22 May 2015 Ethiopia Business News (UPDATED)

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Ethiopia’s economy to grow 10.5 percent in 2015/16: World Bank

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By Drazen Jorgic – Fri May 22, 2015 

wbank

ADDIS ABABA, Ethiopia (Reuters)

Ethiopia’s economy is expected to grow by 9.5 percent this fiscal year ending June before accelerating to 10.5 percent in 2015/16, the World Bank said on Friday, adding inflation will remain in single digits during this period.

The ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) has touted its economic achievements before Sunday’s election, although no one doubts it will sweep to power again, as critics say it stifles any real opposition.

There is just one opposition member of the outgoing parliament.

Lars Christian Moller, the World Bank’s lead economist and program leader for Ethiopia, told Reuters that falling oil prices should help quicken Ethiopia’s growth in 2015/16.

“If lower oil prices are passed on to consumer in the form of lower fuel prices, it gives additional disposable income to consumers,” Moller said in the capital Addis Ababa.

The Ethiopian government has targeted annual growth at about 11 percent for the past five years.

Moller said the service and agriculture sectors are likely to drive growth, along with the booming construction sector, most visible in the capital where new multi-story office blocks and shopping malls have altered the city’s skyline.

He added growth eased slightly in 2014/15 due to below par rains in the mountainous Horn of Africa nation, which remains one of the world’s poorest countries despite boasting one of the highest growth rates across the globe.

Annual inflation is likely to remain in single digits, in line with the government target, Moller said.

The bank predicted inflation would average 7.2 percent this fiscal year, rising to 8.2 percent in the next fiscal year.

After peaking at 64 percent in 2008, inflation in Ethiopia has eased in the past two years, staying below 10 percent.

“We basically interpret that as a policy choice,” he said, adding that in the past, monetary policy played a larger role in facilitating growth.

“They have now shifted their priorities so that they have some degree of price stability, so that means monetary policy will be adjusted so that an inflation target can be met.”

http://af.reuters.com/article/investingNews/idAFKBN0O70LP20150522?sp=true

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US Extends Ethiopia’s Agoa Market Access for 10 Years

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agoaThe Ethiopian Investment Commission Director General Fitsum Arega recently told The Ethiopian Herald that Ethiopia has been given another 10 years extension opportunity for accessing US market duty and quota free.

He also said that African Growth and Opportunity Act (AGOA) has been extended which is big news for the country. I congratulate those companies which are manufacturing in Ethiopia and supplying to the American market. And we are grateful to the US government for allowing the extension, he added.

In the past we haven’t utilized the opportunity to the maximum extent. But we believe in the years to come the Commission will work with other ministries on the construction of industrial parks to attract and allow more manufacturers to settle and manufacture in Ethiopia and access American market through the AGOA opportunity, Fitsum added.

 “The relationship we have with the US government is so good that Americans want us to grow and access their market .”

He said that Ethiopia is also accessing European market tax free and without quota limitation as well.

It was learnt that AGOA was going to phase out in December 2015 but the US government allowed its extension for Ethiopian manufacturers to export tax and quota free.

http://allafrica.com/stories/201505211352.html

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Ethiopia plans four new wind farm projects

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Ethiopia plans four new wind farm projectsAddis Ababa: May 21, 2015  –
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As Ethiopia gears to make wind power one of the significant part of the country’s renewable energy sources, four new wind farm power projects totaling 542 mega watts of energy are to be constructed in the coming years, an official said.

The report was released in a booklet during the inauguration of the third wind power to be commissioned over the last three years the 153 MW Adama II Wind farm, 95 kms south east of Addis Ababa. The other two are the 51 MW Adama I wind farm and the 120 MW Ashegoda Wind farm located 780 kms north of Addis Ababa.

The Projects who are under study are the 300 MW Aysha wind farm, the 42 MW Mesebo-Harena wind farm, the 100 MW Assela Wind Farm and the 100 MW Debre Berhan wind farm.

Alemayehu Tegenu Water, Energy and Irrigation Ministry Minister said the inauguration of the Adama II Wind Farm, is part of the government’s drive for the concluding Growth, Transformation Plan (GTP) to increase production capacity from 2,000 MW to 10,000 MW by 2015.

Gibe III Hydro Dam, which is more than 90 percent complete is expected to see it’s two turbines out of ten each with generating capacity of 187 MW will be commissioned next month.

Alemayehu further stated that the development of wind resource is a perfect energy mix and complement with hydro power energy, as well being part of its power export revenue.

Ethiopia has already started exporting power to Djibouti, Sudan and two Kenyan border towns, enabling the country to earn much needed hard currency.

