Kefi Gold Onboards Investors Amidst Financial Crunch

A London listed company prospecting for gold in Tulu Kepi, Oromia Regional State, has been saved from financial woes after securing additional financing from Africa-based financial institutions and support from the federal government in the form of infrastructure provision.

The Trade & Development Bank (TDB) has committed 70 million dollars in loans, while a similar financial pledge has been made by the Africa Finance Corporation (AFC), according to Harry Adams, executive chairman of Kefi Gold.

The Tullu Kaapi Gold Mine Share Company, a subsidiary of the UK Kefi, raised 300 million dollars from the Ethiopian government, banks, and investors for its bid to explore gold in the region, a relief for its management, which has been working under a tight liquidity crunch with 60 million dollars invested thus far. Along with its operations in Saudi Arabia through its investment wing, ARTAR, Kefi registered 56.6 million dollars in losses last year, according to the company's consolidated financial report.

For nearly five years, prospective investors have been reluctant due to security concerns in the area.

Dissatisfied by its progress, the Ministry of Mines & Petroleum warned the company over the delay of the gold exploration project, a series of setbacks Kefi's management attributed to security concerns and the consecutive declarations of a state of emergency in the country since 2016. Two years ago, Tullu Kaapi faced an attack by an unidentified armed group that raided the camp, forcing it to halt operations until security issues were cleared.

The main cause of delay for mining projects like Kefi is a lack of coordination between the federal and regional authorities, Begosew Abate (PhD), a mining expert with three decades of experience in the sector, serving various companies as a consultant, said.

Directions given by the federal authorities are often not translated in the regions, according to Begosew.

Though the financial institutions were hesitant to disburse the funding following a series of conflicts in the country, the management of Tullu Kaapi hopes to see the loans released soon.