Feb. 24, 2012
Ethiopia, Africa's second-most populous nation, wants to sell portions of its state-owned tantalum rare earth mine to foreign countries, and it wants investors from China, Sweden, Germany or South Korea to make a bid on it.
Ethiopia, which contributed 6 per cent to the total global tantalum production in 2009, according to data from the U.S. Geological Survey, is currently mapping out diversification schemes that will help wean its economy from dependence on exports earnings on coffee and other agricultural commodities.
Zerihun Desta, general manager of Ethiopian Mineral Development SC (EMDSC), told Bloomberg News proceeds of the sale of EMDSC will enable the government to pursue the expansion of the Kenticha mine as well as build a factory to facilitate the processing of the rare earth metal. No details, however, were provided as to how much stake ownership the Ethiopian government is willing to dispose in the sale.
"We are looking for a potential partner who has technology for the value-adding factory and also the economic capability," he said, noting investors from China, Sweden, Germany and South Korea have sent feelers for a potential joint venture with EMDSC. Mr Desta did not name the identities of the foreign companies.
He said tantalum is inexpensive to mine in Ethiopia because the rock around the deposit is very soft, a quality that could favorably interest the foreign investors. Plus, labor is "cheap" in Ethiopia, the EMDSC general manager added.
"This material is highly needed because the market for electronic products is growing," he said. "And the material itself is a rare metal. Accordingly, demand is always strong."
And regardless if global prices fluctuate, "if the price of tantalum goes down, we will be the last to close," he said.
The Kenticha mine, located 550 kilometres or 342 miles south of Addis Ababa, holds abundant deposits of tantalum, used in transistors for digital cameras, computers and mobile phones, that can help create as much as 9,000 tonnes of processed products over more than 15 years, Mr Desta said.
Other metals such as quartz, feldspar, kaolin and dolomite are also present in Kenticha mine, Mr Desta further noted.
Should it push through, the expansion of Kenticha mine may result to quadruple annual tantalum export revenue projected at $80 million, he said.
The Kenticha mine ranks as the world's sixth-biggest miner of tantalum, while EMDSC is Ethiopia's only commercial producer of the rare earths metal.
In the 12 months to July 7, majority or 80 percent of the 220 metric tonnes tantalum concentrate mined at Kenticha was shipped to China.