Addis Ababa

February, 1998

Table of Contents

1. Overview of Economic Policy
2. Background to the Mineral, Petroleum and Energy Sector
3. Sector Policies and Strategies
4. The Mineral Subsector
4.1 Geology and Mineral Resources Potential
4.2 Current Status of the Mineral Subsector
4.3 Mining Legislation
4.4 Procedure for Licensing of Mineral Investment
4.5 Checklist to Submit Application for Mineral Operations


4.6 Potential Areas of Investment
4.7 Specific Investment Opportunites in the Sector
5. The Petroleum Subsector
5.1 Ethiopian Petroleum Potential
5.2 Current Petroleum Exploration and Development Activities
5.3 Potential Areas of Investment
5.4 Procedures for Acquiring a Petroleum License
6. The Energy Subsector
6.1 Energy Resource Potential
6.2 Status of the Subsector
6.3 Potential Areas of Investment


In mid-1991 the previous military regime ended, and a new government was installed.
At that time, the economy was to a large extent under the dominance of the state which
controlled both product and factor markets, and owned a large part of the modern
sector of the economy. There were severe price distortions of foreign exchange and
interest rates as well as of goods and services. Since then, the focus of economic policy
has been to switch from a command to a market economy and progressively integrate
Ethiopia into the world market.

The first task was to dismantle the legal restrictions on private investment and
withdraw the state from controlling prices and markets. To this end, domestic and
external trade were liberalized, state monopolies were abolished, and, at the same
time, public enterprises were made autonomous in terms of management and finance,
cut off from budgetary support, and made subject to eventual divestiture.
Simultaneously, integration with the global market was initiated through reduction of
import tariffs and devaluation of the Birr (Ethiopia's currency). The maximum tariff rate
was reduced from 230 to 80 per cent, while the Birr was devalued by 142 per cent
against the US dollar. These measures changed the course of the economy within a
relatively short period of about two years, between mid-1991 and 1993, bringing into
operation market forces and removing substantially price distortions.

In subsequent years, the establishment of a market economy and integration with the
world market was further reinforced. The foreign exchange auction market for import of
goods was fully deregulated, and the auction itself was held more frequently, changing
from biweekly to weekly. Availability of foreign exchange for payments of invisibles,
such as business travel and medical treatment abroad, was also increased. Import tariffs
were further reduced from a maximum of 80 to 50 per cent; the average rate being
presently 24.5 per cent. Price controls which remained on a few essential goods were
lifted, thereby virtually completing the deregulation of prices of goods and services. In
addition, petroleum prices were made periodically adjustable to reflect changes in world
price. Pan-territorial pricing of fertilizer was terminated as was fertilizer subsidy.
Tariffs of electricity and water were adjusted upwards, the former being scheduled to
cover costs fully and allow a profit margin in the coming few years.
Telecommunications, on the other hand, continues to be operated on profit basis.

Privatization gathered momentum after an initial phase of preparation. Given the
underdevelopment of the economy, there are only about 200 state-owned enterprises to
be privatized including factories, state farms, hotels, construction firms, transport
corporations, wholesale marketing firms, and small retail outlets and restaurants. State-
owned marketing enterprises lost their monopoly with the removal of entry barriers for
private firms, and shrank due to both deliberate down-sizing and competition, while
insolvent enterprises that could not be resuscitated were allowed to go bankrupt. Retail
shops, restaurants, a few factories and hotels have been privatized. Several other
enterprises have also been offered for sale.

Currently, the main focus of the on-going economic reform is the widening of the scope
of foreign investment to include telecommunications and electricity generation,
complete the liberalization of the current account, and the deregulation of interest
rates side by side with the creation of securities market. In keeping with the objective
of progressively liberalizing the foreign trade regime for goods and services, payments
on invisible trade are expected to be deregulated fully by the end of 1990s. This will
enable Ethiopia to attain current account convertibility. At the same time, the
maximum tariff on imports will be reduced and the average rate lowered to 19.5 per

To summarize, a transition from a command to a market economy has been made. There
remain, of course, several scores of enterprises in the hands of the state, but essentially
due to the process of undertaking privatization itself, rather than lack of readiness to
privatize. Perhaps more challenging is the elimination of price controls, removal of
subsidies, commercialization of telecommunications and electricity, and convertibility
on the current account. In all these areas, the achievement in policy reforms has been
remarkable, as Ethiopia has succeeded to establish a market economy, with minimal
price distortions and successively decreasing tariff rates, on a sustainable footing.


Ethiopia is a land rich in mineral resources of which gold, tantalum, soda ash, potash,
nickel and platinum are the most likely candidates for development either by local or
foreign investment. Although it has been repeatedly said that the national mineral wealth
potential is enormous, the sector's contribution to the national economy is less than one

Between 1974 - 1991, private investments were not allowed in the mineral sector; rather
the government was fully responsible for the exploration and development of the sector.
As the development of mineral resources requires huge investment, advanced
technology and trained manpower, the government could not easily bring the mineral
sector to a significant stage of development.

The new economic policy of Ethiopia permits and fosters the investment of private
capital and has created a conducive environment for the participation of local and foreign
companies in the development of the mineral sector. This was manifested by the
introduction of liberalized Mining and Income Tax Proclamations in 1993 and the
supporting Mineral Operations Regulations in 1994.

The new Mining Proclamation provides the license holder a number of incentives such
as low royalties; exemption from custom duties and taxes on equipment, machinery,
vehicles and spare parts necessary for mineral operations; and a 10 year loss carry

The future of the mineral sector is now firmly allied with private investment. The new
Mining Proclamation recognizes the significant role of private investment in capital
formation, technology acquisition and marketing of minerals. This is a very positive step
forward from the earlier policies of a complete monopoly of the sector by the

The Legedembi primary gold mine, which is the only modern mechanized large scale
mining operation, has currently been privatized by signing a sales contract with National
Mining Corporation, a foreign-owned mining company. This shows the commitment of
the government to encourage private investors in the mineral sector.

The resource potential of petroleum and other types of energy is also highly promising.
Potential petroleum development areas have been selected and have been made open for
private investment. In the areas identified, some geological exploration activities have
been done and the possibility for the occurrence of oil and gas has been indicated. The
legal instrument that applies to the petroleum sector was promulgated in 1986.

Regarding energy, the sector requires due emphasis in order to develop at a pace that will
sustain the country
's economic and social development. The potential of Ethiopia's
renewable and non-renewable energy resources is enormous. Currently, however, less
than 4% of the population is supplied with electricity. The majority of the population
still uses traditional sources of energy mainly biomass that is resulting in massive

This brochure is prepared to give a brief idea on the mineral, petroleum and energy
resources of Ethiopia, and to outline the potential areas of investment in the sector. For
this purpose, sector policies and strategies are presented next. This is followed by a
discussion separately of the mineral subsector, petroleum subsector and energy
subsector, respectively. For each subsector, effort has been made to indicate the
available resources of the country that may be further explored and developed by
investors. Additional and more detailed information may be obtained from the Ministry
of Mines and Energy which warmly welcomes investors wishing to participate in the
development of these sectors.


  1. a)Mineral Resources

Geological studies conducted so far in the country suggest that Ethiopia is endowed with
a favorable geological environment that hosts a wide variety of promising mineral
resources. These explorations have confirmed the existence of deposits of gold,
platinum, tantalite, soda ash, phosphate, dimension stones, geothermal, petroleum and
other metallic, industrial, and chemical minerals. Despite all these occurrences, mineral
development remained to be limited. During the years between 1974 - 1991, all
exploration and development activities of mineral resources were done under the
government monopoly. Private individuals were only limited to the exploitation of some
construction minerals at a small-scale level.

