Allegations of foreign market manipulation, ‘influential’ local importers accumulating sudden wealth, systemic regulatory abuse, and endless instability in reserve zones have all combined to stall Ethiopia’s mining ambitions. In this special report, The Reporter Magazine unpacks the paradox at the heart of the country’s iron ore sector: why a nation rich in unextracted mineral wealth remains trapped in a costly reliance on multi-million-dollar metal imports.
The name Waghimra is often associated with poverty, severe drought, and displaced vulnerable families on the urban streets of the country’s major cities. This reputation indeed has some truth to it, but it tells only part of the story. Beyond the surface, the mountain ranges of Waghimra—the Sekota Belt in the Amhara Region near the Tigray border—are far more than mere scenery: they house critical mineral wealth capable of driving national industrialization.
RELATED POSTS
The Monk Who Races Against Time to Heal Famine Trauma Through Mineral Wealth
Right after burying roughly 40 people in a single day due to droughtin 1984, local administrators from Lasta, Sekota, and Korem gathered for an urgent meeting. Their primary aim was to alert higher government authorities and request emergency humanitarian aid from the Red Cross and other organizations.
However, Getahun Mengistie, the administrator of Sekota at the time, proposed an idea that went far beyond temporary relief.
“I told my colleagues that asking for humanitarian assistance was necessary and helpful, so they should pursue it. But after witnessing those terrifying deaths, I decided to focus on a long-term solution,” recalls Getahun, who is now an 85-year-old monk. “We grew up hearing from our elders that our land was rich in minerals. I realized we needed to start tapping into what was beneath our feet, rather than continuing to starve and rely on foreign aid generation after generation.”
Proposing mining development amidst a devastating famine seemed bizarre and completely misplaced to many. Nevertheless, Getahun persisted.
“That was when I started collecting stones that looked unusual to me,” he recalls.
Over time, he gathered more than 120 rock samples and dispatched them to overseas laboratories for testing. The results confirmed that 18 of those samples contained high-grade minerals—predominantly iron ore.
Indeed, Sekota is one of the few places in Ethiopia with identified iron ore reserves. Major deposits have also been documented in Bikilal (Wollega), Melka Arba (Bale), Mai Gudo and Ghimira (Kaffa), and Mekaneselam (South Wollo).
Globally, iron is the fourth most abundant element in the Earth’s crust, with roughly 2.5 billion tonnes of ore extracted annually. However, high-grade deposits featuring iron content above 62 percent are increasingly scarce. In this regard, the Sekota Belt is reported to contain high-grade ore with iron concentrations ranging between 50 and 70 percent.
Now an 85-year-old monk, the former administrator has spent decades collecting stone samples for laboratory testing and conducting small-scale smelting experiments on his own. Through these efforts, he proved that iron ore could be processed locally by melting the stones to produce iron samples. “I had the close support of Ayalew Gobezie, former Amhara Regional State President, and Girma Woldegiyorgis, former FDRE President, as well as Ministers of Mines at different times. There was also a time when Chinese firms approached me to discuss the samples,” Getahun told The Reporter Magazine. Yet, despite his relentless dedication, the large-scale industrial production he envisioned has never materialized.
The elderly monk is not alone in his disappointment. None of the large investments have witnessed commercial iron mining, despite exploration licenses dating back decades.
Over the past decade, at least six major companies—both local and foreign—have explored iron ore reserves in the Sekota, with two even securing production licenses.
One was Access Minerals S.C, founded by controversial businessman and former Wall Street alumnus Ermias Amelga. The other was Sekota Mining PLC—a joint venture owned by an Ethiopian-born Italian citizen, Luciano Frattolin, and the Chinese CBRF Group. Exploration activities by these companies focused on locations surrounding Sekota, including Ziquala, Abergelie, and Shinaba.
Sekota Mining PLC went so far as to compensate local residents to clear the designated land. Ultimately, however, neither company made tangible progress, and both exited the region without results. The Reporter Magazine learned from sources that Ermias’s company is attempting to resume work in Sekota, though Ermias himself has not confirmed this.
Inaccessible Wealth
Acquiring extensive land concessions, spending years in exploration, and promising ‘imminent production’ before eventually stalling out has become a defining pattern of Ethiopia’s mining sector.This dynamic is far from unique to Sekota; it has played out across other mineral-rich areas, such as Mekaneselam in South Wollo.
