Construction on KEFI Minerals PLC's Tulu Kapi gold project will start in October amid a new report recommending upgraded security, but Executive Chairman Harry Anagnostaras-Adams says the situation in Ethiopia has "settled down," albeit with more petty crime.
KEFI announced Sept. 4 that it had made the decision to start the two-year development phase with the Ethiopian government and ANS Mining Share Co., and that it had received the first updated security update, from Constellis, since 2016.
What could have been a two-year process to get to this point was turned into five years thanks partly to setbacks that included financiers backing away amid a 10-month state of emergency that ended in August 2017, then another from February to June 2018.
Authorities tightened security on the project in June 2019 as a precautionary measure after a failed coup attempt 500 kilometers from the site.
Anagnostaras-Adams said in an interview on the sidelines of Africa Down Under in Perth, Australia, on Sept. 4 that the tightened security in June was also made upon KEFI's request as a microscope, GPS device and mattresses, among other things, were stolen from the exploration camp, which shocked the company.
He said petty crime had risen in Ethiopia since it has become less autocratic and more democratic, as people "take advantage of new freedoms," but at the same time the "enormous" transformation the country was undergoing is "overwhelmingly positive," particularly in welcoming back many people from exile.
The project site has now upgraded the number of security personnel permanently stationed there from three in 2016 to 39, the chairman said, paid for by the government.
Anagnostaras-Adams said that by the time the project moves into full construction at the end of 2019, there will be "the equivalent of a high-security military compound" protecting the site's people and equipment.
He said the new security regime recommended by the updated report reflected the sentiment around the country more broadly, that being a shift from a "rigid preemptive iron fist approach to security, to an iron fist that's only wielded at the request of the community."
The chairman added that the project has solid support from the community which is "impatient" for it to start production due in the third quarter of 2021, and from investors who are fine with the company spending money in coordinating the extra security measures.
"The political situation in the country has settled down and the security situation is settling down," he said.
The government has thrown its support behind Tulu Kapi as it will be Ethiopia's single-largest export generator, he added.
Ethiopian Minister for Mines, Petroleum and Natural Gas Samuel Kurke said in KEFI's Sept. 4 statement that the project has "full support" from his government at all levels, "because it is a priority for the country and community."
Anagnostaras-Adams also said in the statement that Tulu Kapi will be Ethiopia's first modern mine development for decades.
