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MIDROC Gold Mine, Lege Dembi, Ethiopia


Description

Gold is Ethiopia's main mineral export and has been mined there since ancient times, primarily as alluvial or free gold. MIDROC Gold, one of the subsidiary companies administered under MIDROC Technology Group, acquired the Legedembi Gold mine from the government through privatization for 172 million dollars in 1997. Since 1998 the company has been mining gold and silver from the mine, located in the Oromia Regional State, Guji zone Legedembi locality 500km South of Addis Ababa. The Legadembi Gold mine has an installed annual production capacity of four tons of gold. It was an open pit mine but MIDROC Gold has built the first underground mine in the country and conducted various exploration activities to extend the economic life of the mine.  [1]Ethiopian-born Saudi billionaire Mohammed Hussein al-Amoudi owns the mine, which has been in operations for more than two decades. He was the second richest man in the Gulf and one of the Saudi billionaires and royals who were placed under house arrest in Riyadh late last year after Crown Prince Mohammed Bin Salman took swift measures to crackdown on corruption. In January 2018, he was transferred to a maximum-security prison. [2]

The deal between MIDROC and the government of Ethiopia two decades ago included a possible ten year extension. The company submitted the extension request to the Ministry of Mines, Petroleum & Natural Gas (MMPNG) in 2017, almost one year before the expiration of the previous one. Experts said that there would be no reason for the ministry to revoke the mining license since the company invested large amount at the Lege Dembi site. In the 2016/17 fiscal year, when the country exported close to six tons of gold to the international market the major share, which is about 4,023 kilograms (4.023tons) was exported by MIDROC Gold and the balance was produced by artisans. Besides Lege Dembi the company has undertaken several new exploration and production endeavors around the same area at Sakaro and achieved quite a bit. In 2012 National Mining Corporation (NMiC) another mining company owned by Ali Al Amoudi disclosed that it discovered a huge gold resource in Tigray and Beshangule Gumuz and was the other destination for MIDROC’S new gold production since the company announced it secured a huge reserved there.[3]

Local residents, farmers and pastoralists in the surrounding area have been complaining for a long time about alleged environmental pollution that was being caused by the chemical the company uses to process the gold ore. The residents claim that the chemical waste that is coming out of the gold was dumped into rivers used by residents and livestock for drinking water, which is polluting the area and causing health hazards. This situation has already affected their livelihoods.[4]The license had been suspended in 2017 after waves of protests in the region. [5]

However, the mine’s license was renewed in April 2018 for a decade and includes a provision to give 2% percent of profit to the local community. [6]Followed the April 27 report of the license renewal for MIDROC, a continuous resistance of the local community who claimed to be impacting negatively the lives of the people in the area was fuelled.[7]The communities have been saying that the chemicals used by the company to produce gold such as mercury have been making new born babies to be born with different kinds of deformities; the waste contain the toxin, cyanide and it is causing problems such as blindness, miscarriages and a birth defect where a baby’s head is smaller than expected when compared to babies of the same sex and age. Animals, especially cows, develop complications drinking the waste, which finally result in their deaths.[8]

Demonstrators had blockaded roads in the country’s unruly Oromia region since 30 April 2018, preventing people from going to work and forcing schools to cancel classes, asking the government to revoke the 10-year mining permit for MIDROC Gold, as it was a “mistake” to renew the license despite objections by the locals who said the project has not kept promises of providing basic services like building schools and health facilities.[9][10]It was reportedly said that the MIDROC Gold Company did not benefit the impoverished community in its 20 years of operation and brought little impact in changing the lives of the people in the area for good. [11]Hasan Yusuf of Oromia Environmental Protection and Forestry Bureau is one of the persons who opposed the renewal of license of Medroc Laga Dambi on environmental grounds. On a Facebook posting, he wrote that the “basic environmental compliance audit for license renewal failed to consider the environmental and social concerns that arise with the implementations of the mining operations.”[8]

Amid increasing anger, the protests in Shakiso and Adola areas of Oromia region in south-eastern Ethiopia are growing, some high school students skipped classes to join in the anti-mining protests, which have erupted periodically over the years [7], a general strike and widespread protests paralyzed Shakiso and Adola towns in 1 May and 2 May, and villagers cut on 2 May morning electric and water supply to the mine, halting production at Legadembi. Midroc in statement confirmed it has indeed happened, condemning as a hate-filled and senseless act. “A group that calls itself Guji Kero has been distributing flyers to all villagers, warning that Midrock should stop its production until May 8 or face harsh measures. The group then cut of electric supply by destroying the utility pole that carries the power lines to the mining site…” The newly appointed Minister of Defence Force and the former Minister of Mines, Motuma Mekassa was sent to the area on 30 April to have face-to-face talks with residents. Despite his appeal for calm, the Minister has not proposed any tangible solution, angering the residents. Security forces have used live bullets to disperse demonstrations, five people have been killed while many injured.[12]

