“We are the First Major Mining Deal to Get to This Stage in Ethiopia.”

Harry A. Adams is Executive Chairman of KEFI Minerals. The mogul is also founder and co-founder of a number of other businesses including the Citicorp Capital Investors Australia, Pilatus Capital, Australian Gold Council, EMED Mining and Cyprus-based Semarang Enterprises. He has overseen a number of start-ups principally through the roles of chairman, deputy chairman and managing director. EBR sat down with the tycoon to discuss about KEFI Minerals investment in Ethiopia.

EBR: How do you assess the investment regime in Ethiopia in general and for foreign mining companies in particular?
Adams: I can say it is fine in general. It also seems fine for us so far. But we can only reach conclusions after we have completed the financing scheme we currently work on to go further with our project. We are, after all, the first major mining deal to get to this stage in Ethiopia; and some steps and policies are being implemented for the first time.

Why do you think foreign mining companies are not successful in Ethiopia?
The processes of exploration usually fail to succeed. That means most geological targets fail to become development projects that actually are attractive enough to deserve investment. And then, if a discovery does indeed deserve development, the sponsoring companies [may] then face many challenges out of their control including from nature, commodity price markets, capital markets plus the processes in host communities. We have only been in Ethiopia for four years and have made good progress.

How much confidence do you have in geological survey findings regarding Ethiopia’s potential gold reserves?
I have no doubt there is huge potential in Ethiopia. But turning potential into a long term industry takes many years of effort and [a great deal of resources].

What lesson should Ethiopia take from other sub Saharan African countries?
I think Ethiopia is very outgoing and takes lessons from all over the world. We make suggestions to the authorities and it is for them to decide. We have no doubt that Ethiopia’s strong and proven focus on responsible and high growth will yield continually improving mining policies and regulatory systems that are competitive against other countries wanting to develop their mining industry.

How do you evaluate the institutional capacity of the Ministry of Mines, Petroleum & Natural Gas?
Transparent and competitive processes and quick decisions are the main requests of the industry in all countries. We see that the Ministry openly strives for capacity-building as the industry activities expands.

Many foreign companies reached a point where your company achieved so far but failed to go further. What makes you sure that your company will be successful in the future?
We have advanced further than others and triggered finance closing with one financier. If this were to fail to close for any reason, we have other financiers ready to step in.

How is your relationship with the local community and the regional government?
Most planned projects benefit stay in Ethiopia and the local area in particular. We work very closely with the community and all levels of government. We do this to maintain the trust that has been developed and we indeed feel a sense of welcome and belonging from the community.

What is the impact of price at the international market on gold production locally?
The project needs USD800 per ounce to pay all operational costs and USD1000 per ounce to repay financiers. These cost benchmarks are lower and better than for most gold companies. The gold price looks likely to stay above these levels and therefore we are confident that we have designed a good project. EBR

5th Year • September 2017 • No. 54