objective – to identify problems & initiate improvement of production of AM -to change adverse environmental impacts resulting from AM operations Comprises of: • Field study on different parts of the country in AM sites • Training to Mo. ME, GSE and RSMB experts and other stakeholders ( Mo. E, MOH, NBE, FEPA )

Programme 2 - Project to formalize and assist Artisanal miners Objective: - To improve the livelihood of AM & enhance the contribution of the sector to the national economy Established taskforces & held various stakeholders consultation: -National Bank of Ethiopia (NBE), -Commercial Bank of Ethiopia, -Federal & Regional Cooperatives Agencies, -Ministry of Revenue & Customs Authority -Ministry of Trade and Industry, -Regional Administrative &Police -Regional States Mines and Energy Bureaux -Federal & Regional Environment and Health sectors

Result of the consultation forums Mo. ME: • Give free movement permit for mineral commodity • Assist RSMB (capacity building -manpower and material) • Provision of technical & production equipment assistance to the miners • Provision of laboratory service on quality of Gold (GSE Laboratory) • Establish a unit responsible for AM in the Ministry • Incorporate ASM in the mineral policy and revise the mining law and regulation in the favour of ASM • Delineation of potential/auriferous areas • Regular consultation & experience sharing with stakeholders RSMB & Cooperatives Agency: • Organize miners and gold traders into cooperatives and issue cooperative license • Delineate license area & issue license to miners • Facilitate access to microfinance for the miners NBE : • Regularly revise the directives Mo. TI: • Issue license to gold traders

What has been done ? NBE has revised its directives: • 20% retention & 1% service charges were lifted • availability of safe custody without any charge for a month • Purchase gold according to world market • Others financial institutions authorized for purchase of gold • Reduced its purchase limit of 5 kg to 1 kg and to 250 gm gold Mo. ME: 1. Create awareness (miners, traders, admin. etc. ) on: • establishment of cooperatives • environment, Safety and health (HIV/AIDS) • Women involvement & empowerment in cooperatives, • child labour protection • Saving & microfinance utilization

2. 3. 4. 5. Technical & material support Certification of Gold quality Delineated potential areas (GSE) Training & awareness creation to stakeholders Regional Bureaux : 1. Established cooperatives 2. Issued cooperatives & mining licenses 3. Delineated license areas 4. Conduct regular follow up 5. Regular report to the Mo. ME on the status 6. Conducted TOT on value addition for opal in collaboration with Mo. ME Mo. TI: 1. Issued trade licenses

Outcomes of the initiatives/progrmmes Programme 1. • AM problems are identified & recommendations given on the way forward • Capacity of experts built through a local training • AM incorporated in the mineral policy and • The mining law & regulation under revision (Documents at draft level) • AM Unit is established in the Mo. ME Programme 2. • 28 and 27 AM Cooperatives established in 2005/2006 and 2006/2007 respectively

• Access to international market • Gold exported through National Bank of Ethiopia by AM is 604, 740 and 1938 kg in 2004/2005, 2005/2006 and 2006/2007 respectively • Gemstones exported through NBE, 995 kg in the year 2005/2006

PROBLEMS • Lack of Capacity in human, equipment & financial resource at federal & Regional levels • Lack of improved production equipments & technology • Poor Access to potable water and water for mining activity, Education, telephone and energy • Poor access road to AM sites • Lack of health care facilities • High prevalence of HIV/AIDs & Malaria • Child labor in AM

Future Plan To overcome the problems and bring sustainable development in the Am sector: • Formulate a project based on the recommendations given by the consultant • Search for technical & financial support • Experience sharing from best practice countries & AM sites locally • Further strengthen the on going project (establish cooperatives, provide technical and material support, build up market access ) • Support the use of value addition on gemstones

Statue of Gold panner In Adola Gold Belt, Ethiopia THANK YOU