Ethiopia’s attempt to meet a 275-million-dollar national mineral coal demand is expected to bear fruit in the not-too-distant future. According to the Ministry of Mines, Ethiopia is trying to meet national demand for mineral coal by next year and minimize imports, which cost the country 275 million dollars each year.

Ethiopia’s yearly coal demand is projected to be around 1.5 million tons. H.E. Takele Uma, Minister of Mines, stated that while the country has the capacity and resources to address its coal demands, it spends $275 million annually on importing coal for use in cement production and energy generation.

The Ministry of Mines recently broadcasted eight local enterprises qualified to invest 6 billion birr in coal production and washing. ET Mineral Development S.C. (Dawro zone), East Africa Holdings S.C. (Dawro zone), Sun Mining and Trading Plc (Gurage zone), Oromia Mining S.C. (Yayu), Realmine Trading Plc (Jima), Shaka and Sons Plc (Benishangul), and Elnet Technology Group (Kamashi) are the companies licensed to develop a coal reserve sites in the country. Currently, these companies are in different stages of production and preparation.

Two local mining companies, ET Mines Development S.C. and East Africa Holding, have begun construction of coal processing units in the Southwest Ethiopia Peoples Region. On the 4th of March, in the presence of high-level Government officials, East African Mining Corporation PLC (EAMC) laid the foundation stone for the construction of a 360K MT/yr coal washing plant in the Dawro zone in Ethiopia’s southwest region.

According to the Geological Survey of Ethiopia, there are 17 prominent locations in which potential coal resources have been identified, which amount to over 360 million tons of coal. At the same time, other explorations indicate that the figure could be much more than the projected figure.

Reports indicated that Amhara, Benishangul-Gumz, Oromia, and the Southern Nations, Nationalities, and Peoples’ Region have some of the richest coal reserves in the country.

Ethiopia has a diverse set of mineral resources used to generate foreign exchange and replace imports in the industry. Based on research in 2019, the growth of the country’s large-scale mining industry has been hampered by inadequate exploration of available resources due to a lack of legal framework and exploration capacity, as well as a lack of promotion.

In its Growth and Transformation Plan, Ethiopia has set as a target for its mining sector to contribute to 10 percent of GDP by 2025.

Mining, along with agriculture, tourism, manufacturing, and the development of ICT (Information and Communications Technologies), is regarded as a pillar in the government’s Homegrown economic initiatives to boost Ethiopia’s growth.

Beyond attracting investors to the energy sector, coal production at the national level is expected to help recover coal minerals expenditures paid in foreign currency.

Get Ethiopia’s Mining Sector Investors Guide through the link https://businessinfoeth.com/wp-content/uploads/2021/12/Mining-in-Ethiopia-Investor-Guide-2020.pdf

The views and opinions expressed in this information are those of the authors and do not necessarily represent the official view of BIE Intelligence PLC or Business Info Ethiopia.

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