How to Establish a Mining Company in Ethiopia
The whole process of establishing a mining company begins from Ministry of Mines. Unlike other investments, which are regulated by the Investment Regulation and where Investment Commission gives permit, for this sector-specific investment, Ministry of Mines, Energy and Petroleum is authorized to issue license. However, this does not mean that other relevant institutions like Ministry of Trade, Ministry of Revenue are excluded.
- The investor shall approach Ministry of Mines, Energy and Petroleum and fill the necessary form. During that process, the investor needs the following documents:
- Authenticated Memorandum and Articles of Association:- Under Ethiopian law, Documents Authentication and Registration Agency is mandated with authenticating MoA and AoA of a company. It must be noted that investors have the discretion to decide on the number of shareholders, par value of shares and type of business (there are 6 types of business organizations in Ethiopia: Ordinary Partnership, Joint Venture, General Partnership, Limited Partnership, Share Company and Private Limited Company). Often times establishing the mining company in the form of Private Limited Company or Share Company is advised.
- TIN Number:- The investor can get TIN certificate from Ministry of Revenue.
- Business Registration Certificate:- This can be obtained from Ministry of Trade. According to Commercial Registration and Business License Proclamation Number 980, the investor shall apply for Commercial Registration Certificate and Business License.
- Passport/Renewed ID of the General Manager
- Environmental Impact Assessment /EIA/
- House Rent Agreement:- If the investor is going to use his own property, he may be required to produce title deed proving that the property belongs to him.
- Work program together with the feasibility study
- Financial Statement:- This is necessary to prove whether or not the investor will carry out in mining business. To contrast with investment law, the minimum amount of capital under the investment law is USD 200,000.00 for foreign investors. However, this may not be the same for mining companies because mining business is basically capital-intensive work.
- Machinery, human capacity of the company
- A document showing that the investor has secured a mining place.
By the same token, it is relevant to know the documents required to obtain exploration license. Bear in mind that if the investor secures Exploration license, he does not need a separate investment permit.
- The applicant must demonstrate that it has access to financial resources and prove its technical ability to conduct the proposed exploration.
- The applicant has to show the estimated expenditure of the exploration.
- Environmental Impact Assessment must be approved.
- A document showing that the investor has secured a mining place.
The license is valid only for maximum 3 years. It can be renewed twice for a period of not exceeding one year each.
The company must commence with exploration activities within 60 days.
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