Ethiopia

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"Ethiopia: The mining and energy sector"

Gold in Ethiopia

Gold Home

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  • MIDROC Gold Mine plc (owned by Sheikh Mohammed Hussein Ali Al-Amoudi) operates the Lega Dembi mine in southern Ethiopia. Production averages 3,5 t gold per year. It is an open pit operation and reportedly has reserves of 70 00 kg gold. MIDROC announced in February, 2008, that drilling of the Sakari deposit indicated a resource of 17 250 kg of gold. Wardell Armstrong International is doing the exploration on behalf of MIDROC. Gold was discovered at Sakari in 1975 by prospectors and subsequently confirmed by Russian geologists. MIDROC is also exploring at Metekel Zone to the west in the Benishangul Gumuz Regional State and at Ulaulo, south of Lega Dembi mine.
  • National Mining Corporation ( also owned owned by Saudi tycoon Mohammed Hussein Al-Amoudi, who was born in Ethiopia) announced a mineable gold discovery at Dawa Dagiti in southern Oromia region. The company has concession right to explore for minerals in 85 square kilometres in the area. The company was also studying evidence of large silver deposits in northern Amhara and Tigray regions.
  • Minerva Resources plc is drilling extensions of mineralised zones at Tulu Kapi. The Company is targeting a 500m section of a larger gold zone delineated by numerous mine workings and recent exploration activity. The drilling to date confirmed that there are three broadly continuous sub-parallel zones of mineralisation, which dip to the southwest. Each of the three zones appears to be approximately 10m thick, with good strike and depth continuity. In addition to further drilling at Tulu Kapi, drilling will also be undertaken at the nearby Guji prospect and a number of satellite prospects close to Tulu Kapi and Guji.
    Gold nuggets from soil at Tulu Kapi
  • WCP Resources Ltd is exploring the Agusha-Gumu Dunga licence which is 100% owned by Addis Resources Development Pty Ltd (ARDCO) and is located 5 kilometres to the northwest of Asosa, the administrative capital of the Benishangul - Gumuz regional state of western Ethiopia. The licence, MLN-35-EL-95, covers an area of 19.76 square kilometres and lies within a greenstone belt having favourable geological and structural settings for gold mineralization.
    Four "target areas", comprising shear-hosted gold mineralisation have been defined at Tsilfa, Hulook, Kushmangal and Gumu Dunga. They have been subjected to initial and follow-up detailed early-stage exploration. Geochemical soil results have outlined significant Au anomalies.
    In particular, the Gumu Dunga gold prospect consists of intensely veined and altered rocks over an area 2,900 metres long by 350 metres wide, defined by loam, soil, rock chip, crush and channel sampling and occur in association with galena-chalcopyrite-pyrite mineralisation.
  • ASCOM, Citadel Capital's geology and mining business, announced in January, 2008, the acquisition of gold concessions in northern Ethiopia near Eritrea and the city of Mekele. The concessions, located on four different plots of land are owned by a newly established company called Nubia Mining Development plc, a partnership between ASCOM Ethiopia, which owns 55%, and Ezana Mining, a private-sector Ethiopian mining company, which holds 45%.
  • Avion Resources Corporation (TSX VENTURE:AVR) completed its purchase of the exploration assets in the North and West regions of Ethiopia from Aberdeen International Inc. Avion has purchased the rights to a 100% undivided interest in exploration licences in Ethiopia. The area covers approximately 2,674 km2 in the Northern Regional State of Tigray and 1,766 km2 in the Western regional State of Asosa. The exploration licenses lie within the southern extension of the metal-rich Nubian-Arabian Greenstone belt. Over 60 massive sulphide zones, including Nevsun's Bisha deposit and several gold deposits have been discovered in these greenstone belts.
  • Sheba Exploration plc explored the Amora Hill gold prospect in 2005.
  • No information on the Adola gold mine in southern Ethiopia.
  • No information on the Bure and Abergele gold and base metal prospects.