Those killed are named Amanuel Amare, Tigist, Tesema Alambo, Ayenew Gobeze and Guta Dadhi. On May 7, at least one person was fatally injured when demonstrators marched to the local police station to demand the release of detained compatriots. At another protest in the afternoon, residents said police had used tear gas on protesters, some of whom blindly stumbled into the ditch. Police retrieved them and took them inside the station, noting that Red Cross workers who had shown up with stretchers initially were not allowed access. Seven people were injured and some of them transported to Adola and Hawassa hospitals, twenty people have also been arrested. [13]

The grievance and unrest triggered the Ministry of Mines, Petroleum & Natural Gas (MoMPNG) to suspend Midroc Gold Mine's license starting May 9, 2018. The ministry said the license will remain suspended until after an independent study involving several stakeholders is conducted in to the allegations of the health crisis. [14]The Ministry, in collaboration with MIDROC Gold, has hired Addis Ababa University to undertake a study the environmental concerns raised by the local residents. [1]

The mining sector in Ethiopia is a hotbed of corruption and hub for graft and fraud. The World Bank (WB) in its 2012 massive report “Diagnosing Corruption in Ethiopia” identified the mining sector as one of the most corrupt sectors of Ethiopia’s economy. According the WB, there are “seven areas of corruption risk” in the Ethiopian mining sector” including the “three main risk areas” of “license issuing, compliance with license conditions, and mining revenues”. [15]

Basic Data

NameMIDROC Gold Mine, Lege Dembi, Ethiopia
CountryEthiopia
ProvinceOromia Regional State
SiteLege Dembi, Shakiso Weredas of Guji zone
Accuracy of LocationHIGH local level

Source of Conflict

Type of Conflict (1st level)Mineral Ores and Building Materials Extraction
Type of Conflict (2nd level)Water access rights and entitlements
Mineral ore exploration
Mineral processing
Metal refineries
Specific CommoditiesGold
Silver

Project Details and Actors

Project DetailsMIDROC Gold Mine Pvt. Ltd. Co. (MGOLD), a member of the MIDROC Technology Group, is engaged in Mining and Exploration activities in Ethiopia. The company is actively involved mining gold while being engaged in exploration to find new gold deposits.

At present, Ethiopia has a single large-scale gold mine, the Midroc Gold Mine at Lega Dembi, which is an operating open pit mine in Ethiopia.

The mine was privatised and awarded to Midroc Ethiopia in 1997. A mining license was awarded and a new company – Midroc Legadembi Gold Mine Share Company (Minroc Gold) commenced production in August 1998. Average yearly production totals 4.5 t. The Lega Dembi deposit is the largest gold producer in Ethiopia. It is situated in late-Precambrian metamorphosed sediments of the N-S trending, volcano-sedimentary Megado belt, which forms part of the late-Proterozoic Adola granite-greenstone terrane in southern Ethiopia.

Gold is exported in Doré form to a refinery in Switzerland.
Level of Investment (in USD)172,000,000
Type of PopulationRural
Start Date2017
End Date2018
Company Names or State Enterprises Mohammed International Development & Research Organization Companies (MODROC) from Saudi Arabia - owner
Relevant government actors- Ministry of Mines, Petroleum & Natural Gas (MoMPNG, http://www.mom.gov.et/)

- Oromia regional state

- Oromia Environmental Protection and Forestry Bureau

- Ministry of Finance & Economic Development (MoFED)

- Oromia Environmental Protection and Forestry Bureau

- Addis Ababa University (evaluation of the environmental and health impacts after the protests)

- Ministry of National Defense Force

- Occupational Safety & Health Administration (OSHA)
Environmental justice organisations and other supportersRed Cross (not allowed to intervene)

Local groups (called Guji Kero)

The Conflict and the Mobilization

Intensity of Conflict (at highest level)HIGH (widespread, mass mobilization, violence, arrests, etc...)
When did the mobilization beginMobilization for reparations once impacts have been felt
Groups MobilizingFarmers
International ejos
Landless peasants
Local government/political parties
Neighbours/citizens/communities
Pastoralists
School children also on strike
Forms of MobilizationBlockades
Media based activism/alternative media
Public campaigns
Sabotage
Street protest/marches
Strikes
Appeals/recourse to economic valuation of the environment
Cut off power and water supply to the mine; blockade road to prevent people from going to work and force schools to cancel classes

Impacts

Environmental ImpactsVisible: Air pollution, Food insecurity (crop damage), Loss of landscape/aesthetic degradation, Soil contamination, Soil erosion, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion, Other Environmental impacts
Potential: Mine tailing spills
OtherSource water and the air pollution causing humans and animals respiratory illnesses, miscarriages, birth defects and disabilities
Health ImpactsVisible: Exposure to unknown or uncertain complex risks (radiation, etc…), Violence related health impacts (homicides, rape, etc..) , Other environmental related diseases, Other Health impacts
Potential: Deaths
OtherMercury and cyanide contamination. Respiratory illnesses, miscarriages, birth defects and disabilities
Socio-economic ImpactsVisible: Displacement, Loss of livelihood, Increase in Corruption/Co-optation of different actors
Potential: Increase in violence and crime, Lack of work security, labour absenteeism, firings, unemployment, Social problems (alcoholism, prostitution, etc..), Violations of human rights, Land dispossession, Specific impacts on women

Outcome

Project StatusIn operation
Pathways for conflict outcome / responseDeaths
Under negotiation
Violent targeting of activists
New Environmental Impact Assessment/Study
Project temporarily suspended
Do you consider this as a success?Not Sure
Why? Explain briefly.The renewed license was suspended, environmental investigation was undertaken, but there is still not clear result after the protest of April and May 2018 which was repressed (with several protestors killed and wounded, a at least twenty arrested)..

