The many mysteries common people do not know about gold processing in Shakiso region of Oromia, Ethiopia
1. Lega Dembi Gold Mining was sold to MIDROC by the Ethiopian Government for 172 million dollars in 1997, and it commenced production in August 1998 in less than a year. The production rate was estimated at 4500 kg of gold each year (no data for the silver). It is intriguing how tens of billions of dollars worth deposit can be sold for so little? Who negotiated the deal? Who signed the paper? What is the net-worth of those people implicated in this transaction today? Here is the truth. 4500 kg of gold (that is one year of production worth) is sold on international market roughly for (4500kg X 35.27 ounce/kg X $1300/ounce) $206,329,500. This is without including the revenue generated from silver. MIDROC bought the mine for 172 million and continued to earn 206 million dollars a year starting from year 1. The return on investment for MIDROC was less than a year. Where on this planet, other than in Ethiopia, an investor can make such a profit in any economic sector? This shows that the company was literally paid to loot the resource, pollute the environment and destroy lives so that it can continue ripping the benefit along with it enablers (high government officials) until the resource is completely depleted. The Ethiopian government built the infrastructure and the gold processing plant and handed it over to MIDROC to do the looting. It is my guess that the 172 million paid by MIDROC was not for the value of the deposit but only for the infrastructure.
2. The gold deposit contains many valuable metals but only gold and silver are produced. The remaining metals are discarded with waste rock.
– The discarded metals will never be recovered economically, a sad story by itself and a lost opportunity for the nation. Some of these metals are extremely valuable (e.g. the significant rare earth elements found in the ore). The deposit also contains other metals such as copper and lead which if recovered at the same time as the gold are valuable but if let go with the waste are detrimental to the environment.
– What MIDROC is doing is therefore a robbery, plain and simple. Taking away only what is easy to get at fast, while discarding a huge amount of the non-renewable resources, is unethical and represents enormous loss of opportunity for Oromia.
– Because the operation is shrouded with secrecy, Oromos are not sure how much of their natural resource is being squandered by alien looters.
3. MIDROC operation has left a huge open pit exposing sulphur-bearing rocks that may contain several heavy metals. The tailing pond also contains sulphide minerals that changes the water to acid. This acid leaches out toxic metals and release them to the water that flows out of the pond. The concentration of metals such as lead, arsenic, chromium, mercury, etc. that are dangerous and toxic to humans, wild life, fish and cattle may be to high and thus continually contaminating area water reserve. Humans can be affected by direct exposure to the water containing high concentration of these metals. Exposure includes not only drinking but also bathing, cooking and even walking bare foot, or eating plants and animals grown in contaminated regions. This leaching process, known as acid mine drainage, will continue for generations affecting people, animals and aquatic organisms living in the affected regions up to a radius of 100 kms. Therefore, it is not only the cyanide (people are talking about now) used to produce gold that is so dangerous, but host of other toxic elements people do not know that they exist. In fact, it is much more difficult to contain or restrict the release of these metals than cyanide, the source of which is known and the amount of which is controllable.
4. MIDROC did not sign the International Cyanide Management Code. Most international reputable gold companies have done so. Ethiopia has no code of its own and has no reputable and independent environmental regulatory body or framework. In the letter to MIDROC, the government is asking the company to “comply with environmental standards”. Which standard is it? Can the government show the public what these standards are and publicly disclose the “environmental audit report” mentioned in the same letter?
5. Even before MIDROC got involved in gold production in Shakiso, another notorious chemical, mercury, was used to recover gold from the placer deposits in the region for decades. The effect of mercury used for several decades in the region and still being used illegally in the region ha has a devastating health effects on the segment of population. This fact seems to have been forgotten. The devastating effects of mercury are autism, learning disabilities, Alzheimer’s, arthritis, depression, and bipolar disorder and other neural complications. Children and the unborn are at particular risk of health hazards. Many artisanal miners and those employed by the government before 1994 in that region may still suffer from the exposure they had to mercury.
6. The use of cyanide is being banned in several jurisdictions around the world, because life is more valuable than gold. This ban has been in place even in countries where strict environmental protection regulations exist.