When AgodoYo Metal & Other Minerals Enrichment Plc secured its exploration license for Mekaneselam in South Wollo years ago, it aimed to begin production within a few years. Today, the company has abandoned the sector altogether without ever extracting a single ton of ore. “Due to conflict and funding problems, we exited the iron ore sector and pivoted to coal production,” founder Mequanint Alemu told The Reporter Magazine.
Even at small and medium scales, reaching a meaningful operational stage and starting iron ore production remains elusive. More than a decade ago, the former Metals & Engineering Corporation (METEC)—a state-owned military-industrial conglomerate currently rebranded as Ethio Engineering Group (EEG)—constructed a shelter intended for the Wag Development Association to provide local youth with skills training in iron ore processing. However, the facility has remained abandoned ever since.
“We are simply trying to revive the project and push Ethio Engineering officials,” says Asrat Tadesse, a representative of the Wag Development Association in Addis Ababa.
As with many of its mineral resources, Ethiopia’s iron ore reserves remain poorly mapped, let alone extracted.
“We know there is vast potential, but we still lack a full picture of the reserves in our area,” says Abebaw Mekonen, head of the Waghimra Zone Mineral Resource Development Office.
This year, experts from the federal government camped in Sekota for over six months, assessing its iron ore deposits on-site.
“The results haven’t been shared with us yet. We hope to get them soon,” Abebaw told The Reporter Magazine.
In a recent report, the Ministry of Mines highlighted drilling of seven boreholes in the Sekota area, specifically in a location called Maylomi. The report estimates iron ore reserves in this specific site to be approximately two million tonnes.
The ministry’s report mentioned that a 5,000 sq. km reconnaissance survey assessing the geological features and mineral potential of the study area was conducted.
Nevertheless, a critical question remains: why do mining firms continuously fail to enter production years after obtaining exploration licenses?
Industry insiders point to several factors explaining why the sector repeatedly fails to move beyond empty promises and a recurring cycle of foreign and domestic companies arriving, acquiring permits, and quietly exiting.
Opaque Business Practices
As with other areas of mineral administration, iron ore resources are either poorly mapped or difficult to access. Furthermore, it remains unclear whether these specific sites hold sufficient reservesor any at all. Information is only available for a fee to Investors, and even then, it can be misleading.
Site overlap is a frequent issue, one that Ermias Amelga’s Access Capital encountered in Sekota, according to sources close to the matter.
On the ministry’s portal, the Ethiopian mining cadastre map lists several sites as licensed for exploration while simultaneously designating them as “pending”—a loophole that exposes the system to exploitation depending on who gains access.
Speculative Licensing in a High-Risk Industry
Some attribute part of the failure to reckless licensing, arguing that the system is widely exploited. “Investors secure exploration licenses without adequate preparation. They acquire the sites first and only then search for capital,” says an iron ore investor speaking anonymously with The Reporter Magazine. This approach, he explains, skews licensing data and obscures the sector’s real performance. “Many lack the funds to finish exploratory work, let alone advance to production. Exploration, after all, is a high-risk venture. You succeed only after many failures. That is how it works.”
In fact, such opacity regarding sector performance is common across the entire mineral industry. Frequently, multinational companies make headlines upon entering the country, promising to “revolutionize” the local market. Officials and investors alike talk up the potential boost to the sector, making ambitious promises about extraction and export volumes. Years later, however, these companies either silently exit or become locked in disputes with the ministry. Government officials then blame the companies for failing to deliver results. This pattern has become a common feature across the industry, and the iron ore sector is no exception.
In March 2026, the Ministry of Mines announced landmark mining agreements worth USD4.2 billion across three sectors: iron ore, potash, and gold. ZYTB-DIM Metals and Minerals Manufacturing PLC—a joint venture between Ethiopian and Chinese investors—was among the companies licensed to execute iron ore mining project in the Gimbi area of the West Welega Zone, Oromia Region. The outcome of this particular project is yet to be seen.
