A brief note on the Mining laws of Ethiopia. Mining Law in Perspective
Mining in Ethiopia: Mining Law in Perspective
Mining is one of the best areas of investment in Ethiopia. If you wonder to know the legal
requirements of mining investment in Ethiopia here are the details.
According to the information released by the Ethiopian Investment authority, Ethiopia
offers excellent opportunities for mineral prospecting and development. There is favorable
geological environment hosting a wide variety of mineral resources. The following are some
1. Ethiopia?s green stone belts offer one of the finest areas for gold mineralization any
where in the world, and more than 500 metric tons of gold deposits have already
been identified by exploration. Precious and metallic minerals such as tantalum, and
2. Industrial and construction minerals such as kaolin, diatomite, feldspar, quartz, silica
sand, potash, phosphate, soda ash, salt, rock salt, limestone, marble and granite;
3. Energy minerals including coal, oil shale, natural gas and to spring have also been
identified in various parts of the country;
4. With regard to fossil energy resources, there are significant opportunities for
extracting oil and natural gas in the four major sedimentary basins, namely the
Ogaden, the Gambella, the Blue Nile and the Southern Rift Valley.
In Ethiopia mining activity can be carried out by any kind of business, whether an Ethiopian
or a foreign company, registered and licensed in Ethiopia. Under Ethiopian law there are
four modes of doing business. These are;
1. Sole proprietorship
2. Business organizations incorporated in Ethiopia or abroad
3. Public Enterprises established in accordance with the relevant law
4. Cooperative societies formed in accordance with the relevant law
Under Ethiopian law there are requirements set for registering a private company. One has
to prepare an application form signed by the investor or agent. Where the application is
made by an agent, a photo copy of his power of attorney is required. Moreover, three recent
passport size photographs for approval and the registration process are necessary.
Minimum capital requirement of a private company under Ethiopian law
The minimum capital requirement for a wholly owned foreign investment is 100,000 USD
for a single investment project presented in cash or in kind. Or 50,000 USD for projects in
areas of engineering or architecture, accounting and audit services project studies or business
management, consultancy services or publishing which is going to be paid in cash or in
After the company fulfils the necessary requirements and passes through the required
registration procedure it will get the license to operate.
Types of mining license under Ethiopian mining law
According to the ministry of mines and energy, investors can invest on mining on all modes
of dong business in Ethiopia. Namely, sole proprietorship, business organizations?. etc. the
ministry of mines and energy has the authority to give mining license. It issues license to
private investors engaged in exploration and mining operations, and ensures that they
conduct mining operations and meet financial obligations in accordance with their
According to proc. No. 53/1995, there are two kinds of license in mining law, known as
large scale and small scale licenses. However, there are additional concepts known as
prospecting, exploration and artisanal license that may be acquired license that may be
acquired before the above two.
Prospecting license is a license that grants an exclusive right to prospect for the minerals
within the license area and it may not be transferred, assigned encumbered or inherited.
Exploration license grants an exclusive right to explore and mine for the minerals within the
area specified n the license.
Artisanal mining license grants an exclusive right to explore and mine for the minerals within
the license area. It shall include all tunneling and other underground work except vertical
excavation of less than 15 meters in depth.
Small scale Mining license: - grants and exclusive rights to mine for the Minerals within the
area specified in the license. It shall cover the area reasonably necessary to carry out mining
operations. This kind of license may be transferred, assigned or encumbered with the prior
approval of the Licensing Authority.
Large scale Mining license:-This license shall cover the area reasonably necessary to carry out
mining operations. It shall also be transferred, assigned or encumbered with the prior
approval of the Licensing Authority.
Validity Time of a Mining License
The Validity time of the license, renewal and cost of license differs depending on the type of
Prospecting license: - is valid for a period of one year and it may not be renewed. In case of
Exploration license, is valid for an initial period of three years and may be renewed twice for
additional terms of one year each. The licensing Authority may further allow extension of
Artisanal Mining License shall be valid for one year and may be renewed indefinitely for like
Small scale Mining license is valid for a Maximum period of ten years or the life of the
deposit, which ever is shorter, and may be renewed for a maximum period of five years each.
Large scale mining license shall be valid for a maximum period of twenty years or the life of
the deposits, whichever is shorter. The license may be renewed for a maximum period of ten
There are no limitations imposed on companies with foreign capital any differently than
those imposed on domestic ones.
The process for application of a mining license is stated in regulation 182/94. Art 3-5
provide the requirement for application of prospecting license, exploration and Mining
licenses. Summary is also available in the application form which we?ll get from Mining
office with the directive. Further chapter II of the regulation provides the process of issuing
a license art 6-13.
If you have an additional question or comment please Contact us.
Any pertinent information about investment in Ethiopia, tax in Ethiopia, can be available
from an Ethiopian Investment Lawyer, Ethiopian Tax lawyer, Ethiopian, Ethiopian
Employment Layer, Ethiopian Labour Relationships Lawyer, Ethiopian Immigration lawyer.