Azeb Asnake CEO of the public utility firm Ethiopian Electricity Power (EEP), stated that the country exhibited a 20 percent annual growth in electricity demand, and as such the government is constructing power projects to cope with the rising demand going further.

http://www.fanabc.com/english/index.php/news/item/2997-ethiopia-plans-four-new-wind-farm-projects

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Ethiopia signs deal with Khartoum to import oil via Port Sudan

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Juba – 21 May 2015

portsudanEthiopia has signed a deal with Sudan to import oil products through the country’s Red Sea outlet of Port Sudan.

The executive director of the Ethiopian Petroleum Supplier Enterprise Haile Mariam signed the agreement with Sudan’s investment minister Mustafa Osman Ismail in the Sudanese capital Khartoum late Wednesday.

“Sudan is keen to build smart partnership with Ethiopia to improve economic activities between the two neighbors,” Ismail was quoted by the state-run Sudan News Agency as saying Wednesday.

Mariam said an Ethiopian bank would be established in Sudan to address the problems of remittances, investment and commercial exchanges between the two countries.

Ethiopia, facing growing energy demands, lost its port of Massawa following the secession of Eritrea in 1991.

Depending on the port of Djibouti, land-locked Ethiopia wants to diversify its sea routes.

Ethiopia imported a total of 42,502 b/d of oil in 2010, according to figures provided by the Abidjan-based African Development Bank in 2014.

It also imported up to 85% of its oil supply from the Sudan in 2012, before canceling its contract, according to media sources in Ethiopia.

Mariam did not say where the oil would come from. Ethiopia has been linked with the Kuwait Petroleum Corporation and other Middle Eastern oil firms.

Ethiopia has been improving its road network that links it with eastern Sudan where Port Sudan is based.

http://www.platts.com/latest-news/shipping/juba/ethiopia-signs-deal-with-khartoum-to-import-oil-26098407

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Cornerstone lay for railway in Jima

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Cornerstone lay for railway in JimaAddis Ababa: May 21, 2015  – 
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Prime Minister HaileMariam Deselagn yesterday in Jimma, Oromia regional state, laid foundation for the construction of a railway project, which is part of the railway line that connects the nation with neighboring South Sudan.

The project is part of the 491km Addis Ababa- Ambo- Ijaji- Jimma- Bedele railway that later reaches South Sudan.

The railway line will connect towns in western part of the country with each other and South Sudan thereby boost accessibility of transportation to the area, known for its coffee production, said the Prime Minister.

The construction of the railway is aimed at enabling farmers reach market areas easily thereby supply coffee to the central market.

The Prime Minister has also lay corner stone for the construction industrial park in the town.

http://www.fanabc.com/english/index.php/component/k2/item/2982?Itemid=674

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Ethiopia: World Bank Supports the Expansion of Efficient and Safe Transportation Systems

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worldbankWASHINGTON, May  19, 2015 –

The World Bank Group’s Board of Executive Directors today approved a US$370 million credit, to help the government  of Ethiopia further expand its transportation system and provide safe and efficient roads to its citizens.

The limited size and poor quality of roads has been a major constraint to economic growth and poverty reduction in Ethiopia. To address this challenge, the Government of Ethiopia, (GoE) with support from several development partners including the World Bank launched the Road Sector Development Program (RSDP) in 1997. Under RSDP, Ethiopia’s road network has more than tripled from 26,550 km to 99,522 km today, and 70 percent is now in good or fair condition compared with 22 percent at the start of the program. Despite these achievements, the road network has not kept up with the needs of Ethiopia’s fast growth and economic transformation. The sector also still faces several constraints including high traffic congestion and high accident rates.

The new Expressway Development Support Project, is designed to help Ethiopia overcome some of these challenges. Specifically, the project will support the construction of the 57 km Batu/Zeway- Arsi Negele portion of the Modjo- Hawassa new high capacity highway, connecting the southern region to central, northern Ethiopia and the Djibouti port, the country’s main trade route, while the corridor forms essential part of the Trans East African Highway that connects Ethiopia to Kenya and southern Africa.

The development of the 203 km Modjo-Hawassa expressway is a collaborative effort among the GoE and several development partners, and sets a positive example of harmonization and cooperation among traditional and non-traditional development partners. The African Development Bank (AfDB) is financing the construction of 57km, the Korea EXIM Bank 37 km, and the remaining 52km will be financed by the China EXIM Bank.

The project will also set the framework for expressway development through the preparation of a strategic master plan and the provision of institutional capacity building. In addition, it will provide road safety and institutional development support to the Ministry of Transport.

