Newera Mining Plc, has signed an agreement with the Ministry of Mines, Petroleum and Natural Gas (MoMPNG) that will make the company the first large silica sand miner in the country.
During its session on July 14, 2017 the Council of Ministers’ approved large scale silica sand mining for the first time.
Sand and silica is used for glass and bottles and would help the country make more bottling factories. The company spent over a year exploring for minerals in Kella, Sodo Wereda, Gurage Zones in SNNPR.
Despite having a good deal of sand, Ethiopia has yet to develop it into a tangible resource.
“The country has the resources but the quality is the main issue. The product is available in different parts of the country but the iron content is very high,” Ermias Kassa, head of Ermias Kassa Minerals Consulting Service, told Capital.
His company is the main exploring business in Ethiopia and they undertake a feasibility, environmental and social impact assessment for the project.
This study has been going on since November 2015. .
He mentioned that Goda Bottle and Glass Share Company, another local developer, secured high quality silica sand at Adigrat area, in Tigrai region.
In the agreement signed on Thursday August 10 at the MoMPNG hall, Motuma Mekasa, Minister of MoMPNG, advised the company to start production quickly.
At the signing ceremony Lidia Mosisa, General Manger and shareholder of Newera Mining, who appreciated the support of the ministry, said they plan to do just that.
Dawit Shiberu, Deputy General Manager and major shareholder of Newera, said that the company signed the mining agreement after completing detailed exploration activities in 2016, a feasibility study and fulfilled all regulatory approvals for the grant of a large scale mining license application.
He told Capital that the project will produce different qualities and sizes of silica sand that can be used in a very wide range of industrial applications like paint, construction and glass.
“We have already signed agreement with foreign company to supply optical glass quality silica sand worth over USD 20 million,”
Ermias said that there are no companies that use optical glass, which is a high quality silica sand with the content of 99.8 percent silica sand. It is in demand by big companies who produce high quality products.
The senior consultant said optical glass is used for high quality end products like lenses and computer screens.
The company has also signed an agreement with a local glass manufacturer for umber and flint glass silica, which has 95 and 98 percent of silica content respectively.
Dawit declined to mention the name of the foreign and local glass manufacturers who want to buy the supply from his company.
“The agreement is confidential,” he said.
So far the glass and bottle production in the country is almost nil, and very few producers are using the imported inputs for their production.
The limited access of glass or bottles in the country pushes the fast growing packing industry like breweries and agro-processing to import the packaging material which requires a lot of hard currency.
Sometime the production of the manufacturing industry is limited in relation to the scarcity of hard currency to import bottles.
Some local and foreign based companies who observed the gap are under preparation to commence the production dramatically. Sources said that Newera has entered into an agreement with one company to produce a large number of bottles.
The mining license area of the company is 1.4 square km on the hill at 4km northwest of Kella town, which is 109km south west of Addis Ababa.
The company exported some sample silica sand and has secured 91.91 million tons of sandstone.
Dawit said that the project that will create more than 120 jobs is expected to consume over USD 10 million.
“We are expected to commence operation in the third quarter of 2018,” he added.
It will produce over 120,000tons per annum.
The company wants to be socially responsible in addition to following the rule that mining companies allocate 2 percent of their revenue for developmental projects in the mining areas.
“We have seen some areas on the community development besides the responsibility set by the Ministry,” the company owners said.
Newera is also exploring for gold and coal at Surma, Omo and Kindo Didaye, Wolayta all in SNNPR.