Commission to Unravel Mining Industry Muddle

Concerned with the ever declining revenues from the export of minerals, the government has started surveying five regional states endowed with rich mineral deposits.

Aimed at preventing corruption practices in the mining sector, the study was initiated two months ago by the Corruption Prevention Department of the Federal Ethics & Anti-Corruption Commission and is expected to be finalised by the end of the current fiscal year.

Shire of Tigray, Shakisso in Oromia, Belles in Benshangul Gumuz, Walda-Delanta in Amhara and Benchmaji in Southern Nations Nationalities & Peoples' Regional State are five areas selected for the survey, based on recommendations made by the Ministry of Mines & Petroleum and the Geological Survey of Ethiopia.

Gold, silver, tantalum, gemstones and marble are among the minerals to be assessed in the survey to determine the current level of corruption and to draw preventive measures. Minimising crimes of corruption in the industry is the expected primary outcome of the survey, according to Tesfaye Shambo, director of reform and good governance at the Commission.

The Governance & Democratic Participation Programme, a project under the United Nations Development Program (UNDP), covered the 400,000 Br budget for the project with funds secured from donors including Sweden, Norway, Denmark and Austria.

A local consultant, Gideon G. Jalata, was hired to conduct the study, according to Tesfaye.

"The consultant has started data collection to conclude the report," Tesfaye told Fortune.

The mining value chain starts from contract negotiation and exploration; transitions to construction and development of a mining site; evolves to production, monitoring of operation and the collection of taxes; involves transportation and trading; reaches the smelting and refining stage; and finishes with marketing, revenue management and investment.

For the past couple of years, the export revenue in the country has been continuously dwindling. In the first three quarters of the current fiscal year, the export of minerals generated 39.6 million dollars, while the government targeted to earn 766.9 million dollars in export revenues this year.

The findings of the study will help both the public and private players in the mining sector make informed decisions, according to Tesfaye.