To improve the situation in the mineral subsector steps have been taken to encourage
the participation of private investment. This was clearly witnessed in the transitional
government economic policy as well as the five year plan of action for peace, democracy
and development. To this effect, the Ministry of Mines and Energy has identified areas for
development in the subsector. As a matter of policy there is no restriction for the participation
of private investment in the development of any type of mineral resources. The policy
document of the mineral subsector reflects the importance of:

To implement the policy objective, a strategy has been laid down by the Ministry. The
main strategies are to:-

The potential areas for petroleum resources are classified in their respective
occurrence basins; Ogaden Basin, Mekelle Basin, Abbay Basin and Gambella Basin.
Out of these, the Ogaden Basin has been extensively explored by the government and
international oil companies. The largest sedimentary basin with a commercial discovery
of gas condensate field, the Calub Gas Field, is situated in the Ogaden Basin.

The policy towards the petroleum subsector is similar to that of the mineral subsector.
The major policy objectives and strategies mentioned above are also applicable here.
The subsector is expected to be developed by international oil companies by allocating
risk capital for the exploration and development of petroleum resources. The
government comes into the picture when commercial discovery is obtained and
exploitation begins.

  1. c)Energy Resources

For the great majority of the population, woody biomass is the only source of energy.
The modern segment of the energy subsector is very small and relatively few people
have access to modern energy supplies. The total per capita consumption in 1995 was
estimated to be 0.29 Tons of Oil Equivalent (TOE) of which only about 0.02 TOE was
generated from modern energy sources (electricity and petroleum), while the remaining
was secured from wood and other biomass fuels.

The new energy policy is now being implemented with the objective to reduce the
misuse of energy, pollution and imbalance of natural resource utilization. Among the
objectives and priorities of the policy are the following:

Following the policy, the government has revised the current legal and regulatory
framework of power generation, transmission and distribution, and finalized the electric
law. To administer activities related to electricity, a government institution called
Ethiopian Electric Agency has been legally established by Proclamation No. 86/1997.
The main objective of the Ethiopian Electric Agency is to promote the development of
efficient, reliable, high quality and economical electricity services.

There is also a policy shift regarding the generation of electricity so as to allow private
investment in the generation of electric power in the country which was previously
monopolized by the Ethiopian Electric Power Corporation. The investment law of the
country allows the participation of private investment in electric power generation.


4.1 Geology and Mineral Resources Potential

Highland Ethiopia is underlain mainly by Tertiary volcanic, mostly basalt. The Rift
Valley, which divides the Ethiopian highlands into the eastern and western plateaus, is
underlain by Tertiary as well as Quaternary volcanics and sediments. These include
important deposits of salt, diatomite, bentonite, sand, scoria, and various rock types
useful for construction. The younger volcanics, especially the Quaternary volcanics, are
sources of geothermal steam and mineral water.

Rocks of Mesozoic age are mainly sediments such as sandstone, limestone and gypsum.
They cover the whole of the eastern lowlands of Ethiopia and large areas of Harar, Bale,
Borena, Tigray. They also occur in the upper valleys of the Blue Nile and its tributaries in
central Ethiopia. The Mesozoic formations are important exploration targets for oil and
gas as well as sources of raw materials for cement, glass and lime production. They also
supply materials for the construction industry. The Paleozoic formation are sediments
localized in restricted areas in Tigray in the north, the Blue Nile Basin in the center, the
Ogaden Basin in the east and the Gillo Basin in the southwest.

A quarter of the country is underlain by Precambrian metamorphic terrains. Precambrian
rocks are exposed in the northern highlands as well as in the western, southern and
southwestern lowlands and eastern Ethiopia. They consist of Archean to Lower
Proterozoic high grade gneisses and Upper Proterozoic low grade volcanic and
sedimentary rocks of green schist facies associated with metaultramafic bodies and
acidic and basic intrusions. The low grade Upper Proterozoic rocks are exposed in the
south, west, southwest and north forming

the Southern, Western, the Southwestern (the Akobo) and the Northern (the Tigray)
Greenstone Regions, respectively. Most of the known metallic mineralizations hosted in
these low grade metamorphic rocks is known over a little area in the east exhibiting lead
and copper anomalies.

The Precambrian rocks host both metallic and industrial mineral resources. Important
mineralizations include gold, platinum, copper, iron, nickel and rare metals. Industrial
mineral deposits include feldspar, marble, quartz, kyanite, dolomite, talc and graphite.

The history of modern mining is recent in Ethiopia. Mineral prospecting and exploration
began about the end of the 18th century. However, some mining activities such as iron
mining and salt extraction were known in Ethiopia since time immemorial.

Modern mineral exploration started in 1968 with the establishment of Ethiopian
Geological Survey as a department within the Ministry of Mines and Energy to
undertake surveys of the geology and potential mineral reserves of the country. Since the
establishment of Geological Survey, various mineral exploration projects have been
undertaken by the Ethiopian government, both on its own and with the assistance of
donor organizations. Surveys were carried out mostly in the Precambrian low grade
metamorphic terrains. Exploration activities so far have outlined priority target areas and
reserve of precious metals (primary and placer gold), platinum, rare metals, base metals
and iron.

Over the past 25 years, the Ethiopian Geological Survey has carried out exploration for
metallic and industrial minerals and the results of these studies are available to investors.
A quarter of the total surface area of the country has been geologically mapped at
1:250,000 scale, of which 20% has been geochemically surveyed at same scale. Some of
the known important deposits are: the Adola placer gold, the Legedembi primary gold,
the Kenticha columbotantalite, the Bwambwawiha kaolin, the Kenticha quartz, the
Yubdo platinum, the Bikilal phosphate, the Dallol potash, the Gewane Mille bentonite,
the Lakes Region diatomite, the Lakes Region soda ash, the Daleti marble and the Adola

4.2 Current Status of the Mineral Subsector

Even though modern mining in Ethiopia is recent, gold has traditionally been mined from
alluvial and, to a lesser extent, primary free gold since ancient times. However, modern
gold mining began only in 1930s with the discovery of placer gold in Bedakesa Valley of
Adola area, southern Ethiopia. Later on, modern investigation continued and resulted in
the discovery of important deposits of gold, such as Legedembi, and other minerals.

Other mining activities include the production of tantalite (20 tons per year) and soda
ash (20,000 tons per year), on pilot scale. Mining of kaolin, dimension stones
(limestone, marble and granite) and small scale and artisanal mining of precious metals,
gemstone, salt, industrial minerals and construction materials are the main mining
activities in Ethiopia.

In general, current activities in the mineral sector are being dominated by the private
sector. Some of the privately owned mining activities include; the Dalleti marble which
was purchased by the National Mining Corporation (NMC) from the previous Ethio-
Libyan Joint Mining Company, and Legedembi primary gold mine which is also
purchased by NMC. Gold exploration activities, which were initially designed and
implemented in order to increase the production of gold, have also been given in
concession to private companies.

As a result of the conducive fiscal and legislative environment, the country is now
enjoying the participation of both foreign and local investors in exploration and mining.
So far, about 9,400 square kilometers of potential area for gold and other minerals are
under concession. In addition to 19 local companies, 11 foreign companies have been
granted prospecting, exploration and mining licenses for gold and base metals, platinum,
industrial and construction minerals, notably, potash, diatomite and high quality
ceramics raw materials. The companies came from South Africa, Canada, America,
Guyana, Italy and Norway. Moreover, relatively new concepts and models for the local
industry are being tested for exploration of epithermal systems (outside the well known
gold fields of the greenstone belts) in the Rift Valley volcanics. Intensive exploration
programs are also being conducted for precious stones such as diamonds and sapphire
and other gemstones in different parts of the country. Names of companies who are
currently operating in the country and their license detail are attached herewith.

For the collection and dissemination of geological information, ten capital projects are
being carried out by the Ethiopian Geological Survey in different parts of the country in
the current fiscal year. The projects include two regional mapping, one hydrogeological
study, two industrial minerals exploration (one for phosphate), two gold and base metals
exploration, one geothermal exploration, and one for equipping the geological laboratory
with modern equipment to upgrade the facility. The ongoing exploration activities which
are being carried out by the Geological Survey will add information on mineral
occurrences. Such information will be provided to potential investors.

