Vale South Africa Exploration Ltd, a subsidiary of Vale Inco Ltd, the second largest metal mining company in the world, has acquired an industrial mining exploration licence in the Southern Regional State upon depositing one million dollars in a closed book account, last week.
Vale Inco Limited, which is based in Australian, has 500,000 shareholders and a market capitalisation of around 160 billion dollars. It has acquired a 1,822sqm plot of land in Konso, Southern Regional State, 441Km from the capital. Vale is seeking to explore copper, cobalt and nickel, which are used as raw materials for industrial and food production industries.
The company is the second largest nickel producer, which is used to produce stainless steel aircraft, mobile phones and fertiliser nutrients. Vale acquired a prospecting licence to assess the region’s potential last year, before applying for the mining licence.
“Since there is no detailed geological data’s developed by the ministry, which requires heavy processing materials, the exact potential of the country is not known,” Gebre Egzihabher Mekonen, director of Mineral Operations at the Ministry of Mines (MoM), told Fortune.
“The area is not considered to be a particularly lucrative field for this type of mine exploration, but since the company has made its own study before acquiring licence, they might be successful,” Mekonen said.
Vale is the second company engaged in industrial exploration, next to BHP Billiton, a British company engaged in potash exploration on 17,000sqm in Dalol, Afar, located 603Km from the capital. The lack of road infrastructure has created a lag in exploration works.
MoM issues mining and exploration licences for five types of minerals, including, construction minerals which are to be used for construction purposes, such as limestone. Metallic minerals like tantalum, precious metals such as gold and platinum, and semi precious metals, like opal, are also mined and explored.
MoM has awarded 56 exploration licences and seven production licences, of which most concessions are located in Oromia and Benishangul Gumuz Regional States. Out of the licences issued, four of the concessions were given to local companies, including, Ambo Nymer Agro and Integrated Industries Share Company, MKB Geosystems Plc. The ministry, on the other hand, cancelled 17 explorations and two mining licences because they did not begin operation during the contract time.
The ministry has collected 104.4 million Br in the form of royalties from 26 companies. MIDROC Gold Mine Plc, which is one of the subsidiary companies under MIDROC Ethiopia, owned by Mohammed Al-Amoudi (Sheikh), has paid the highest amount in royalties, amounting to 100.1 million Br. The company in 1998 acquired Legedembi, which has a yearly average production of about 4,500Kg of gold-silver doré, with the average composition of 78pc for gold and 21pc for silver. The gold- silver doré has earned 1.9 billion Br by producing 3,025Kg of gold and 714.8Kg of silver during this fiscal year.
Ambo Mineral Water, which extracted 26.7 litres of water, and Afar Salt Manufacturing Share Company, which produced 125tn of salt, have also paid one million Br and 714 million Br, respectively, according to the report.
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