Locals Near Mine Want MIDROC's Help

December 14, 2009 (ADDIS ABABA) – Residents of Shekisso Woreda, where MIDROC Gold is mining used to mine, protested in a demonstration on Friday, December 4, 2009. The demonstration arose due to the company's move from Lega Dembi to the Sakaro site to open another mine accusing that it had not constructed roads, schools, bridges and clinics for the community during its 12-year operation in the area. This was compounded by another demonstration in Addis Abeba organised by students of Addis Abeba University on Monday, December 7, 2009, who submitted a similar complaint to the office of the Oromo People's Democratic Organisation (OPDO), a member of the ruling Ethiopian People's Revolutionary Democratic Front (EPRDF).

The residents said that MIDROC Gold must oblige because it is one of the biggest investors in the country. It has also helped other communities where it had no business interests. Other investors in the area have already contributed to infrastructure development in the area.

The Guji Zone Administration Office would deal with the matter seriously, Getenet Assefa, head of the office said, adding his own complaint that MIDROC Gold's communication with the zonal office was poor.

The university students also raised concerns about 2,000 farmers who, according to a fourth-year law student, were supposed to be paid compensation when they were displaced to make room for the Lega Dembi mining site.

No comment was available from the Addis Abeba office of the OPDO, whose experts were said to have gone to the site to look into the matter.

MIDROC Gold denied knowledge of the two demonstrations. But Tafesse Sahelle, senior director of communications and public relations at MIDROC Gold, told Fortune that his company had entered into no commitment to fulfill public infrastructure needs.

Tafesse said that MIDROC Gold, under its own initiative, had provided clean water, constructed a kindergarten, donated computers to the local preparatory school, and even granted 40,000 Br for the ceremony of the handing over of power in the Abba Gadaa System in the Guji Zone, where the two mines are located. He added that MIDROC had provided the furniture for the Shakisso Woreda Administration Office. But he declined to comment on the issue of farmers that the students said still needed compensation.

"I do not have any tangible information that MIDROC Gold has in anyway contributed to infrastructure development in the area. Even more than half of its employees are recruited from Addis Abeba, instead of from here where its investment is," Getenet said.

MIDRCO Gold employs 1,400 people based in Addis Abeba and at the mines, Tafesse said.

MIDROC Gold had been mining from the Lega Dembi gold belt since 1998, extracting 34,000kg of gold from which it earned 466 million dollars. It paid 172 million dollars to the federal privatisation agency for the mining rights in the area. On November 24, 2009, it signed a contract with the Ministry of Mines and Energy (MoME) for the extraction of 20,483kg of gold from nearby Sakaro, three kilometres from Lega Dembi.

The law student said that the students decided to take the case to a higher level because it would serve not only  the interests of the Guji Zone residents but also serve as an example for investments that could take place in other areas of the country.

An official of the Ministry of Mines and Energy said that issues such as those raised by the residents of Guji were not included in the licences given to investors. He said, however, that the questions raised by the residents may have some legitimacy, although it was not up to his ministry to address those questions.

MIDROC Gold confirmed the Sakaro gold reserve in a four-year exploration on a 9.71 square kilometers area will 124 boreholes. The company projects a revenue of 564 million dollars from the new mine, and will pay 130 million dollars to the government in royalties and tax.