4.3 Mining Legislation

As a result of the political change that took place in 1991, a new economic policy has
been introduced in the country. In the mining sector, the government has promulgated a
new Mining Proclamation and Mining Income Tax Proclamation to encourage the
participation of private capital in mineral prospecting, exploration and development

The new Mining and Mining Income Tax Proclamations were issued in June 1993. The
Mining Regulations came into effect in April 1994. The Mining Proclamation No.
52/1993 and the Mining Income Tax Proclamation No. 53/1993 were amended in favor
of investors in 1996. The following are highlights of the laws.

Mining Proclamation No. 52/1993 and Mining

(Amendment) Proclamation No. 22/1996

These laws lay the general framework of rules governing the mining industry in Ethiopia

Invite private investment in all kinds of mineral operation;

Provide one year exclusive prospecting license;

Provide three year exclusive exploration license with two renewal of one year each;

Provide exclusive mining license for twenty years with unlimited renewals;

Require adequate health, safety and environmental protection;

Provide for inclusion of minerals which were not originally specified in the license as
they are discovered;

Guarantee the licensee's right to sell the minerals locally or abroad;

Provide for exemptions from custom duties and taxes on equipment, machinery,
vehicles and spare parts necessary for mineral operations;

Guarantee the opening and operation of a foreign currency account in a bank in
Ethiopia; retention of a portion of foreign currency earning; and remittances of profits,
dividends, principal and interest on foreign loans etc. out of Ethiopia;

Provide for 2% government free equity in mining operations;

Require environmental impact study; and

Provide for dispute settlement through negotiation and international arbitration.

Mining Income Tax Proclamation 53/1993 and Mining

Income Tax (Amendment) Proclamation No. 23/1996

The laws provide for:

Generous deductions and calculations of expenditure;

Ten year loss carry forward;

Write-off of investment within four consecutive years;

35% tax on taxable income generated from mining operation;

10% dividend tax;

2% optional state free equity; and

Up to 5% royalty on an ad valorem basis.

4.4 Procedure for License in Mineral Investment

In the Ministry of Mines and Energy, the Mineral Operations Department is responsible
for licensing of prospecting, exploration and development works. Any person who
possesses financial resource, technical competence, professional skill and experience
necessary to fulfill the obligation under the license can apply to the Department.
Application for a license or for its amendment, renewal, transfer, assignment,
encumbrance or inheritance shall be in the form and contain the necessary information
specified by the Mining Proclamation and Regulation.

Application can be submitted to the Department clearly indicating the type of license
required (prospecting, exploration or mining), the geographical coordinates of the area
and the expected mineral type. The types of licenses issued by the Department are given
below in Table I.

Table I

Types of Licenses

Prospecting License
50 km2
1 year, not renewable
Exploration License
20 km2
3 years plus 2x1 year renewals
Mining License
Small scale mining
20,000 m2
10 years plus nx10 years renewals
10 km2
10 years plus nx10 years renewals
Large Scale mining
200,000 m2
20 years plus nx10 years renewals
10 km2
20 years plus nx10 years renewals

Foreign entities are required to be registered through the appropriate government body in
the country. Article 48 of the Mining Proclamation states that, unless otherwise
permitted or determined by the Licensing Authority, a license shall be registered in the
Registry of Trade with the appropriate authority and shall maintain an office in Ethiopia
during the entire term of the license.

Title IX of the Commercial Code applies to foreign entities as follows:

a. Firms incorporated abroad having their head office in Ethiopia

Firms incorporated abroad and whose head office or principal place of business is in
Ethiopia shall be subject to all the provisions of the Commercial Code and the
regulations made thereunder, including provisions relating to memorandum of

b. Firms incorporated abroad having subsidiary offices or branches in Ethiopia

Firms incorporated abroad and which have subsidiary offices or branches in Ethiopia,
with permanent representation, shall be subject in respect of each office or branch to
the provisions of the Code relating to deposits and publication of the memorandum of
association and publication of balance sheets. Such firms shall publish the names of
persons representing them permanently in Ethiopia, and shall furnish their signatures;
and shall be subject as regards their branches or subsidiaries to the provisions
governing the operation of the enterprise and imposing special conditions.

c. Foreign firms which differ from the forms of Ethiopian business organizations

Firms incorporated abroad, which differ from those covered by the Code, shall be
subject to those provisions of the Code concerning share companies, which relate to
the publication of the acts of the firm and the liability of directors.

Before issuing a license for mineral operation an agreement will be negotiated between
the Ministry and the investor.

4.5. Checklist To Submit Application For Mineral Operations Licenses In Ethiopia

An application for prospecting, exploration and mining licenses shall contain
information specified by the Mining Regulation No. 182/1994. Therefore, applicants are
requested to properly follow the checklist below.

a) Application for Prospecting License

Application for prospecting license will be received and registered when it contains the
following particulars:

(i) Where the applicant is a natural person:

· Full name,

· Nationality,

· Place and date of birth,

· Profession,

· Place of residence and address,

· The type of mineral and geographical coordinates of the proposed area at 1:250,000 or
1:50,000 scale,

· Any license or other mining right the applicant has previously held in Ethiopia,

· Description showing the applicant's financial situation, technical competence and

· Work program, and

· Expenditure proposed to carry out the work program.

(ii) Where the applicant is a legal person:

· Name of the legal person,

· Nationality,

· Legal form,

· Capital,

· Address of its head office, name and address of its representative in Ethiopia,

· The following documents duly certified by the appropriate officer of such entity;
copies of memorandum and articles of association,

copies of the latest annual report of the board of directors, if available,

copies of the balance sheet, profit and loss statement and auditors reports for the
previous three years, if available,

a list of the members and names of the board of directors,

showing the address and nationality of each, and any other person authorized to sign
on behalf of the applicants,

the type of mineral(s) requested,

the location of the proposed area: the name of the administrative region, localities
and geographical coordinates,

topographic map at 1:250,000 or 1:50,000 scale showing the proposed area,

copies of any license, or other mining right the applicant has previously held in

description showing the applicant's financial situation,

description showing the applicant's technical competence and experience,

the yearly work program, time schedule, material and manpower (according to
profession) distribution as well as total yearly expenditure the applicant proposes to
carry out and incur during the time of the license,

other reasonably requested information by the licensing authority.

b) Application for Exploration License

Application for exploration license will be received and registered when it contains the
following particulars:

c) Application for Large Scale Mining License

Application for large scale mining license will be received and registered when it
contains the following particulars:

4.6 Potential Areas of Investment

The country's mineral resource is untapped despite its enormous potential. This is
exhibited by the very low contribution of the sector to the national economy. The
government's intention in the future lies in the collection of basic geological information
and delineation of the possible mineral occurrences for potential investors.

Potential investment areas in the mineral sector are concentrated in the Adola,
Ageremaryam, Moyale, Western Akobo and Tigray greenstone regions. The details of
each greenstone region is discussed briefly below.

a) Adola Greenstone Region

The Adola belt is 20-25 kilometers wide and some 150 kilometers long. Adola area is
covered by geological mapping and is underlain by units of the Precambrian basement
complexes. Only the middle and upper complexes have been studied in any detail. These
have been deformed in linear north-trending folds, which have been cut by deep-seated
longitudinal faults, and flexures trending northeast and northwest. The Upper Complex,
the Adola volcano-sedimentary sequences, is confined to the 20-25 kilometer-wide
Megado graben-syncline. The syncline is a down faulted and folded block bordered by
the higher metamorphic grade Middle Complex units.

A helicopter-borne geophysical survey was done on the area and magnetometer,
electromagnetic and radiometric data were collected along the flight lines. The result is
available in hard copy and on CD-ROM. The majority of the known gold-bearing areas
are in this region. The Kenticha Greenstone Belt, lying 12 to 15 kilometers east of the
eastern marginal thrust of the Adola Belt, contain some gold, but is chiefly of interest for
nickeliferous laterites and rare metals, associated with ultramafics and pegmatites, respectively.

Most of the mining activities in the country is concentrated in this area. Currently,
National Mining Corporation is carrying out exploration for gold and associated minerals
in this locality and has also purchased the Legedembi gold plant and the surrounding
deposit of 88 square kilometer area. Placer gold exploitation is taking place by a state-
owned enterprise in the area. This enterprise is also in the process of being privatized. In
this same area, ceramic mineral is currently being mined to be used as raw material for
Tabor Ceramics Factory built in Awassa town.