7. Many people may not know that cyanide can be used for gold extraction without hazardous effects if the processing plant is run by competent, ethical and well-trained professionals of high integrity, and extra technical precautions are taken such as a complete destruction of the residual cyanide and neutralization of the acid mine drainage in the region. This however requires significant investment in waste water treatment systems. Of course, since it costs money and reduces profitability companies just get away with polluting the environment. It requires competent government regulatory authority to enforce compliance and that is the problem.
8. Many people also do not know that gold can be extracted/produced without the use of cyanide depending on the nature of the deposit. The Shakiso area mineral/geology conditions are excellent to apply other non-cyanide related processes.
Up to now, the generous natural resource nature bestowed on our people has been a curse, and for sure not a blessing. On the contrary, it has been a treasure trove for aliens. As a nation, as people of good conscience, we have to show some humanity and put life before greed this time. As an Oromo of a significant knowledge and awareness regarding these issues, I would like to offer the following recommendations to fellow Oromos whether they are high-level government officials, activists or human rights advocates. Do I have an authoritative voice to make such recommendations? Sure I do. I am educated, trained and an accomplished scientist in the field. I have researched, studied, developed and designed several minerals and metals processing plants. Here are my recommendations:
A) A moratorium should be placed on Shakiso area gold mining for the reasons shown below:
– Current operation is environmentally disastrous, affecting the health and safety of the population. The benefit the Oromia regional government receives from this operation is not worth the risk of life of many of its citizens.
– In federally governed countries the federal government normally receives 15 to 20% of the profit generated by mining companies, whereas the regional government gets 10 to 15% of the profit. The 2% the Federal Government of Ethiopia is promising to give to the Shakiso region is laughable. How much of the profit the Oromia Regional Government is to receive is what matters most? Could it be so high that they could not resist to oppose the deal? Have they even been consulted before the license is renewed?
– The production has to be suspended until the mess created to-date is cleaned up and the area is fully rehabilitated. This has to be a pre-condition for the resumption of production.
– The process has to be audited for compliance with internationally accepted norms. If not, a technical remedy has to be put in place before the resumption of normal operation.
– All sources of drinking water in the region have to be tested and monitored to make sure they are safe for consumption by humans and cattle. If not, the government and the company have to provide sufficient water to the population now and forever longer.
– Alternatively, the population has to be relocated with compensation to safer location.
– The population suffering from the consequences of the company’s negligent operations have to be compensated and free medical assistance be given to the life-long victims.
– The government of Oromia should determine how much it would cost for the closure of the mine and rehabilitation of the land upon completion of the gold production. This money has to be deposited in a bank in installments over the life of the mine. It is the responsibility of the company to close the mine and rehabilitate the land in internationally accepted norm before it is allowed to leave the operation or declare bankruptcy. At the end of the mine life the company has the choice of properly closing the mine and get the deposit back, or the government will use the money to do the closure itself.
B) Alternative processes that do not require the use of cyanide or enormously reduce the amount have to be developed (we have experts in the area who can identify/develop such processes). If alternative processes cannot be found then the current process has to undergo vigorous review and overhaul to include processing steps that enable zero cyanide discharge and most of all introduce processing steps that allow the recovery of additional resources (valuable metals) that are currently ignored and discarded. Shakiso is not only about gold, there are more valuable metals than people think there is. It is the solemn duty of Oromo scientists, engineers, lawyers, activists and the regional government to advocate for the maximization of the extraction of this vast non-renewable resource in a manner that is ethical, environmentally safe and socially just.
C) The current MIDROC process excludes the possibility of producing many other valuable elements that are found in the deposit, thus wasting the scarce non-renewable natural resource of the nation. In view of this, a fresh study has to take place so that necessary complementary processes be developed that would allow the co-production of other metals contained in the ore, consistent with internationally recognized environmental norms.
D) The regional state government has the right and the obligation to demand that these and other conditions are met for the gold production to resume.
E) Consequently, the regional state could and should re-possess the property and open it for investment by Oromos and for Oromos to restore political, economical and social justice.
* The author does not wish to be identified. If you send comments, I will pass it to him.