Ethiopian Junior Gold Miners See Major Gains

Source:

"Production exceeded government expectations by 56%."

Ethiopia's small-scale independent gold producers exported 2,731 kg of the yellow metal during the six months to December 2010, earning the Horn of Africa country $114 million.

The period's production represented an increase of 689 kg from the 2,042 kg produced from July to December 2009.

Mines Minister Sinkinesh Ejigu says the $114 million earned from gold exports during the second half of last year exceeded government expectations by 56%. "This is a very encouraging result that has made us revise and increase our five-year gold production target for independent miners," the minister said.

She adds that production by independent miners is now close to the quantity produced by Midroc Gold Mining, the leading gold producer in the country, which owns the Legedembi gold mine.

Ejigu says the Ethiopian government expects gold production by independent miners to double .

Over the past two years, Ethiopia has witnessed a significant rise in earnings from gold exports from $105 million in 2008 to $300 million in 2009, after the introduction of incentives like low royalty levels and exemption from customs duty and taxes on equipment for mining operations.

The country, which is believed to have about 500 tons of gold reserves, says 30 Ethiopian and international companies are exploring for the resource. It has put in place measures to ensure the mining sector accounts for 10% of gross domestic product in the next five years.

Currently, the mining sector is Ethiopia's second-largest foreign exchange earner, after the agriculture sector, which rakes in about $400 million a year.

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