The area is highly promising for gold, rare metals, feldspar, quartz, nickel, chromium and

b) Agere Maryam And Arero Greenstone Region

The Agere Maryam area is some 260 kilometers southwest of the town of Kibremengist
in Borena Zone Oromia National Regional State. The heavy concentrate geochemical
surveys conducted in this area have located gold anomalism along a north-south zone
some 48 kilometers long and 4 kilometers wide. In the Ogo Basin, the coarser gold
grains are probably been derived from quartz veins, whereas the finer gold is from pyrite
which is found as disseminations and stringers, predominantly in graphitic quartz-mica
schists. Overall, the low-metamorphic grade schists are the host for the gold in this basin.

During the regional lithogeochemical survey, tantalum dispersion trains were located
over the gneisses of the Buluka and Bore formations. The anomalism has associated Nb,
Li, Sn, Pb and Mo. These, coupled with the high tantalum contrast between background
and anomalous contents, suggest that they are related to rare earth mineralization, and
hypothetically linked paragenetically to albitite apogranites formed by metasomatism.

The Arero Greenstone Region is some 100 kilometers south-west of the town of
Kibremengist. It is the southern extension of the Adola Greenstone Belt. Regional and
follow-up heavy concentrate surveys, regional and follow-up lithogeochemical surveys,
and detailed prospecting and exploration surveys were conducted in selected parts of the

The regional heavy concentrate work demonstrated that high gold contents were
associated with high contents of pyrite. The auriferous pyrite occurs in metabasic and
meta-ultramafic lithologies. Bismuth, tin and tungsten anomalies are confined to a
northwest trending zone which crosses the regional structure and lithologic trend. It was
suggested that this granitophyllic type mineralization is controlled by a north west

Three types of mineralization were suggested in the area:

Gold related to pyrite bearing metabasic and meta-ultrabasic rocks which are confined
to two zones within a northwest trending zone;

Cr, Co, Ni, V related meta-ultramafic rocks occurring along deep seated faults or
perhaps along a northeast trending thrust zone; and

Bi, Sn, W related to intermediate-to-acid alkaline intrusions occurring as dikes and
veins within metabasic to meta-ultrmafic rock units. These are confined to a northwest
trending metallogenic zone discordant to the general regional geologic trend.

The lithogeochemical surveys resulted in dividing the Arero area broadly into east and
west geochemical blocks, separated by a thrust or deep seated fault zone. The east block
is characterized by acidic intrusions, and the west block by metabasic and meta-
ultramafic intruded by basic and acidic dikes, pegmatites and quartz veins.

c) Moyale Greenstone Region

The Moyale Greenstone region is in southern Ethiopia, on the border with Kenya. Owing
to its location almost south of the Adola Greenstone Belt and to similar lithologies, it is
considered to be a southern extension of the Adola Greenstone Belt.

Moyale Greenstone Region is about 2 kilometers north-northeast of Moyale town. The
geology of the area is relatively simple. A metagranodiorite batholithic body underlies
the area. It is in tectonic contact with basic to ultramafic rocks on the east and on the
west. There are many quartz veins in the area. They have three general orientations:
striking north south (following the general foliation), northeastern and northwest.

The mineralization in the area is of two types: gold-sulfide in quartz and gold-quartz
without or with minor sulfide. The gold-sulfide veins are characterized by appreciable
lead, copper, zinc, and pyrite.

The Hassamte-Haramsem area is located east of the town of Moyale. The rocks in this
area are metagranodiorite, amphibolite, amphibolitic gabbro, garnetiferous gabbro,
banded amphibolite and chlorite amphibolite schist. Primary gold is found in both
amphibolite and granodiorite. There are different generations of quartz veins with visible
and invisible gold. The most prominent are quartz veins filling extensive gash fractures
of the shear zone in the granodiorite. The intensely sheared part of the amphibolite
contains fine, disseminated pyrite and chalcopyrite mineralization. The intensity of
mineralization is related to the intensity of alteration and shear-zone fracturing.

d) Western Greenstone Region

The predominant lithologies of the western Greenstone belt are chlorite, sericite and
graphitic schists, phyllites, quartzites, and andesitic to rhyolitic volcanics. Iron-bearing
quartzites and intraformational conglomerates are also present. The metamorphic grade
is no higher than upper green schist to lower amphibolite facies, but commonly does not
exceed lower green schist facies. The area is underlain by a plutonic basement of
metadiorite-granodiorite, unconformably overlain by the metavolcanic-metasedimentary
sequence of the late Proterozoic Tsalet group.

Under the Western Greenstone Region the following potential areas are identified:

Gold and base metal deposits.

Azale-Akendayu, located 22 kilometers south-east of the town of Kurmuk,




Mount Dul,

Ondonok, located some 55 kilometers northeast of the town of Assosa,

Tulu Kami, located 4.5 kilometers east of Nejo,


Lega Baguda, located 48 kilometers southeast of Yubdo,

Chokorsa, located 20 kilometers southeast of Nejo,

Tulu Kapi and Ankori, located some 15 kilometers northeast of Yubdo,

Keta, located 7 kilometers east of Nejo,

Bomu Menghi,

Bascia, located 25 kilometers southeast of Assosa,

Gambella Mountain, located near the border with the Sudan,

Guba, Dura Abelli drainage, Beles drainage, Abumari, Abteselo, Mekezen.

Platinum Deposits

Yubdo:- the deposit was discovered in 1923 - 1924 and mining was started in 1926.
Through 1976, approximately 2000 kilograms of platinum concentrate were produced.
From nearby drainages, nuggets several millimeters across have been analyzed. They
are a Pt-Fe alloy, with platinum far more abundant than iron.

Dalatti and Tulu Dimtu.

Iron and phosphate deposits

Bikilal, located 18 to 20 kilometers northwest of the town of Gimbi. The area studied is
underlain by three principal rock groups: Amphibolite and amphibolite schists, Bikilal
intrusive basic rock and Granite group rocks. The phosphate potential is in an
apatite-bearing anorthosite gabbro formation. Spatially and genetically it is associated
with an intrusion of gabbroic rocks.

e) Akobo Greenstone Region

The lithologic units of the Akobo Greenstone Belt are generally similar to those in the
Western Greenstone Belt and are considered a southern extension of that terrain. The
rocks here include relatively low grade metasedimentary and metavolcanic units which
enclose ultramafic lenses. The five general lithologic types in the Akobo basin
disregarding the plutons, are:

mafic schist and gneiss,

meta-ultramafic bodies,

metasedimentary schists,

marble , and

undifferentiated schist and gneiss.

The Akobo basin merits prospecting for platinum as well as for gold and other metals
such as copper and nickel.

f) Tigray Greenstone Region

The Tigray Greenstone Region is located in northern Ethiopia. The late proterozoic
Tsaliet group is well developed in this region and consists of propylitized andesites and
diabases, tuffaceous slates and graywackes. This predominantly volcanic sequence
merges into the overlying Tambien group. The main rock types in this group are slate and
shale-commonly graphitic-with interbedded limestones. Small bodies of pyroxenite and
serpentine are found in western Tigray. Metamorphism has reached the green schist
facies as a rule, although locally it has reached the amphibolite facies.

Mineralization in the known deposits is predominantly pyritic, with associated copper,
zinc and lead sulfides. Base-metal occurrences and geochemical indications are found in
a number of areas in the Tigray region. Copper occurrences and geochemical anomalism
are found associated with the Tsaliet metavolcanics in the lower Werri and Tsaliet river
drainage as well as west-central Tigray. Lead and Zinc anomalies in soils are present at
Mariam Adi Destra, southeast of Hauzien, trending across the Giva river.

