UK-based mining company KEFI Mineral on Monday signed a gold and silver production agreement worth $151.6 million with the Ethiopian government, the Turkish Weekly reported.
The 20-year deal will see KEFI take over exploration rights for the Tulu Kapi project in the Oromia region from Australia’s Nyota Minerals Ltd. The company aims to produce 28.6 tons of gold over 11 years with production starting in 2017.
Chairman Harry Anagnostaras-Adams said “2016 will be the year of construction.”
“We hope this mining of gold and silver will contribute to our national economy, especially in foreign currency,” Reuters quoted Mines Minister Tolesa Shagi saying.
“The company fulfilled an international standard that enables it to undertake production of the two minerals in the country,” he added.
Ethiopia already has one gold mining belt in Lege Dembi southeast of Addis Ababa. Mining in the Lege gold belt is run by Midroc, a company owned by a Saudi-Ethiopian businessman Mohammed al-Amoudi.
The east African nation earns about $500 million from gold mining and export each year and the commodity is the second largest hard currency earner for the country after coffee.
Shangi said he expected KEFI to deliver revenues of $1.6 billion to the state over 11 years, that is an additional $145 million every year.