Ethiopia keen for Turkish investment in untapped mining sector: Minister

By Seleshi Tessema

ADDIS ABABA, Ethiopia (AA) – Turkish companies keen to invest in Ethiopia’s untapped mining sector can boost our economy, make an attractive return on investment and further bolster bilateral ties, according to a top Ethiopian minister.

Several large and small Turkish companies have been making inquiries, visits and holding discussions on ways to invest in the Ethiopian mining sector, said Takele Uma, minister for mines, petroleum and natural gas.

“There is almost constant consultation between Ethiopia and Turkiye on this matter, which is encouraging certified and capable Turkish firms to move forward with their investment plans,” Uma said in an interview with Anadolu Agency.

“We are making concerted efforts to fast-track the process,” he added.

Turkiye is already the second-biggest investor in Ethiopia after China, with some 220 Turkish companies engaged in various sectors employing around 30,000 Ethiopians.

Uma said many investment proposals from Turkish firms were aligned with Ethiopia’s mining strategy, which “attaches importance to the development of mines that will support agriculture, industry, construction of refineries, fertilizer plants, and raise foreign exchange revenue.”

“From what we have gathered from the firms, there is particular interest in petrochemicals, fertilizers, building a gold refinery and a marble processing plant, among other areas,” he said.

- Strategic investment

Figures from the Extractive Industries Transparency Initiative indicate that Ethiopia has around 200 tons of gold, 360 million tons of coal and 69 million tons of iron.

According to conservative estimates, there are a proven 6 to 8 trillion cubic meters of crude oil and natural gas in the East African nation.

The country also sits on huge deposits of tantalum, copper, potash, iron ore, coal, platinum and opal, according to the Geological Survey of Ethiopia.

Uma said interest from international companies in Ethiopia’s mining sector has grown significantly over the past couple of years.

“Our sectoral reforms in the last four years have also been a factor in attracting these global firms,” he said.

“These reforms provide attractive royalties of 5%, security, infrastructure and good governance.”

- Unfulfilled potential, hard lessons

Despite its vast potential, Ethiopia’s mining sector remains poorly developed and accounts for less than 1% to its gross domestic product.

Part of the reforms is a strategic target of raising this GDP contribution to 10% by 2025.

“We are doing well on this front. For instance, gold generated $672 million in revenue last year and, over the past eight months, the mining sector has made $389 million,” he said.

Ethiopia is expecting potash mining to really take off soon in the northeastern Afar region, where several international companies are currently engaged in projects, according to Uma.

The minister said Ethiopia is focused on developing gas and oil reserves despite some unpleasant experiences with international firms.

He said the government was “not satisfied” with the performance of Poly GCL, a Chinese oil company that was granted a license to explore and develop oil and gas reserves in the Ogaden Basin in eastern Ethiopia.

The company, which began trial crude oil production in 2018, was also planning to construct a pipeline to Djibouti and a plant to convert gas into liquefied natural gas.

“I cannot get into the details but for various reasons, we will definitely revoke Poly GCL’s license,” he said.​​​​​​​