The mineralization of copper prospect at Tsehafi Emba occurs within a meta-gabbro
associated with other metamorphosed intrusion, all forming a syntectonic complex. This
complex, known as the Firfira, lies within the low grade, regionally metamorphosed
volcanics and sediments of the late proterozoic Tsaliet group.

g) Ethiopian Rift Zone

The Ethiopian rift zone forms a valley that cuts through Ethiopia in a general north-
north-east direction. It is a graben, the failed arm of the Red Sea Gulf of Aden triple
junction, which was formed during the opening of what are today the Red Sea and the
Gulf of Aden. As the Rift Valley approaches Djibouti, the western boundary faults turn to
a more northerly direction, forming the Afar and Danakil Basins.

The Danakil depression is some 120 meters below sea level and is east of the normal
fault zone that borders the Precambrian schists of the Tigray Greenstone Region. Major
potash deposits exist near mount Dallol within the Danakil depression. There are surface
deposits of salt and sulfur, shallow manganese deposits, and subsurface evaporite
deposits of potash salt.

The soda ash resource is located approximately 200 kilometers south of Addis Ababa.
The waters of Lake Abijata, Shala and Chitu have medium to high salinity and contain
sodium-chloride-carbonate. Soda ash is being produced from lake Abijata on a semi-
commercial scale.

Prospectus on mineral investment opportunities in Ethiopia are available in two volumes
and can be obtained on payment from the United Nations Development Programme

Mineral occurrences of the country is indicated in the annexed colour map.

4.7 Specific Project Opportunities

The following specific opportunities have been identified for foreign investment. More
detailed information is provided in separate fliers for each opportunity.

Please contact through the following address the Ministry of Mines and Energy for
further information.

Ministry of Mines and Energy

Mineral Operations Department

P.O. Box: 486

251-1-61 45 73

Fax: 251-1-61 45 74

251-1-61 51 30

Addis Ababa, Ethiopia

Table II

List of Foreign Mining Companies Currently Operating in Ethiopia

S. No.

Company Name

(owned by)

Mineral Type
Total License Area in Sq. Km.

Mining Licenses
National Mining Company
Saudi Arabian
National Mining Company
Saudi Arabain
Lime Stone
National Mining Company
Saudi Arabain
National Mining Company
Saudi Arabain
Exploration Licenses
Golden Star Resources LTD.
Canyon Resources Africa Ltd.
Roraima Mining Comp. Ltd.

Gold & Rare Metals

Tan Range Exploration Corporation
Precious and Base Metals

St. Genevieve Resources Ltd.
Precious and Base Metals
Canyon Resources Africa Ltd.
Gold and Associated
Asteria Srl.
Gemstone and Associated
Rift Resources
Precious and Base Metals
Prospecting Licenses
Diadem Resources Ltd.
Diamond, Saphire & Others
Canyon Resources Africa Ltd.


5.1 Ethiopian Petroleum Potential

The sedimentary regions of Ethiopia cover a significant portion of the country and
comprise five distinct sedimentary basins, namely: the Ogaden, BlueNile, Mekele,
Gambella and Southern Rift basins. The development of most of these basins is related
to the extensional geodynamic tectonics that have taken place intermittently since the
Late Paleozoic and continued up to the Tertiary.

The Ogaden, Blue Nile and Mekele basins are presumed to be cratonic rift basins
formed as a result of extensional stress induced by the break-up of Gondwanaland in the
Late Paleozoic. The Ogaden Basin, located in the area extending from the east to
southeast part of Ethiopia, is constituted of triaxially rifted troughs trending NW-SE, N-
S, and E-W. The Blue Nile (Abbay) Basin is a NW-SE trending branch of the Ogaden
intercontinental rift basin. Thick Permo-Triassic sediments, ranging from continental
fluviatile and deltaic clastics to marine argillaceous types, were deposited in the Ogaden
region in the early rifting stage. Equivalent sediments are also represented in the Blue
Nile and Mekele basins.

Continued large scale down wrapping of the entire East African continent took place
during Upper Triassic to Lower Jurassic time and fluvio-deltaic sediments were
deposited over a large area, extending up to the western and northern regions of Ethiopia.
Further rifting and subsidence of the region, including the Saudi Arabia and Yemeni
areas, led to the transgression of the sea from the east and southeast, flooding an
extensive area; this event is probably related with the tectonics of separation of
Madagascar from the Africa coast and evolution of the Indian Ocean. Marine sediments
varying from the Africa coast types, were deposited over a large area, although the
sedimentary facies were controlled by sub-basins formed by recurrent faulting and tilting
of fault blocks during the Jurassic. The NW-SE trending basins of Yemen and northeast
Somalia are believed to have been formed by the Jurassic rifting and subsidence events
in the Horn of Africa and southern Arabia.

The regression of the sea from the region began in the upper Jurassic as the result of
arching and doming of the Arabian-Somalian massif, and sediments of varying
facies(restricted marine, lagoonal and supra tidal to inter-tidal) were deposited in
structurally controlled domains. By the early Cretaceous, the sea completely withdrew
leaving behind regressive continental clastics, mainly consisting of sandstones.

The Gambella Basin is part of the Central African Rift System. The southern Sudan
basins and the Anza Basin of northern Kenya also failed in rift basins of the Central
African Rift System. The Gambella Basin is the southward continuation of the Melut
Basin of south Sudan and probably extends to join the Anza Graben in the southeast.
These fault-bounded basins, with a general NW-SE trend, contain thick fluviatile,
lacustrine to marine sediments reaching thicknesses of 6 to 10 Km.

Paleogene rifting, along with volcanism was responsible for the formation of the N-S
striking extensional rift basins of the southern Ethiopia, that are linked with similar
features in northern Kenya. Prominent among these rift basins are the Omo and Chew
Bahir basins; the former being more or less the northern continuation of the Turkana
Graben of north Kenya. The rift basins in the region are thought to contain
fluviolacustrine sedimentary strata not less than 3 to 4 Km in thickness.

Generally about 40 percent of the country is covered by sedimentary rocks of Permo-
Triassic continental to deep marine sediments and Cretaceous rift sediments and these
are prospective for petroleum resources.

5.2 Current Petroleum Exploration And Development Activities

The largest sedimentary basin with a commercial discovery of a gas condensate field, the
Calub Gas Field is situated in the eastern part of the country. The basin has an area of
350,000 Sq. Km. and sedimentary thickness of up to 10,000 meters. The reserve
potential of Calub gas field is proved to be 2.7 TCF and this resource is under
development for production.

The government has established Calub Gas Share Company with a large part of the share
belonging to the government. Now with its serious interest in involving private
investment in all economic sectors in the country, the government has decided to
privatize 100 percent of its share and actions are being taken towards this end.

Currently, one international oil company, Ethiopia Hunt Oil, has concession for
petroleum exploration in Ethiopia, and interests for exploration and development are
increasing as evidenced by the growing number of companies enquiring about petroleum

Recent assessment of the hydrocarbon potential of Ogaden Basin was included in the
study made by Alconsult International Ltd. on behalf of the Canadian International
Development Agency (CIDA). The study is part of a larger study, the East Africa
Regional Hydrocarbon Study which involves the participation of Ethiopia, Kenya,
Madagascar, Mauritius, Mozambique, Seychelles, South Africa and Tanzania. The
assessment proved that the Ogaden basin is reasonably a prospective area for petroleum

5.3 Potential Areas of Investment

a) The Ogaden Basin

The Ogaden basin is located in the southeastern region and occupies an area of 350,000
square kilometers. The basin is characterized by deep, asymmetrical grabens separated
by internal highs. The sedimentary succession reaches a thickness of 10,000 meters in
the deeper parts and is comprised of non marine to deep marine clastics, very thick,
shallow-to-deep marine carbonates and evaporites. Petroleum exploration activities in
the basin were carried out by a number of international companies during the last 37
years and it is found to be prospective for petroleum. And hence the basin has attracted
the attention of several companies involved in the oil industry.

b) The Abbay (Blue Nile) Basin

The Abbay Basin, which covers a large area over the central northwestern plateau of
Ethiopia, consists of a thick Mesozoic sedimentary succession exceeding 1600 meters in

Beds of marl, variegated shale and mudstone interbedded with carbonates, and marly
limestone-dominated beds in the lower part of thick limestone unit are potential source
rocks in the Abbay Basin. These beds have similarities to the Jurassic series of the
Middle and Upper Hamanlie, which in many instances have proven oil source potential
in the Ogaden.

