![[Ethiopia] KEFI Minerals seeks Development Bank support in gold mine development project](KEFI gold.jpg)
[Ethiopia] KEFI Minerals seeks Development Bank support in gold mine development project
In a bid to accelerate its gold mine development project, British gold exploration and development company KEFI Minerals PLC has applied for a credit facility to the Development Bank of Ethiopia as part of its plans of raising $85 million in loan.
The project that is estimated to cost an estimated $140 million is based in Oromia regional state which occupies the largest part of Ethiopia.
According to the Development Bank of Ethiopia, the loan application is under appraisal.
KEFI said that the total cost of the project is estimated at $140 million adding that it anticipates securing 85 million dollars loan. The company should get a clearance from the National Bank of Ethiopia (NBE) for the proposed debt gearing of 85 million dollars.
The company said it held encouraging dialogue with a number of lenders as possible participants in the syndicate alongside the DBE.
The gold mine, which is under development will have the capacity to produce 28,875kg of gold in the coming ten years.
After completing the feasibility study KEFI Minerals signed large scale mineral development agreement in April 2015 with the Ministry of Mines, Petroleum and Natural Gas. Under Ethiopia’s mining law the government of Ethiopia is entitled to a five percent free carried interest on Tulu Kapi mine.
The government has shown an interest in investing on the gold project. Up on the request made by KEFI Minerals the Ministry of Finance and Economic Cooperation (MoFEC) has agreed to invest $20 million on the gold project.
Minister of Mines, Petroleum and Natural Gas, Tolosa Shagi said that the government agreed to invest up to $20 million on infrastructure near the Tulu Kapi gold mine and increase its stake on the gold mine project. Tolossa said the infrastructure development project may include road construction and electrification.
KEFI said it has raised $5 million primarily for the scheduled development activities of the Tulu Kapi Gold Project, notably resettlement of the Tulu Kapi community and project finance syndication closure cost. The company said its Social Performance Team in collaboration with the Government at all levels, is preparing for the community resettlement, livelihood restoration and community development programs.
“Verification of the compensation claims is now being arranged to ensure regulatory compliance. Procurement, detailed engineering and contractual documentation are being conducted in parallel with the community resettlement schedule,” the company said.
So far MIDROC Gold is the sole company engaged in large scale gold production. Ezana Mining and KEFI Minerals have secured large scale mining licenses from the Ministry of Mines, Petroleum and Natural Gas and are in the process of setting up the gold mines in the Oromia and Tigrai regional states.