The project will help to modernize the roads network and promote cost sharing and recovery of operational, maintenance and part of investment costs. It will also play an important role in supporting economic growth, while providing a high quality road for users and reducing road accidents.” said Guang Zhe Chen, World Bank Country Director for Ethiopia.

The project is consistent with the Bank Group’s Country Partnership Strategy (CPS) for                FY 2013-16, which aims to foster competitiveness and employment by supporting a stable macroeconomic environment, increasing productivity, increasing and improving delivery of infrastructure, and enhancing regional integration. The project will also help in facilitating domestic trade.

“The project contributes to the overarching goal of transforming Ethiopia’s economy by improving the quality of roads serving areas with high potential for tourism, light manufacturing, agro-processing and producing key export oriented agricultural products.” said Tesfamichael Nahusenay, World Bank Senior Transport Engineer.

The Ethiopian Roads Authority will be responsible for the implementation of the expressway construction, the framework for expressway development and institutional strengthening components. It will also implement activities on behalf of the Ethiopian Toll Roads Enterprise. The Ministry of Transport will implement the Road Safety and the institutional development support to the transport sector.

http://www.worldbank.org/en/news/press-release/2015/05/19/ethiopia-world-bank-supports-the-expansion-of-efficient-and-safe-transportation-systems

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Africa Focus China’s CREC to complete section of Ethiopia’s key railway project

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railADDIS ABABA, May 19 (Xinhua) —

The Sebeta/Addis Ababa-Adama- Mieso railway, which is a section of Ethiopia’s key railway project of the Addis Ababa-Djibouti railway being built by the China Railway Group (CREC) is nearing completion.

As the track-laying activity is approaching to completion, a grand ceremony was held on Monday in Adama town about 99 km south of Ethiopia’s capital Addis Ababa, where senior government officials, diplomats, Chinese and local staff of CREC as well as residents of Adama town celebrated the landmark chapter of the project.

The Sebeta/Addis Ababa-Mieso railway project covers a total length of 329.145 km. The Ababa-Adama section is a double track with 115 km length while the Adama-Mieso is a single track covering 214.145 km.

The standard-gauge railway, which is one section of the first Ethiopia’s national railway network, has been contracted by CREC with a total cost of nearly two billion U.S. dollars.

With the designed speed of 120km/h, the electrified-railway connects Addis Ababa with important cities of Adama, Dire Dawa, and Djibouti Port, and is the main transporting corridor for imports and exports of Ethiopia and the inland of East Africa.

Stating that the project is the first modern railway in Ethiopia, Prime Minister Hailemariam Desalegn said the project is a blood-line of the country’s economy.

“In addition to its contribution to facilitation of transportation in the country, the project plays significant role in sharing experience and transfer of technology and skills from the Chinese to Ethiopians, which in the future will enable Ethiopian professionals carry out such infrastructure projects in the country on their own,” he said.

Stating that more than 80 percent of the project has been completed so far, Getachew Betru, CEO of the Ethiopian Railway Corporation (ERC), noted that the speed and works on the construction of the project show that it would be fully completed as per the contract schedule and standard.

Getachew called on all concerned parties and the local community to continue to display the usual collaboration and provide support to the undertaking of the project towards its successful completion, and then test-ride and handover ceremony.

Reiterating that the railway facilitates Ethiopia’s imports and exports via the Addis Ababa-Djibouti corridor, Arkebe Equbay, Minister Advisor to the Prime Minister and also Board Chairman of ERC, highlighted on the role the project plays in the country’s economic performance.

He noted that the project also contributes to economic integration in the sub-region, and is a model one from which good experience has been gained for future railway projects to be carried out in the country.

Appreciating the commitment and collaboration of Ethiopians and the Chinese towards the success of the project, La Yifan, Chinese Ambassador to Ethiopia, hailed the project’s role in strengthening friendship and also taking the relations between Ethiopia and China to a new height.

He reiterated that the project helps technology and skill transfer between the Chinese experts and Ethiopian counterparts.

Commenced in February 2012, the Sebeta/Addis Ababa-Mieso Railway Project is expected to be fully completed in few months.

CREC is also carrying out the 475-million-U.S. dollar Addis Ababa electrified railway project, which started test-ride early February this year in the capital of the East African nation.

CREC, which is one of the world’s top 500 enterprises with 300, 000 permanent staff, has overseas projects in 68 countries and regions.