The most potential reservoir rock in the Basin is the Upper sandstone which consists of
fine to medium grained, friable, moderately to well sorted sandstones, associated with
thin beds of conglomerates and claystones. Laterally restricted oolitic-reefal limestone
facies in the lower and upper-most parts of the Antalo Formation and dolomite beds
within the mudstone-dominated unit overlying the Antalo Formation might also be
considered as potential reservoir intervals in the Mesozoic sequence. The Antalo
Formation in the Blue Nile is equated to the upper Hamanlie of the Ogaden Basin. The
Adigrat sandstone remains a potential reservoir in the Blue Nile Basin, with
characteristic similar to those found in the Ogaden Basin.

Interbedded gypsum and shale beds within the unit that stratigraphically overlies the
Antalo Formation appear to be potential sealing rocks. Shale and clay intervals in the
upper part of the Adigrat formation could also serve as sealing rocks.

c) The Mekele Basin

The Mekele Basin has an aerial coverage of about 8,000 square kilometers and is located
in the northern part of the country. The thick Mesozoic sedimentary succession of the
basin comprises sediments ranging from fluvio-lacustrine to deep marine origin. The
whole sedimentary sequence reaches 2,000 meters in thickness.

The Upper Jurassic Agula Shale Formation, predominantly comprised of shale,
marlstone and variegated clay beds (with limestone and gypsum interbeds) is presumed
to have good source rock potential for hydrocarbons. The upper part of the Antalo
formation, composed of beds of mudstone, brown shale and greenish-black limestone
interbeds, could also be considered to be of potential source quality for petroleum

The transgressive to braided-fluvial sandy Adigrat formation, with a thickness ranging
between 150 meters to 600 meters of medium-to-coarse-grained, grayish-white to pink-
red sandstone (with intervals of silt, clay and shale) is potential reservoir; as it is in the
Ogaden and Blue Nile Basins.

Marl, shale and mudstone beds in the upper portion of the Antalo formation could offer
seal potential for any carbonate-reservoired hydrocarbons, or where laterally juxtaposed
against sandstone reservoirs as a result of faulting.

d) The Gambella Area

The prospectivity of the Gambella area for hydrocarbons needs to be viewed along with
the South Central Sudanese basins, which are renowned for oil pool discoveries. The
Gambella area is the south eastern extension of the Melut basin where two oil
discoveries (Adar and Yale) have been found. The source interval for hydrocarbons in the
Sudan basins is Lower Cretaceous sediments consisting predominantly of shale with
subordinate sandstone. Hydrocarbons source beds exceeding 1,800 meters thick were
deposited in lakes.

e) The Southern Rift Basins

The Omo and Chew Bahir basins lie within the broadly rifted zone of the southern
Ethiopia bordering northern Kenya. Both are extensional basins bounded by N-S striking
faults which are assumed to be younger features that cross-cut older NE and NW
striking faults of the area. The northern part of the Omo and Chew Bahir basins are
presumed to be northward continuation of the Oligocene rift system of north Kenya.
Organic-rich oilshale with an average oil yield of 8 lit/ton occurs in a regionally WSW-
ENE extending Tertiary basin in the northern part of the southern rift basin.

These five potential areas are indicated on a colour map which is annexed herewith.

5.4 Procedures for Acquiring a Petroleum License

An application in respect of a block will be presented in a sealed envelope. Application
may be made by a company or a group of companies. An applicant can apply for more
than one block at a time.

Application should be submitted in five copies to the Petroleum Operations Department,
Ministry of Mines and Energy, and should contain the following:

a) The identification of the block(s) for which the application is made;

  1. In respect of each applicant:

the name and address of the applicant in full;

the nature of its business;

the place of incorporation;

the principal place of business;

evidence of the financial standing and technical qualification and experience of the
applicant, including a copy of the most recent audited accounts of the applicant and any
body corporate having control of such applicant; and

the name and address of a duly authorized agent in Ethiopia, if such agent has been
already appointed by the applicant at the time of application.

(c) Where the application is made by a group of companies, information under paragraph
(b) will be provided by each company; the name of the operator and the participating
interest of each company will be also provided.

d) The terms proposed by the applicant in respect of the major aspects of the model

There is a model petroleum agreement in the form of production sharing contracts to be
signed by the government and the contractor.

Petroleum promotion document which describes each potential areas in detail can be
obtained from the Ministry on payment. Investors who would like to refer to this
document can contact:

Petroleum Operations Department

Ministry of Mines and Energy

61 45 23 or 61 45 22

Fax. 61 51 30

Addis Ababa



6.1 Energy Resource Potential

Similar to the promising geological environment, Ethiopia is endowed with a wide
variety of energy resources, both renewable and non-renewable. Ethiopia's renewable
resources include forest biomass, hydropower, geothermal, solar and wind energy.
Available data suggest that the major energy potential of the country lies in biomass and
hydropower, estimated at 1,405 Tons of Oil Equivalent (TOE) and 30,000 Megawatt
(MW), respectively. Electricity generation potential from geothermal energy is so far
estimated at 700 MW.

Hydropower is probably the most important source of energy in Ethiopia for many years
to come. All of the country
's basins have enormous potentials, though to varying
degrees, for the generation of electricity. The Omo-Giber River Basin has long been
recognized as an area with great potential for development. The Blue Nile Basin
provides ideal sites for hydropower generation on the upper plateau where good reservoir
sites with low evaporation losses have been identified. Probably, this Basin represents
the highest hydropower generation potential of the country with an estimated 10,000
MW of potential capacity. Other important basins having suitable sites for power
generation include the Tekeze River Basin, Baro-Akobo River Basin, Wabe Shebele
River Basin and Genale-Dawa-Weyib Rivers Basin.

6.2 Status of the Subsector

Despite the considerable resource potential, none of the above mentioned resources
has been exploited in substantial amount except for biomass. The hydropower
development contributes only 1% to the total energy production and virtually none of
the geothermal resources has been exploited. Currently measures are being taken by
the Government to exploit a very small portion of geothermal resources for electric
power generation and the power plant is planned to be commissioned in 1998.

For the great majority of the population, woody biomass is the only source of energy.
The modern segment of the energy sector is very small and relatively few people have
access to modern energy supplies. The total per capita consumption in 1995 was
estimated to be 0.29 Tonnes of Oil Equivalent (TOE) of which only about 0.02 TOE
were generated from modern energy sources (electricity and petroleum), while the
remaining was secured from wood and other biomass fuels.

The new energy policy, which was approved by the government recently, is now being
implemented with expectation to reduce the misuse of energy, pollution and imbalance
of natural resources. Among the objectives and priorities of the Energy Policy are:-

Following the policy, the government has revised the current legal and regulatory
framework of the power sector and finalized the "electric" law. To administer activities
related to electric power generation, transmission and distribution, Ethiopian Electric
Agency has been legally established by Proclamation No. 86/1997. The main objective
of the Ethiopian Electric Agency is to promote the development of efficient, reliable,
high quality and economical electricity services.

The Ethiopian Electric Power Corporation (EEPCO) is a state-owned corporation
responsible for generation, transmission, distribution and sales of electricity over the
entire country. Currently, EEPCO maintains two supply systems, the Inter-Connected
System (ICS) and the Self-Contained System (SCS).

The ICS, consisting primarily of the large hydro generating facilities, forms the national
grid and supplies Addis Ababa, Nazareth, Dire Dawa, Harar, Jimma, Shashemene,
Kombolcha, Dessie, Debre-Markos, Bahir-Dar and Gondar. The ICS is being steadily
expanded to incorporate many of the SCS centres.

The generating facility in the ICS consists of six hydro (Koka, Awash II and III, Tis-
Abbay I, Finchaa and Melka-Wakena) and two diesel (Dire Dawa and Alamaya) power
plants. The total installed capacity of the system is 378.1 MW. Of this total capacity,
only 6.5 MW is from the diesel sources. In terms of total installed capacity in the
country, the ICS represents about 93% of the total.

