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Last Updated:  Wednesday, 26 March, 2003, 15:27 GMT
Gold smuggling hits Ethiopia
gold bars
Local gold diggers often sell on the black market
Ethiopia's drought-hit economy is losing $30m (19m) a year from gold smuggling, its government believes.

Up to 3 million grammes are leaving the country every year, according to Khasu Tadesse, head of the Mines Ministry's project co-ordination department.

Local diggers throughout Ethiopia are selling on the black market to traders from neighbouring Sudan, Kenya and Somalia, he said.

The government is working on getting small-scale miners to work together so as to receive international prices while still selling locally, thus making sure their earnings enter the formal economy.

Drought

At present, Ethiopia has only one operating gold mine, in Lege Dembi about 300km from the Addis Ababa, producing about 300kg a year

A number of foreign firms have licences to prospect for access to the country's 500 or so tonnes of proven reserves.

With drought threatening to cause widespread malnutrition across the country after its harvest failed, Ethiopia needs all the foreign currency it can get.

Its main export crop, coffee, produces little enough money in any case with coffee prices at a 30-year low and perhaps as little as $1.20 a kilogramme going to the growers.




SEE ALSO:
Public inquiry into Kenya gold scam
14 Mar 03  |  Business
Gold falls as war tensions ease
17 Feb 03  |  Business
Gold price sparks a new rush
13 Feb 03  |  Business


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