While working on different projects in Ethiopia, CREC has been supporting the local people, especially those who are by the projects sites, where the Chinese company has undertaken development programs in water supply and road development.

http://www.focac.org/eng/zxxx/t1265289.htm

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Nation’s registered growth – reflection of public’s transformed mindset

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Nation’s registered growth – reflection of public’s transformed mindsetAddis Ababa: May 20, 2015  –
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Prime Minister Hailemariam Desalegn today held a meeting with residents of Jimma and its environs.

The Premier noted Ethiopia’s steadfast all-rounded growth is a reflection of the public’s transformed mindset. He vowed to address some loopholes in good governance issues.

Participants underlined various social, economic and political programs launched by the government have benefited them. Recently inaugurated and proposed projects in the area are examples in this regard, the participants noted.

However, the residents urged the Prime Minister to resolve problems related to roads, electricity, land administration, tax collection and good governance. They also called on the government to tackle illegal human trafficking, a deep-rooted problem in the zone.

The Premier assured the residents that the government will take a coordinated effort to promote good governance and most of the developmental issues will have answers in the GTP II phase.

http://www.fanabc.com/english/index.php/component/k2/item/2978?Itemid=674

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China hands over two standard schools to Ethiopia’s capital

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chinaAddis Ababa: May 21, 2015 –
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Ethiopian Minister of Education, Shiferaw Shigute, has hailed China’s support to Ethiopia’s education sector and to the endeavor to ensure education access to all school-age children in the East African nation.

The Minister made the remarks on Wednesday during a ceremony organized to hand over two standard elementary schools constructed by the Chinese government in Ethiopia’s capital Addis Ababa.

China in 2009 announced that it would construct about 50 standard schools in Africa to support efforts on education improvement on the continent.

Speaking at the ceremony held in Bole Sub-city of Addis Ababa, Shiferaw stated that China has been constructing schools in Ethiopia under the China-Africa Friendship school construction program, which the minister said supports Ethiopia’s endeavor to ensure education access to all school-age children.

“I would like to thank the Chinese government and the people of China for this generous support to the Ethiopian government and Ethiopian children. This China-Africa Friendship Program, 50 schools construction program has been implemented for the last two years,”said the minister.

“It is wonderful standard and best quality; we are very pleased. We would like to thank the contractors, the embassy, all organizers and participants by the name of the beneficiaries,” he said.

The minster told reporters that Ethiopia and China have been cooperating in education sector, whereby China provides scholarship to Ethiopian students at different levels.

“We have great cooperation, between Ethiopia and China. The Chinese government provides us scholarship. Currently, we have over hundred post graduate students in China,” noted the minister.

Speaking on the occasion, La Yifan, Chinese Ambassador to Ethiopia, expressed China’s commitment to supporting the effort towards creating education opportunities for all school-age children in Ethiopia. “In education area, China and Ethiopia have implemented various of cooperation projects, from scholarship to training programs, from construction of schools to provision of teaching equipment,” noted the ambassador.

He also recalled that China has constructed three schools in rural areas of Ethiopia, which help to solve the problem of insufficient educational resources in these areas.

“In the future, China will continue to strengthen educational cooperation with Ethiopia and make our cooperation more robust and better-structured.,” added the ambassador.

http://www.fanabc.com/english/index.php/news/item/2993-china-hands-over-two-standard-schools-to-ethiopia-s-capital

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South Boulder Mines Release Resource Estimate for Colluli Project in Africa: 1.1 Billion Tonne Ore Reserve

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South Boulder Mines (ASX:STB,OTCMKTS:SBMSF) announced its resource estimate for the Colluli Potash Project in Eritrea, East Africa: 1.1 billion tonnes of potassium bearing salts at 10% potash comprising 287 million tonnes proven and 820 million tonnes probable ore reserve, with a contained sulphate of potash of approximately 205 million tonnes.

 

Highlights:

  • Maiden JORC (2012) potassium salt Ore Reserve estimate of 1.1billion tonnes at 10%K2O equivalent
  • 287 million tonne Proved Ore Reserve
  • 820 million tonne Probable Ore Reserve
  • Over 85% of Measured and Indicated Resource included in Ore Reserve Estimate
  • Ore Reserve estimate based on JORC 2012 Mineral Resource Estimate and Colluli Prefeasibility Study released in February 2015
  • Substantial project upside and capacity potential
  • More than 200 year mine life at modelled sulphate of potash (SOP) production rates
  • Colluli potassium salt combination capable of producing a diverse range of potash products including (SOP), potassium magnesium sulphate (SOP-M) and potassium chloride (Muriate of Potash or MOP)

As quoted in the press release:

The 1.1 billion tonne Ore Reserve comprises 287 million tonnes of Proved and 820 million tonnes of Probable Ore Reserve shown below in Table 1. The estimate is based on the Mineral Resource estimate reported in February 2015, and was prepared under the direction of the Competent Person using accepted industry practice and reported according to the 2012 JORC Code.