The SCS comprises local generation plants serving small isolated loads through local
sub-transmission and distribution networks. Even though mini hydro plants do exist in
the SCS, the supply is primarily based on diesel generation. The system has an aggregate
capacity of 32.9 MW of which 6.3 MW represents the mini hydro contribution, the
remaining 26.6 MW being diesel. The SCS comprises 7% of the total installed capacity.

The following table provides the installed capacity in MW of the two systems, i.e., ICS
and SCS.

Table III

Installed Power Generation Capacities








Diesel 6.526.633.1
Total 378.1 32.9 411.0

Transmission voltages of 230 KV and 132 KV and sub-transmission voltages of 66 KV
and 45 KV in both the ICS and SCS are used to transfer energy. The 45 KV level is being
abandoned in favor of 66 KV. The present network consists of 4,945 Kms of
transmission lines in total.

Power distribution occurs at 15 KV primary and 380/220 V secondary voltage levels.
The two systems consist of roughly, 7,770 km of the 15 KV lines, 4,162 distribution
transformers, and 5,880 km of 380 V low voltage lines. The following table provides a
breakdown of the distribution network for the ICS and SCS.

Table IV

EEPCO's Power Distribution Network


15 KV Lines




Total 7,770 4,174

EEPCO presently provides electricity to a total of roughly 500,000 customers in more
than 370 towns and communities throughout the country. Service is also provided
through self-help schemes and local municipalities though to a very limited extent. Of
the total number customers 92.2% are within the ICS and the remaining 7.8% within the
SCS. Currently, 5% of the population is estimated to have access to electricity.

Historical data indicate that the bulk of energy sales is concentrated in very few large
load centres among which Addis Ababa constitutes the largest portion. System losses,
as determined from generation and sales figures, stand at 19% which is roughly 271 Gwh.
Losses in the ICS and the SCS are 18% and 28%, respectively. The figures represent
both technical and non-technical losses and the major percentage is attributed to the
distribution network.

Several projects are presently at various stages of development in the power sector.
The projects will mitigate the short-term power and energy deficits within the ICS. A
total of Birr 9.0 billion has been earmarked for the projects which include the
rehabilitation and expansion of existing hydro power generating plants, the installation
of new hydro and geothermal power plants, and the rehabilitation and expansion of the
transmission and distribution networks. When completed, the projects will add a total
of 620 MW to the ICS capacity.

Until recently, EEPCO has remained the sole agency responsible for the supply and
distribution of electric power nationwide. However, according to recent policy reforms
and legal proclamations, the business of providing electricity service is not a monopoly
area anymore. The new electricity law
"Electricity Proclamation No. 86/1997" has
established a new common legal framework under which EEPCO and other operators
alike continue to function. This new legal framework lays the groundwork for promoting
development efforts in sector through, firstly, the provision of autonomy to EEPCO, and,
secondly, encouraging private investors.

Delineation of regulatory and operational functions under the new legal framework shall
ensure proper national control to customers in areas of safety and quality of service. Part
of the legal framework addresses tariff setting and approval processes with the aim of
ensuring that tariffs are regularly reviewed and adjusted to reflect economic and
financial objectives.

6.3 Potential Areas of Investment

Ethiopia has an enormous amount of hydropower resources. Slightly over 1% of these
resources has been put to use presently. The Government highly encourages foreign
investment in the area especially in putting up large-scale hydroelectric power plants
for sale of electricity in bulk to the existing national grid operated by EEPCO. In this
regard, several opportunities exist in the different river basins mentioned above. Some
of these opportunities involve small-scale hydroelectric power plants with capacities in
the order of 30 MW or less. A good number offer possibilities for installing medium (30
MW - 100 MW) and large-scale (greater than 100 MW) power plants. There are a
significant number of reservoir sites with possibilities for generating 600 MW - 1,000
MW of power.

The domestic demand for electricity has been growing, on the average, at 10% per year.
Additional generating capacities should be provided from time to time to meet this ever
growing demand. Other than the domestic market, there are good prospects for
exporting electric power to neighboring countries including Eritrea, Kenya, Djibouti
and the Sudan. Suitable sites in close proximity to these countries may be selected for
developing export-oriented hydroelectric power plants.




1. Project title: Dallol Potash Development

2. Location of the Project: The Dallol potash deposit is located in the Danakil
depression, in the Afar National Regional State. The Project area is 110
meters below sea level.

3. Project Summary: The existence of potash was first noted in 1901.
Between 1901 and 1972 a succession of seven companies had taken
concessions in different parts of the area for exploitation of potash, and
sometimes magnesium from the hot brines and sulfur. In the period
between 1949 and 1954 one of the companies is reported to have exported
about 70,000 tons of potash. The most extensive work on potash was
carried out by the Ralph. M. Parsons company between 1954 and 1968.

The work has resulted in the definition of proven 66.3 million tons of potash
together with further possible and probable of 32 and 61.9 million tons,

The Ralph M. Parsons company abandoned its concession when its
underground works were flooded by ground water.

In 1982 a joint venture company, Ethio-Libyan joint mining company took a
concession in the area with the intent of carrying out a feasibility study and
eventually entering into mining and refining potash.

The feasibility study has been planned to be carried out into two phases.
During the first stage of work of the first phase the following has been
carried out:-

examination of all technical information available in the reports of previous

confirmation of the ore reserve in the quantities that have been established

confirmation of the existence of a mining technique that is appropriate to the
ore body and

determination of any additional geological exploration work that may be
necessary. As the result of the work of this first stage of the first phase of the
feasibility study the ore reserve estimation has been confirmed.

It has also been concluded that 35 million tons of kyanite is also available for
open cast mining. Laboratory tests have shown that the sylvanite part of the
ore body can appropriately be mined using solution mining technique.

Phase two of the feasibility study was concerned with the finalization of the
economic and technical evaluation of the project study and preliminary
design of the mine, refinery, production transport and other support facilities

4. Project Documents Available:

The project had been thoroughly studied. The documents currently available
in the Ministry include the above mentioned various studies made on the
deposit and market feasibility study made on Potash, financed by the
Economic Commission for Africa (ECA), which might require updating of
the information.

5. Contact Person

Ministry of Mines and Energy

Mineral Operations Department

PO. Box 486

Tel 61 45 73

Fax 61 45 74 or 61 51 30

Addis Ababa, Ethiopia

Soda Ash

1. Project Title: Soda Ash Industrial Plant

2. Location of the Project: Abijata, in the rift valley, Southern Peoples
Regional State about 200 Km from the capital, Addis Ababa. There is
Asphalt road that leads to the proposed project area.

3. Project Summary: The Ethiopian Rift Valley lakes are known to be rich in
Soda Ash. The reserve is estimated to be 400 to 500 million tons of
contained Soda Ash, and their development is expected to have a
significant contribution to the economic development of the country. A
feasibility study had confirmed that the development of Soda Ash
potential of the lakes; especially Abijata and Shalla Lakes, can be taken
undertaken in three stages:

Stage 1: a semi-industrial plant of 20 thousand tons of annual capacity.

Stage 2: an industrial plant 200 thousand tons annual capacity.

Stage 3: a layer industrial plant of up to 1.2 million tons annual capacity.

As a result of the feasibility study, Ministry of Mines and Energy decided to
initially construct a 20 thousand ton annual capacity semi-industrial plant
and the plant design and construction supervision was carried out by Giulini
Chemie (GCG) which is a subsidiary of Israel Chemical Projects (ICP).

The construction of the 20 thousand tons capacity plant was completed at the
end of 1989 and production is under way.

4. Project Document Available: The above mentioned feasibility study and
the geological exploration works report done on the area are available.

5. Contact Person

Ministry of Mines and Energy

Mineral Operations Department

PO. Box 486

Tel 61 45 73

Fax 61 45 74 or 61 51 30

Addis Ababa, Ethiopia


1. Project Title: Diatomite Evaluation and Development project

2. Location of the project: The project is located in Oromia National
Regional State, 170 km. South of Addis Ababa and 7 km. west of the
Adamitulu town.

