Quote from Alex bobby on January 1, 2025, 3:48 AM

Ethiopia’s Mining Boom: Opportunities and Challenges

Ethiopia’s Prime Minister Abiy Ahmed recently highlighted the nation’s mining sector as a beacon of economic growth, projecting historic revenues of up to $2 billion from gold mining in 2024. This optimistic outlook comes as the country inaugurates a gold exploration and mining factory in the Gambella Region, signaling a new chapter for Ethiopia’s extractive industries. However, the promise of prosperity is met with significant regional tensions and environmental concerns, particularly in Tigray, one of Ethiopia’s most resource-rich regions.

Ethiopia’s Economic Landscape

On December 10, Abiy Ahmed touted Ethiopia’s status as one of Africa’s fastest-growing economies, attributing much of this success to the gold mining sector. “The gold mining industry stands out as a significant driver of growth, presenting immense potential for both local and international investment,” he declared.

Indeed, gold mining has emerged as a critical pillar of Ethiopia’s economy. The Commercial Bank of Ethiopia’s branch in Shire Inda Selassie, a key hub for gold mining in Tigray, reported $132 million in gold purchases over just three months. Yet, the region’s officials have raised alarms about the lack of equitable benefits, highlighting stark disparities between resource extraction and local economic development.

Tigray’s Uneven Benefits

The interim president of Tigray, Getachew Reda, revealed that while 28.25 quintals of gold entered the federal system from August to October 2024, the regional government had not received any revenue. This discrepancy is particularly troubling as Tigray struggles to recover from a devastating two-year civil war. The region’s annual budget—a modest $100 million—falls short of addressing the extensive damage to infrastructure and public services.

Getachew’s grievances extend beyond economic inequities. He expressed concerns over the alleged smuggling of gold out of Ethiopia and called for stricter oversight to curb what he described as “a crime against the region.”

Environmental and Health Concerns

Beyond economic disparities, Tigray faces severe environmental and health challenges from gold mining activities. Residents and officials have reported the harmful effects of chemicals like mercury and cyanide, which are used in the gold extraction process. Livestock deformities, degraded farmland, and water contamination have become alarmingly common in mining areas.

“We’ve seen the damage to animals, the land, and people who use contaminated water,” said Gizachew Weldetsadik Beyene, director of the Radiation and Nuclear Safety Department in Tigray. Women in mining areas often work without safety protocols, exposing themselves and their communities to toxic substances.

The World Health Organization (WHO) classifies mercury as one of the top 10 chemicals posing public health concerns. In response to these issues, the Tigray Bureau of Innovation and Technology has called for urgent action to regulate the use of hazardous chemicals in mining operations.

Regional Actions and Accountability

In light of these concerns, Tigray’s interim administration recently announced a halt to gold mining activities. Lieutenant General Tsadkan Gebretinsae, deputy president of Tigray, stated that the suspension aims to address environmental degradation and ensure fair distribution of mining revenues. However, details on the implementation and timeline remain unclear.

The region has also taken legal steps against illegal mining operations. The Tigray High Court’s president, Judge Mengistu Teklay, emphasized the importance of governing resource utilization by law to prevent health and security risks.

Corporate and Government Responses

Ezana Mining Development, a major local player in Tigray’s gold sector, has faced scrutiny over its operations. While the company denies allegations of pollution and illegal practices, critics argue that greater transparency and accountability are needed. The federal government has yet to provide a comprehensive response to these allegations, further fueling regional discontent.

Balancing Growth with Sustainability

Ethiopia’s ambitious mining goals underscore the sector’s potential to drive national economic growth. However, achieving these milestones requires addressing the significant challenges faced by resource-rich regions like Tigray. Ensuring equitable revenue sharing, enforcing environmental regulations, and prioritizing community well-being are critical steps toward a sustainable mining future.

As Ethiopia navigates the complexities of its mining boom, the government must balance national aspirations with local realities. Only by fostering transparency, accountability, and inclusivity can the country unlock the full potential of its natural resources while safeguarding the environment and the livelihoods of its citizens.