Ethiopia is a significant producer of gold and limestone, and also produces smaller quantities of tantalum, salt and pumice. The latest EITI reporting shows that the mining sector accounted for 1% of total exports and 14% of total employment in 2019. Oil and gas exploration activities are ongoing, although no commercially viable discoveries have been found to date.
Ethiopia EITI aims to help the government reform the mining sector to maximise profits from Ethiopia’s significant mineral reserves. EITI reporting has helped inform government policies on artisanal and small-scale mining, licensing transparency and gold mining.
EITI reporting has improved transparency of artisanal and small-scale mining with disclosures on production data by volume and value from artisanal and small-scale miners that trade formally.
EITI reporting has contributed to strengthening government oversight of mining licensing processes, resulting in the cancellation of mining rights for licensees not meeting license conditions.
Extractive sector data
Production and exports
Top paying companies
Extractive sector management
Tax and legal framework
Ethiopia’s mining sector is governed by several mining proclamations and regulations. Ethiopia has a federal system of administration with regional governments overseeing the governance of regions. The extractive sector is mainly regulated by the Ministry of Mines and Petroleum (MoMP), which grants mining and petroleum licenses and oversees exploration and development activities. Regional governments’ Finance and Mines Bureaus collect license fees, royalties, land rents, signature and production bonuses, training fees and community development funds.
Ethiopia operates a royalty tax model fiscal regime. Beside a royalty rate ranging from 2 to 7%, the three main taxes and fees imposed on mining companies include income tax, customs duties and signature bonuses. The Ministry of Revenues (MoR) collects extractive tax revenues, while the Ministry of Finance, which collects and accounts for revenues from the 5% of the government’s participation interest in mining operations.
Licenses and contracts
Mining rights are awarded on a first come first served basis. Mining legislation allows the Ministry of Mining and Petroleum to enter into agreements for prospecting, exploration and production. Production sharing agreements define conditions for hydrocarbon exploration and extraction and are obtained through direct negotiation with interested companies.
Contracts are currently not made public in Ethiopia. The country has a public mining cadastre, hosted by the Ministry of Mines and Petroleum.
Ethiopia does not have a legal framework mandating the disclosure of beneficial owners. The country has been using EITI reporting to disclose beneficial ownership data for extractive companies, including level of ownership and nationalities, however not all companies provide the names of beneficial owners. Ethiopia EITI plans to continue advocating for legal reform on beneficial ownership transparency.
Given that Ethiopia has a federal system, regional governments directly receive royalties, excise taxes, land rentals, license fees and personal income taxes from extractive companies operating in their regions. They also receive revenue allocations from the Ministry of Mines and Petroleum (MoMP).
The Ministry of Mines and Petroleum also manages a Petroleum Training Fund – funded by training fees from oil and gas companies – intended to finance capacity building activities in the oil and gas sector.
Ethiopia EITI is administered by the Ethiopia Multi-Stakeholder Group (MSG), also known as the EITI Board, which is hosted by the Minister of Mining and Petroleum. The MSG is chaired by the Minister of Mining and Petroleum, HE. Takele Uma. The MSG is comprised of members from government, industry and civil society, as follows:
Government is represented by the Ministry of Mining and Petroleum, the Planning Commission, National Bank of Ethiopia, the Customs and Revenue Commission, Ministry of Finance and the Ministry of Trade and Industry.
Industry is represented by Midrock Gold Company, Dangote Cement, Ascom Company and Derba Cement.
Civil society is represented by the Consortium of Christian Relief and Development Associations, Bio-economy Africa, Pelum Ethiopia, the Ethiopia Wetland Natural Resource Association and the Population Health and Environment Ethiopia Consortium.
Ethiopia was found to have made meaningful progress in implementing the 2016 EITI Standard in February 2019, following its first Validation. The Validation identified 18 corrective actions to be addressed by the country’s next Validation, expected to commence in January 2022.