3. Summary of the Project: The deposits are found in the township of
Adamitulu. The deposits are compact, impure and Miocene to Lower
Pleistocene age. All the deposits are of lake origin. In most of the deposits
the diatomite is found associated with bentonite clay and volcanic ash.

A systematic exploration program for diatomite was started in 1981 and
more than 15 deposits and occurrences were investigated. Six deposits with

high quality and optimum reserve were studied in detail.

Geological works done on the deposit

Deposits Pitting Sampling Mapping
Adamitulu 23 pits dug with pitting interval 100-200m 40 samples collected and analysed technological tests carried out. mapping at 1:2000 reserve were calculated
Chefe Jilla 33 pits dug with pitting interval 100m 53 samples were analysed, technological tests carried out Mapping at a scale 1:2000 reserve calculation
Gedemotta 98 pits dug with pitting interval 200-800m 658 channel samples analysed, technological tests carried out Mapping at a scale 1:2000 and 1:5000 reserve calculation

As can be seen from the above summary table detailed exploration of the
deposits has been done. In addition to these preliminary market survey has
been carried out and technological tests have been conducted in a
Czechoslovakian testing center and the products thus obtained were proved
to be of applicable for the industry.

4. Project Documents available: The detail geological exploration
information, the preliminary market study documents are available in the
Ministry of Mines and Energy.

5. Contact Person

Ministry of Mines and Energy

Mineral Operations Department

PO. Box 486

Tel 61 45 73

Fax 61 45 74 or 61 51 30

Addis Ababa, Ethiopia


1. Project Title: Bentonite Evaluation and Development Project

2. Location of the Project: The deposit is located in different parts of the
country. The locations are Gewane, Mille and ounda Hadar in Afar
Regional National State, Lake Abaya, Gidicho island.

3. Summary of the Project: The deposits are part of the thick sequence of
lacustrine and reverine clays, silts sands and calcareous grits, gravel
conglomerates and halites interbedded with basalt and ash beds. The
sediments were deposited near the western margin of the southern part of
Afar Depression which throughout are late tertiary and quaternary.

A systematic geologic exploration and mapping along a total of 50 parallel
profiles using air photos, 262 samples for chemical and physical tests and 27
technological samples were collected and tested. As in the case of diatomite
preliminary market survey has been carried out and technological tests have
been conducted in a Czechoslovakian testing center and the products thus
obtained were proved to be of applicable for the industry.

4. Project Documents Available: Documents are available for the above said
tests and report on detail exploration works.

5. Contact Person

Ministry of Mines and Energy

Mineral Operations Department

PO. Box 486

Tel 61 45 73

Fax 61 45 74 or 61 51 30

Addis Ababa, Ethiopia

Coal and Oilshale

1. Project Title:- Delbi - Moye Coal and Oilshale Project

2. Location of the Project:- The Delbi- Moye area is located at about 50 km
south of Jimma town in Oromia National Regional state, which is close to
the urban center and is accessible by four wheel drive.

3. Project Summary:- Geological investigation for coal of economic potential
has been carried out on coal occurrences of Delbi - Moye, Mush valley
(North Shoa), Chilga (Gondar), Nejo (Wollega), as well as in many other
sites. Among the coal occurences some have shown economic importance,
of these the Delbi - Moye and Mush deposits are the most promising
deposits, while few others such as the Chilga and Nejo deposits are
presumed to possess some economically exploitable portions.

Geological exploration work, from reconnaissance through regional to detail
mapping and preliminary to detail prospecting have been undertaken
successively in the project area. The results of the study were encouraging to
start subsurface study into two steps, preliminary and detail prospecting
stages. The potential area, where economical coal and oilshale resources
expected to occur were delimited using prospecting criteria and a total of 18
bore holes were sunk.

4. Project document available: Relevant documents are available at the
Ministry of Mines and Energy.

5. Contact Person:

Ethiopian Geological Surveys

P.O. Box 2302

Tel 15 91 72

Addis Ababa, Ethiopia


1. Project Title: Yubdo Platinum evaluation and development

2. Location: Yubdo Platinum deposit is located in the Oromia region at 520
kilometers distance from the country's main capital, Addis Ababa. About
60% asphalted road and the rest gravel road makes it accessible at all
seasons of the year.

3. Project Summary: Platinum metal has been mined in Yubdo since ancient
times. It was believed by some authors that platinum from Yubdo may
have been a jewellery source for Egyptian Pharoanic kings. Despite this,
the first documented evidence of platinum occurrence at Yubdo was
reported by a Russian geologist, Kurmakove in 1925. E.W.Molly (1934)
first described on the geology of the deposit.

The first systematic prospecting work to assess the reserve of the deposit was
carried out by D.A..Jelence (1956 and 1966). During the same period
S.S.Augustithis (1965, 1967) made the study of the mineralogy,
geochemistry of the platiniferous dunite-birbirite-pyroxenite complex of
Yubdo/Birbir and on the origin of "platinum nuggets" in lateritic covers from
ultrabasic rocks. B.Megersa (1965) estimated the reserve of platinum in
Yubdo based on some drilling works and mining data collections. Rudis
organization of Yugoslavia (1965) dug 147 pits and came up with platinum
grade ranging from 0.019 gm/m
3 - 0.144 gm/m3 .

During periods between 1967-1972 a joint UN-Ethiopian mineral survey
team produced geologic map o the area at a scale of 1:30000. The same team
also produced a map of total magnetic field, as well as maps showing the
distribution of Cu, Ni, Zn, and As in the weathered soil.

Yubdo platinum deposit covers an area of 30 sq.kms. The deposit along side
platinum contains platinum group metals and some gold and iron in the
following proportios:- Platinum 77.6%, Osmium 1.7%, Iridium 0.6%,
Rhodium 0.7%, Palladium 0.3%, Gold 2.1% and Iron 15.2%.

Despite all differences in reserve content, all sources indicate the presence of
economic grade platinum in the area.

4. Project documents available: Relevant documents are available at the
Ministry of Mines and Energy.

5. Contact Person

Ministry of Mines and Energy

Mineral Operations Department

P.O.Box 486

Tel 61 45 73

Fax 61 45 74 or 61 51 30

Addis Ababa, Ethiopia


1. Project title: Bikilal Igneous phosphate project

2. Location: Bikilal is located in Oromia region, 464 kms. west of Addis
Abeba near Ghimbi. The target area is bounded by latitude 9 15'33'' and 9
20'36'' north, and longitudes 35
o51'42'' and 35o54'49'' east. The deposit
could be reached by an all weather road from Addis Abeba to Ghimbi and
a feeder road whichmay need regular repair from Ghimbi to Bikilal.

3. Project Summary: The Bikilal layered gabbro as a whole extends from
Bikilal to as far as south of Ghimbi for about 30 kms. distance. The
mineralized section which has been studied to date is in the elliptical part
("head") of the intrusive. The ore zone has 0.7-1.2 km width and about 10
km lingth. There are also scattered exposures of apatitie bearing rocks
throughout the extent of the intrusive.

The mineralization is represented by massive magnetite-ilmenite ore,
disseminated magnetite-ilmenite ore, and disseminated apatite-magnetite-
ilmenite ore. The iron ore, i.e. magnetite-ilmenite bodies, has average grade
of 41.0% Fe, 0.36% P
2 O5, 0.77% S, 16.72% TiO2 and 0.24% V2 O5. Total
reserves (C
1+C2) of iron ore are at 57.8million tons.

The phosphate resource which is composed of apatite, ilmenite and
magnetite has the following compositions and resources: 3.59% P
2 O5,
6.04% TiO
2 , 0.09%V2 O5 and 21.87% total iron. Reserves of the phosphate
resource is placed at 127 million tons of ore at inferred category.

4. Project documents available: Relevant documents are available at the
Ministry of Mines and Energy.

5. Contact Person

Ministry of Mines and Energy

Mineral Operations Department

P.O.Box 486

Tel 61 45 73

Fax 61 45 74 or 61 51 30

Addis Ababa, Ethiopia