Sources and Materials

References

[15] (World Bank Report) Diagnosing Corruption in Ethiopia: Perceptions, Realities, and the Way Forward for Key Sectors
https://openknowledge.worldbank.org/bitstream/handle/10986/13091/699430PUB0Publ067869B09780821395318.pdf?sequence=1&isAllowed=y

Links

[8] Renewed protests in Oromia region around mining project
https://www.ethiopiaobserver.com/2018/05/02/renewed-protests-in-oromia-region-around-mining-project/

[2] Ethiopia suspends MIDROC Gold mining license after weeks of protests
http://www.mining.com/ethiopia-suspends-midroc-gold-mining-license-weeks-protests/

[4] MPs raise environmental concern over Midroc Gold, et al
https://www.thereporterethiopia.com/article/mps-raise-environmental-concern-over-midroc-gold-et-al

[5] Ethiopia: Massive protests in Oromia region suspend gold mining operations
https://libcom.org/news/ethiopia-massive-protests-oromia-region-suspend-gold-mining-operations-11052018://www.thereporterethiopia.com/article/mps-raise-environmental-concern-over-midroc-gold-et-al

[6] Ethiopians Protest MIDROC Gold Mining License Renewal
https://www.tesfanews.net/ethiopians-protest-midroc-mining-license-renewal/

[7] Mining Firm’s License Renewal Fuels Protests in Ethiopia
https://www.voanews.com/a/mining-firm-license-renewal-fuels-protests-ethiopia/4378439.html

[3] Despite success, MIDROC Gold Mine awaits license renewal
http://capitalethiopia.com/2017/11/20/despite-success-midroc-gold-mine-awaits-license-renewal/#.W1S6Qi2-vaY

[9] Protesters Demand Ethiopia Cancel Billionaire's Gold License
https://www.bloomberg.com/news/articles/2018-05-07/protesters-demand-ethiopia-cancel-billionaire-s-gold-mine-permit

[10] Protest against MIDROC gold continues in Southern Ethiopia
https://ethsat.com/2018/05/protest-against-midroc-gold-continues-in-southern-ethiopia/

[12] Five people killed in Legadembi gold mine protest
https://www.ethiopiaobserver.com/2018/05/09/five-people-killed-in-legadembi-gold-mine-protest/

[11] Ethiopia Revokes Gold Mining License Of MIDROC Gold
https://newbusinessethiopia.com/ethiopia-revokes-gold-mining-license-of-midroc-gold/

[14] Ethiopia: Ministry Tosses Midroc's License
https://allafrica.com/stories/201805150164.html

[13] Ethiopia Agrees to Suspend MIDROC Gold Mining After Protests
https://www.voanews.com/a/ethiopia-agrees-to-suspend-midroc-gold-mining-after-protests/4387085.html

[1] MIDROC Gold in hot water as crisis reaches climax
https://www.thereporterethiopia.com/article/midroc-gold-hot-water-crisis-reaches-climax

Media Links

Protest Against MIDROC GOLD 5/ 7/ 2018
https://www.youtube.com/watch?v=Hnzw5T3xO8s

Oromia-Ethiopia: Wikileaks – Govt’s Crackdown on Oromo on Behalf of MIDROC Gold During Shakiso/Guji Protests of 2009 (first posted on Finfinne Tribune and Gadaa.com on September 15, 2011).
https://oromialandinfo.wordpress.com/2013/04/04/oromia-ethiopia-wikileaks-govts-crackdown-on-oromo-on-behalf-of-midroc-gold-during-shakisoguji-protests-of-2009/

Other Documents

Protest
https://file.ejatlas.org/docs/3_Protest.jpg

affected children
https://file.ejatlas.org/docs/1_Children.jpg

Map of Zones in Oromia, Ethiopia
https://file.ejatlas.org/docs/ethiopia_地图.jpg

Gold mining
https://file.ejatlas.org/docs/2_ethiopia-suspends-midroc-gold-mining-license-after-weeks-of-protests.jpg

protest against the renewal of Midroc Gold Mine's license
https://file.ejatlas.org/docs/4_midroc_protest.jpg

Meta Information

ContributorEnvJustice, ICTA-UAB/source from POLLEN Oslo
Last update28/07/2018

Images

 

Protest

 

affected children

 

Map of Zones in Oromia, Ethiopia

 

Gold mining

 

protest against the renewal of Midroc Gold Mine's license