NEWSSouth Korean POSCO offers to assist in iron mining and steel production
The Ministry of Mines (MoM) has embarked on a new plan to substitute import of metal and metal products.
According to Takele Uma (Eng.), Minister of Mines the import substitution will take place “in five or less than five years” since “it is a very crucial and sensitive decision.”
The Ministry brought POSCO, a South Korean iron mining firm with a longtime interest in Ethiopia on board, to provide a technical support, experience sharing, and human capital development among others to the Ministry.
“POSCO is willing to support Ethiopia in mining especially in iron mining and producing steel,” Takele told The Reporter.
Takele conferred with managers and experts from POSCO, on April 13, 2022. The company came to the decision especially after Prime Minister Abiy Ahmed’s (PhD) invitation during his visit to Seoul in 2019.
According to sources, Turkish, Chinese, Russian and Italian mining companies have also showed interest, apart from POSCO. However, these companies seek to invest in iron mining partnership with the government of Ethiopia, instead of investing alone, since the capital requirement is huge.
An iron processing and steel making industry can take up to USD 14.5 billion, according to an assessment conducted by the Metal Industry Development Institute (MIDI). However, deploying latest technologies for medium scale mining industry can reduce the investment capital.
Energy Service Companies (ESCOs), a Chinese firm, which has conducted a pre-feasibility study on iron mining in Ethiopia, concluded there are no sufficient reserves. Importing iron ore and processing it locally was also considered as an alternative before.
However, latest surveys indicated Ethiopia has a sufficient iron ore.
“There is a sufficient iron ore resource and there is no need to import iron ore. We also have ample amount of coal and limestone sufficient enough to establish iron and steel making in our country. The ore quality is not very high and hence it needs beneficiation, which is a common practice in the world,” Takele said.
“Now, we are considering alternative technologies given the resources we have. Some technologies require very high quality coal and some may not. To this end, the coal processing plants already in the pipeline are good opportunity for us,” added Takele.
Ethiopia has been spending USD 5.3 billion on average for the past decade to import basic metal products for construction industry input, machineries and mechanical appliances, spare parts and electronics products. Local metal processing industries use over 90 percent of their inputs imported, while scrap covers the rest.