Lucrative Imports, Stalled Mines
Ethiopia remains heavily dependent on imported iron and steel to drive its construction, infrastructure, and manufacturing industries. Key suppliers of steel and steel billets include Turkey, China, India, Ukraine, and Russia. Although The Reporter made repeated attempts to obtain official trade data, government entities—including the Ethiopian Customs Commission and the Ministry of Trade and Regional Integration—remained unresponsive. However, online research estimates that the country imports 1.3 to 1.5 million metric tonnes of iron and steel products annually, costing billions of dollars.
As a result, importing iron products for the construction sector remains a highly lucrative business in Ethiopia—one capable of turning importers into millionaires and billionaires overnight. High-level politicians and other influential figures allegedly participate in the trade.
Industry observers note that high profit margins in the import trade, coupled with vested interests among well-connected elites and political insiders, have stalled progress in developing a domestic iron manufacturing industry.
The Ethiopian Association of Basic Metal and Engineering Industries previously warned against such practices, cautioning publicly that contraband and illicit imports masquerading as ‘legal’ trade pose an existential threat to local manufacturing.
A recent report by the Ministry of Mines indicates that domestic industrial iron production—likely referring to basic metals—stands at 0.5 million tonnes. According to the ministry’s evaluations, metal industry enterprises are currently operating at just 15.44 percent of their total capacity.
“Manipulation” by Iron Exporting Nations
Some other industry insidersbelieve foreign iron-exporting nations also play a major role in undermining the sector.
Former Minister of Mines Takele Uma once noted, “The foreign laboratories we rely on for sample testing belong to the same countries exporting iron to Ethiopia. Expecting unbiased technical evaluations from market competitors creates an inherent conflict of interest.”
He made the comment four years ago when the ministry issued an international tender for a consultant to conduct a detailed feasibility study of the subsector—a call that ultimately failed to attract qualified bidders. “We are going [forward] by ourselves,” Takele added at the time.
Solomon Mulugeta, president of the Ethiopian Association of Basic Metals & Engineering Industries, echoed a similar sentiment regarding systemic conflicts of interest: “Market dumping presents a significant barrier,” he explained. “Iron-exporting nations undercut prices to preserve Ethiopia as a captive market, rendering domestic production projects economically unfeasible.”
Among the world’s major iron ore producers, the BRICS+ members are particularly noteworthy. Global production is largely dominated by this bloc, with Australia being the main non-member exception. Key producers within the group include Brazil, Russia, India, China, Iran, and South Africa.
In Africa, even though countries like Guinea, Congo (Brazzaville), and Gabon possess vast deposits of iron ore, large-scale commercial extraction remains elusive. South Africa stands out being the continent’s dominant operational producer and exporter.
According to forecasts by the World Economic Forum, iron ore production in Africa is expected to exceed 200 million tonnes annually by the early 2030s.
Instability: The Ultimate Dealbreaker
Ultimately, the missing peace dividend is the central reason capital investment in Ethiopia’s iron ore sector remains out of reach. Iron mining demands substantial capital and a long-time horizon—two commitments investors are unwilling to make without stability.
Across these resource-rich regions, vast mineral deposits remain entirely unexploited. Many of these areas face ongoing displacement and stability crises, driven by persistent armed conflict.
For instance, Agodo YO—which announced the discovery of over 200 million tons of iron ore reserves in Mekaneselam five years ago—was scheduled to begin production “soon”. Instead, operations have stalled completely. “Since the outbreak of the Northern war, we have put the project on hold,” the group’s chairperson explained, adding that capital generation poses an equally daunting hurdle: “Foreign investors are reluctant to finance long-term projects in the absence of sustainable peace.”
The broader corridor—stretching from the historic town of Lalibela through Kobo and Abergellie to the Tigray border—remains volatile. When this writer visited the area in June 2026, active fighting broke out along the road connecting Lalibela to Sekota. Meanwhile, the vital highway linking Sekota to Mekelle, which cuts through several promising iron ore sites, was closed and heavily guarded by military checkpoints. The unmistakable scent of war hung in the air.
“Discussing long-term capital commitments to mineral extraction seems detached from reality,” noted a local guide who previously facilitated exploration visits. “People are wary of committing even small-scale capital when security is uncertain. What is visible today is primarily opportunistic, small-scale mineral smuggling, which has become widespread.”
Yet, the 85-year-old monk who has devoted his life to discovering the area’s mineral wealth—haunted by memories of those tragic deaths—still longs to see its potential fulfilled within his lifetime.