The Ore Reserve is based on Measured and Indicated Mineral Resources, and 3D resource block models developed in January 2015 from geostatistical assessment of predominantly diamond drillhole sample results. The Mineral Resource is converted to Ore Reserve by developing the diluted resource model and applying pit optimisation and mine scheduling to determine economically viable blocks to recover and process.

Modifying factors, including mining, metallurgical and long term cost assumptions, are summarised below in Appendix A in the form required by the JORC Code 2012 (referred to within the JORC Code as “Table 1”) as a checklist or reference when preparing Public Reports on Exploration Results, Mineral Resources and Ore Reserves.

After consideration of mining, metallurgical, social, environmental, statutory and financial aspects of the Project, the Proved Ore Reserve estimate is based on Mineral Resources classified as Measured, while the Probable Ore Reserve estimate is based on Mineral Resources classified as Indicated.

 

Summary of Material Information

 

Mining

Open pit mining method. For potash and rock salt layers within the resource, 110t class surface miners directly loading 90t class rear dump trucks have been selected and modelled. Similar continuous miner technology is used in underground potash mines.

For clastic overburden and bischofite, 190t and 110t class excavators and 90t class rear dump trucks have been selected and modelled. Clastic overburden will be pushed down to excavators by 50t track bulldozers. This method is commonly used in open pit operations and well understood.

The choice of mining method enables selective extraction of the potash ore units, minimising mining dilution and ore loss, and eliminating the requirement for drill and blast. Staggered benches in the pit development level stripping ratio over the mine-life, enhance economics and provide consistent plant feed.

Optimum pit limits were determined using Gemcom Whittle 4X computer software. Process plant feed targets were maintained in the mine schedule using Minemax Scheduler strategic mine scheduling software and XPAC mine production scheduling software. The optimisation and schedules considered Measured and Indicated Resources only.

The Ore Reserve includes dilutant materials that are expected to be mined with the potassium salts, as determined by adding “skins” of dilution to the contact horizons of the relevant potassium containing horizons.

The content of the pit designs includes the in situ Ore Reserve and 4.5 billion tonnes of waste material, resulting in a life of mine stripping ratio of 3.6 waste tonnes to 1.0 ore tonne.

Financial analysis completed in February 2015 showed that, at that time, the future revenues to be derived, and costs incurred to access those revenues, produce a viable project using the assumptions presented in this estimate. The costs to complete and commission the mine and plant to process for a 30 year period were considered.

Processing

The commercially proven and well understood process involves the combination of decomposed kainite with sylvite which results in an ambient temperature conversion to potassium sulphate. Excess brine will be treated in evaporation ponds to precipitate potassium bearing salts which will be recycled to the plant for recovery. Benchtop and pilot plant tests conducted at the Saskatchewan Research Council (SRC) prove the process design and process flow diagrams used for the PFS. The process design was validated by an appointed Technical Review Committee in February 2015.

The SOP product will be dried and sized to produce granular, standard and potentially soluble products which will be shipped for export.

Bench scale metallurgical testwork using samples that reasonably represent the mining schedule has been completed to determine chemical and mineral analysis of the samples, liberation and flotation characteristics of all potassium salts, decomposition rates and retention times, decomposition ratios, precipitate sizing and evaporation rates.

Product Pricing

A long term price of US$586 per tonne FOB at Anfile Bay was used for the Ore Reserve estimate.

 

South Boulder Mines Managing Director, Paul Donaldson, said:

This is an outstanding result and reaffirms the significance of the Colluli resource. The shallow mineralisation of the potassium bearing salts in combination with highly favourable ambient conditions, allows open cut mining of the resource, giving high resource recovery. Important to note is the unique mineralogical composition of the Danakil evaporite deposit, which allows the production of a diverse range of potash products including sulphate of potash (SOP), potassium magnesium sulphate (SOP-M) and potassium chloride (MOP). The very large Mineral Resource and associated Ore Reserve estimate allows the project substantial growth and product diversification over time. Once the definitive feasibility study for the two phase production of SOP has been completed, work will commence on the logical pipeline of projects that will grow the project to its full potential.

Click here to read the South Boulder Mines (ASX:STB) press release
Click here to see the South Boulder Mines (ASX:STB) profile.

http://potashinvestingnews.com/12127-south-boulder-mines-resource-estimate-colluli-project-africa.html

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