Oil and Natural Gas

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Ethiopia's current proven hydrocarbon reserves are minimal, but the potential to increase reserves to commercial viability is seen as promising. The country's geology is similar to that of its oil-producing neighbors to the east (on the Arabian peninsula) and the west (Sudan). In April 2001, the Ministry of Mines and Energy reported that hydrocarbon seeps had been discovered in several regions. The government plans to conduct feasibility studies to establish the extent and viability of the deposits.
Hydrocarbon exploration in Ethiopia's Ogaden Basin began over 80 years ago (Standard Oil in 1920). The Ethiopian government formed the Calub Gas Share Company (CGSC) to develop the fields. In 1994, the World Bank approved a $74 million loan to develop the Ogaden Basin fields. The Ethiopian Privatization Agency (EPA) put the CGSC up for privatization in 1998, but the EPA, citing weak bids, withdrew the tender. In December 1999, Houston-based Sicor Inc announced that it had signed a $1.4 billion joint-venture deal to develop the Calub natural gas project. Under the terms of the agreement, Gasoil Ethiopia Project (GEP), the joint-venture firm, will acquire 95 percent of the CGSC under the Ethiopian government's privatization law. Currently, 5 percent of the CGSC is held by local private investors. The Ethiopian government will hold a 20 percent interest in GEP with Sicor holding the remaining share. In December 2002, the Russian state-owned companies Methanol and Stroytransgas were negotiating with the Government to buy 50% of CGSC.
GEP plans to construct a 375-mile, 24-inch pipeline to transmit natural gas to the town of Awash, which is approximately 75 miles east of the capital Addis Ababa. At Awash, plans call for construction of a cryogenic liquids plant and two gas-to-liquids process systems with capacity to process 200 million cubic feet per day (Mmcf/d) of natural gas. The end products would be synthetic fuels and petrochemical feedstocks plus steam to generate electricity and help produce 20,000 bbl/d of potable water. A planned refinery would produce products including diesel, gasoline, kerosene and jet fuels. The gas-to-liquids system would also produce some 500 tons of ammonia per day as feedstock for a urea plant to be constructed. Construction of the pipeline had originally been planned for 2002; however, gas development in Ogaden has not yet begun.

In June 2003, the Ethiopian government signed an oil exploration deal with Petronas for 5,800 square mile tract in Gambela, in the far western part of the country. The region is closely related to the Sudan oil fields. Petronas has committed to investing in regional infrastructure, employing local staff, improving health services, and developing the skills of the ministry of Mines. Petronas is also interested in natural gas exploration in Ogaden, but no official plans have yet been made.

  • Oil proved reserves: 214,000 bbl (1 January 2002)
  • Natural gas proved reserves: 24.92 billion cu m (1 January 2005 est.)

Platinum

  • Minerva Resources plc, through its subsidiary Golden Prospect Mining Company, owns 51% of the Yubdo Gold and Platinum Mining Company (Yubdo Mining), Ethiopia. Platinum has been mined in Yubdo since the early 1930's. Yubdo Mining is the sole platinum producing company in Ethiopia. It is a small scale operation, currently producing approximately 100 ounces of platinum a year. The Yubdo Mine is 520km almost due west from Addis Ababa. Minerva Resources is investigating the viability of increased mechanisation and expansion of the current mining operations.
    Minerva Resources, through its subsidiary GPMC, entered into a joint venture with a local entrepreneur in 2001 , Mr Benti Tassisse (47%), to mine the Yubdo platinum deposit. The mining licences cover 27.26 km2, within the Yubdo Exploration Licence, 100% held by Minerva Resources. The remaining 2% of YPDG is held by Dr Kebede Belete. Minerva Resources has managed the project since July 2005 and produced 150 ounces (77 ounces attributable) for the eighteen months to the end of 2006 through test production. The Company is currently commissioning a Pilot Gravity treatment plant to improve gravity recoveries from the ore. The Pilot Gravity plant is expected increase recoveries from 5% to 13% and allow throughput to double. Annual production should therefore increase to a rate of over 500 ounces per annum. In 2006 Minerva Resources carried out a programme of pitting over the ridge above and to the southwest of the present small-scale mining operation southeast of Yubdo village, in order to estimate the resource in this small area. Thirty pits were completed on a 60m x 60m square grid covering an area of 420m x 240m. Each pit was hand dug at a nominal 75cm diameter down to decomposed bedrock encountered at an average depth of about 10m. Channel sampling at one metre intervals down the side of the pits returned platinum values ranging up to 1.8 g/t Pt, with acceptable repeatability of duplicate samples suggesting that conventional sampling and assay procedures are effective for establishing the total platinum resource.
    Based on the results of the pitting GPMC has used a polygonal method to estimate a resource of 23,760 ounces (793kg) of platinum in 1,470,000 tonnes of laterite material with an average grade of 0.54 g/t platinum within the limited area covered by the pitting programme. Importantly, the average grade of the laterite below a barren 1.5m soil layer was 0.82g/t platinum. The pitting programme also indicated that both laterite thickness and platinum grades are lower over the ridge area than on its flanks. Geological mapping shows that potentially mineralised laterite extends along strike for several kilometres on the Yubdo ultramafic intrusion. Mapping of bedrock exposed in the pitting and in outcrop shows fractures containing quartz-carbonate with pyrite in the form of boxworks and planar fracture fillings occurring in zones trending east of north with generally steep westward dips, cutting the serpentinised dunites and pyroxenites of the Yubdo Ultramafic Complex. Pit sampling shows PGM values in this material relative to fresh rock which support the contention that PGMs are concentrated by hydrothermal action associated with zones of fracturing.



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