Saudi Gold Mining Firms Capitalize on Ethiopia’s Mineral Renaissance Amid Strategic Shifts
Riyadh/Addis Ababa Saudi Arabia’s mining sector is rapidly expanding its footprint into Ethiopia, leveraging geological synergies and economic reforms to unlock one of Africa’s most underexplored gold frontiers. This strategic pivot marks a significant evolution in cross-regional investment within the resource-rich Arabian-Nubian Shield.
Strategic Partnerships Take Root
Ethiopia recently signed a landmark gold mining agreement with an unnamed Saudi company following the discovery of two deposits holding an estimated 40 tonnes of gold. The deal grants mining rights for the first deposit, with licensing for the second expected in 2025 . This aligns with Ethiopia’s push to attract foreign investment, highlighted by Ambassador Lencho Bati’s direct engagement with Saudi mining executives from METAB N. AL-NAMIR CO.LTD, AYYAD DHAIFALLAH AYYAD, and AL-OTAIBI LAW FIRM. These firms expressed concrete interest in deploying capital into Ethiopia’s gold and potash sectors following high-level briefings.
Bridging the Shield: KEFI’s Pioneering Model
London-listed KEFI Gold and Copper, operating through its Saudi joint venture Gold and Minerals Company (GMCO), exemplifies the cross-regional approach. GMCO CEO John Webster emphasized Saudi Arabia’s unique financing advantages during an interview: “The Saudi Industrial Development Fund (SIDF) provides loans covering up to 75% of project costs at competitive rates a level of support virtually unheard of elsewhere.” This financial leverage enables Saudi-associated firms to pursue opportunities abroad.
KEFI’s Tulu Kapi gold project in Ethiopia’s Oromia region the country’s first industrial-scale mine compliant with World Bank IFC environmental standards is now advancing toward production. With $320 million in financing secured, the project will launch major works in October 2024, targeting first gold by mid-2026. It’s projected to generate 140,000 ounces annually and create 5,000–10,000 jobs, establishing a blueprint for Saudi-Ethiopian collaboration .
Ethiopia’s Golden Calculus
Ethiopia urgently seeks to transform its mining sector into an export engine. The Ministry of Mines confirmed new gold projects in Benishangul, Gambela, and Tigray will boost national production by 10 tons annually. The flagship Kurmuk mine in Benishangul alone could deliver 9 tons per year, potentially lifting mining exports to $800 million this fiscal year . These developments align with Ethiopia’s broader economic reforms, including financial sector modernization aimed at attracting foreign capital .
Saudi Expertise Meets Ethiopian Potential
Saudi companies bring technical expertise honed in the geologically similar Arabian Shield. GMCO’s Jibal Qutman and Hawiah projects – hosting over 30 million tons of polymetallic resources demonstrate advanced discovery capabilities now being deployed across the Red Sea . Canadian explorer ANS Exploration, which entered Saudi Arabia in 2024 to mitigate regional risk, notes the country offers a “stable political environment” and “robust legal frameworks**” under Vision 2030 – conditions Ethiopia aims to emulate.
Challenges and the Road Ahead
While opportunities abound, hurdles persist. Ethiopia’s mining sector remains challenged by historical instability, though recent reforms signal commitment to change. KEFI Chairman Harry Anagnostaras-Adams acknowledged Ethiopia’s progress: “The country is now on a path of stability,” with mining central to its diversification strategy . Saudi investors must navigate evolving regulations but stand to benefit from first-mover advantage in a gold market where production costs ($800–$900/oz at Tulu Kapi) promise robust margins.
The Ripple Effect
This partnership extends beyond extraction. Ethiopia gains critical foreign exchange and job creation, while Saudi firms diversify geographically amid accelerated domestic mining investment. As Christopher Schmidt, CEO of ANS Exploration, observed: Saudi Arabia’s data-rich, pro-development environment enables rapid scaling a model now extending into Ethiopia .
Ethiopia’s gold may soon glitter across Saudi portfolios, forging an intercontinental mining corridor that could redefine resource geopolitics in the Arabian-Nubian Shield.
