Akobo Minerals paves the way for a resurgent Ethiopian mining industry clearing a major hurdle for investors being granted the right to hold and repatriate foreign currency from offshore accounts
On the 30th of September, Akobo Minerals and the Ministry of Mines and Petroleum (MoMP) entered into an agreement governing the future mining of the Segele project, and also opening up the Ethiopian mining sector by agreeing to the right to hold foreign currency on offshore accounts, and to repatriate profits from the same accounts. This has been the most difficult hurdle in attracting international investors to Ethiopia’s mining sector. Akobo Minerals is very proud to have been able to work closely with the MoM to make this possible.
The agreement covers vital aspects of the mine development and operation. In addition to other rights and obligations, Akobo Minerals has secured new terms which promote valuable investment partnerships with Ethiopia, including:
- The right to hold proceeds from sale of gold in overseas USD bank accounts
- The right to freely repatriate profits from overseas USD bank accounts
- The right to a 5 year Mining Licence covering 16 square kilometres of the Segele mineralisation and other promising targets – extendable in 10 year increments
- Key clauses include
- Begin development and production programmes within 60 days and 15 months respectively
- Right to sell gold freely in international markets
- Payment of 5% Royalty to the Federal Government
- Payment of 7% free carried interest in the mining project
Akobo Minerals would like to congratulate H.E. Eng Takele Uma (Minister for Mines and Petroleum) in his mission to transform the Ethiopian mining sector into a competitive, proactive and attractive sector for international investments. By creating more transparency and supporting law abiding investors whilst also implementing new international standards making it easier to repatriate profits for mining and companies, the Ethiopian mining industry is now on track for a bright future.
Chief Executive Officer, Jørgen Evjen said:
“We are excited to have reached the stage of receiving a mining license, it is a credit to all the hard work that has been laid down over many years. I am impressed also by the changes seen with the Ministry of Mines over the last year, transformed into a partner open to find good solutions. Probably the most important hurdle for opening up the mining sector in Ethiopia has now been solved by introducing international mining standard for repatriation of profits, and also to seek competitive terms and conditions compared to other neighbouring countries.”
As part of the Mining Agreement, the company has committed to develop the Segele Mine in-line with the plans released previously (see press release, 27th September 2021). Akobo Minerals has a drilling program underway to extend the known mineralisation and in line with this, the mining agreement provides the right to extend the mining licence upon continued economic viability of the mine and fulfilment of all legal and contractual obligations.
As is normal for mining licences, the Ministry retains the right to withdraw the mining licence upon failure to perform as pursuant to Ethiopian Law.
For more information contact
Jørgen Evjen, CEO
Mob.: (+47) 92 80 40 14
About Akobo Minerals:
Akobo Minerals, is a Norway-based gold exploration company, currently with ongoing exploration and small-scale mine development in the Gambela region and Dima Woreda, southwest Ethiopia. The operations were established in 2009 by people with long experience from the public mining sector in Ethiopia and from the Norwegian oil service industry. Akobo Minerals holds a mining licence and an exploration license over key targets in the area. Economic mineralisation was discovered and the company is engaged in mining studies to advance the project to production, alongside exploration core drilling. Akobo Minerals is transforming its organisation to support an increased pace of core drilling. At both the key targets Segele and Joru the company has so far released exceptionally high-grade gold results including the Segele deposit with an Inferred Mineral Resource of 78ktons at 20.9g/t. A scoping study for Segele includes an up-front capital expenditure of USD $8m and all-in sustaining cost of USD $243 per ounce of gold produced. Core-drilling and trenching at Joru have intersected both high-grade gold zones and large wide zones near surface. The company has an excellent partnership with national authorities and places ESG at the heart of its activities – a ground-breaking community program is being planned.
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