The country’s geology offers extraordinary potential for exploration and development. Endowed with metallic minerals gold, platinum, iron, nickel, chromite and base metals, fertilizing minerals and so on.
The good news for investors is that significant gold mineralization has been discovered in three other areas: the Western, Northern and Southern greenstone belts. In the Western greenstone belts, the most promising gold showings are located in the Tulu-Kapi and Ankore areas. In the northern belts, the Terakimiti prospect, where trenching and drilling have revealed grades of up to 16 grams per tonne, offers the greatest potential. The deposit contains an estimated 20 million metric tons of ore.
There are already two gold mines in the Adola gold belt in the Oromia region. The Legadembi mine is the only gold mine in the country to operate on an industrial scale. It has two production sites – an open-pit and an underground mine. Operated by Midroc Investment Group , Ethiopia’s largest business entity, owned by Mohammed Hussein Al Amoudi, a Saudi-Ethiopian businessman. However, between 2018 and 2021, mining operations were suspended by the Ethiopian authorities due to the release of hazardous chemicals. In addition, the Sakaro mine, an underground mine located in the Gujji area of the Oromia region, is in operation. It currently has gold resources of 708,770 ounces at 14.14 grams per tonne.
The Adola belt is also home to the Kenticha tantalum-lithium mine, which has already produced 120,000 tonnes of tantalum pentoxide and has a large hard-rock lithium deposit. It hosts one of the world’s largest tantalum resources, with a probable reserve of 17,000 tonnes. It could produce up to 9,000 tonnes of processed tantalum products over the next 15 years. The deposit is operated by Kenticha Mining, a joint venture between Oromia Mining Share Company and Abyssinian Metals. In July 2024, the Ethiopian government threatened to withdraw the company’s operating license due to delays in starting production.
Investors may also be interested in epithermal gold, a type of gold deposit formed from hydrothermal fluids at shallow levels of the earth’s crust. A low-grade epithermal gold deposit has been discovered at Tendaho, in the Afar region of the East African Rift Valley.
Potash is attracting investor interest. Potash deposits are scattered across the northern, central and southern regions of the country. However, one area is of particular interest: the Danakil depression in the far north of the country. Danakil lies at the junction of three tectonic plates and was formed when the African and Asian continents drifted apart. This caused fissures and volcanic activity, resulting in a complex geology. The salt formations on the surface cover an area of around 1,170 km², but only a small fraction has been explored. The Danakil potash mine is a major mining project being developed by Allana Potash, a mining company listed on the Toronto Stock Exchange. It is set to become one of the world’s largest and lowest-cost potash mines, producing around 2.4 million tonnes of potash per year, making it one of the country’s most important mining projects.
Currently, mining contributes very little to the country’s GDP (just 1%). The sector has incredible potential, but political instability is the main obstacle to its development. Ethiopia’s economy continued to grow strongly even during the conflict, and has rebounded vigorously since its end. Total GDP more than doubled to $205 billion in 2024, up from $96.6 billion in 2020, according to the IMF. Economic growth averaged 6.9% a year between 2019 and 2023. The IMF forecasts economic growth of 6.23% this year and 6.49% in 2025.
The country is the second fastest-growing in Africa after Côte d’Ivoire, with 6.6%. The government itself is forecasting even higher growth (7.9%) for the 2023/2024 financial year, which ended on July 7, 2024. Ethiopia’s mining sector offers considerable potential, thanks to the country’s extraordinary mineral wealth and favorable business investment environment. The end of the Tigray war has opened up numerous opportunities. New mines are being planned, and the sector could make a greater contribution to GDP. However, it is essential that mining is carried out responsibly. In addition, the country’s major infrastructure challenges need to be addressed if the sector is to begin to exploit its potential.
