Ethiopia, in the Horn of Africa, has a variety of landscapes, like plateaus, mountains, and rivers such as the Blue Nile. It also has valuable natural resources, including gold, platinum, tantalum, potash, and copper. The Ogaden Basin has one of Africa’s largest natural gas reserves, with around seven trillion cubic feet still untapped.
The country also has strong potential for renewable energy: hydropower, geothermal, solar, and wind could together produce over 60,000 MW.
Its farmland supports crops like coffee and teff, and there are large areas for grazing livestock. Forest biodiversity contributes to livelihoods through products like honey and forest coffee, valued at $130 million annually.
Ethiopia’s Natural Resources And Their Locations
Here are the natural resources that have been found in Ethiopia, including their locations:
| Natural Resources | Locations |
|---|---|
| Gold | Oromia and Benishangul-Gumuz regions |
| Platinum | Yubdo district, Oromia region |
| Tantalum | Kenticha mine, Oromia region |
| Potash | Danakil Depression, Afar region |
| Copper | Meskana area, Southern Nations region |
| Natural Gas | Ogaden Basin, Somali region |
| Hydropower Potential | Blue Nile and Awash Rivers, Ethiopian Highlands |
| Agricultural Land | Ethiopian Highlands and Rift Valley areas |
| Forests | Western Ethiopia (Sidamo, Ilubabor, Keffa) |
| Water Resources | Blue Nile and Wabe Shebelle Rivers |
Discoveries Of Ethiopia’s Natural Resources
Gold mining in Ethiopia goes back over 6,000 years. Historically, gold from Ethiopia is believed to have reached ancient Egypt and possibly King Solomon and the Queen of Sheba.
For over 3,000 years, small-scale miners have worked riverbeds using simple tools to extract placer gold. In 2009, British and Saudi firms discovered new gold sites. Golden Prospecting Mining Co. found a 23-tonne deposit near Tulu-Kapi.
Saudi Sakaro found 18 tonnes in the Lege-Dembi gold belt. Another Tulu-Kapi site showed 30 tonnes of reserves. Since 2010, Akobo Minerals has explored the Akobo area. Segele has high-grade gold but is small. Joru is larger but has lower content.
Platinum mining started in the early 1900s in western Wallaga, mainly in Yubdo. Italy was once granted rights to mine there.
The Danakil Depression in Afar has long been known for potash. It holds large reserves, but extreme conditions have slowed big projects.
Ethiopia has relied on hydropower since the mid-1900s. The Blue Nile and Awash Rivers are key sources. Recently, the country has pushed to expand solar and wind energy to meet demand.
Viability Of Ethiopia’s Natural Resources
1. Economic Viability
Ethiopia has many natural resources, but most remain underused. Only about 1% of the country’s surface water is used for irrigation and power, even though there’s much more available.
This limited use has a real cost; soil erosion alone causes a loss of around $1 to $2 billion each year. Some projects show success, like the Tulu-Kapi gold mine, which brings hope for better resource use. Still, other areas, such as natural gas in the Ogaden Basin, remain mostly undeveloped.
2. Environmental Viability
Environmental concerns are growing, especially with how resources are taken from the land. Forests are disappearing because of the high demand for fuelwood, putting pressure on wildlife and ecosystems.
About half of the country’s farmland faces soil damage, making it less productive. The government has taken steps to address this by joining global agreements like the Rio Summit to balance development with protection.
Export Potential Of Ethiopia’s Natural Resources
With a diverse range of resources such as gold, coffee, and natural gas, Ethiopia has the potential to increase its exports and reduce its trade deficit. In 2023, Ethiopia exported goods worth $3.97 billion, with coffee and gold being the top contributors.
1. Current Export Contributions
Coffee is still the country’s biggest export, generating $1.31 billion in 2023 and contributing to more than 33% of all exports.
Gold generates $232 million, mostly from small-scale mining. Other important exports include dried legumes at $329 million, cut flowers at $258 million, and oilseeds at $246 million.
Main export destinations were the United States with $487 million, China with $402 million, and the United Arab Emirates with $314 million.
Ethiopia has more resources that haven’t been fully used yet, which could help increase export income if properly developed.
The Ogaden Basin has about seven trillion cubic feet of natural gas, but a lack of infrastructure and investment has slowed development. If addressed, this could become a major source of revenue.
The Danakil Depression contains large potash reserves. If mining increases, Ethiopia could become a key player in the global fertilizer market.
Ethiopia also has strong renewable energy potential, especially in hydropower, wind, solar, and geothermal sources. The country could generate over 60,000 MW and possibly export energy to nearby countries.
2. Global Market Trends
The global demand for Ethiopia’s key exports is growing:
- Coffee is highly sought after in Europe and North America due to its premium quality.
- Gold remains a stable commodity in the international market.
- The increasing global focus on renewable energy presents opportunities for exporting hydropower to neighboring countries like Sudan and Kenya.
Economic Impact Of Ethiopia’s Natural Resources
Ethiopia’s natural resources play an important part in its economy. They contribute to the country’s GDP, create jobs, and support export earnings. These resources include minerals like gold and platinum, and crops such as coffee and teff.
1. Contribution To GDP
Natural resources are a major part of Ethiopia’s GDP. Agriculture is the largest sector, accounting for about 35.5% of the GDP. Though mining only adds around 1.5%, it has strong growth potential, especially through gold exports.
2. Job Creation
About 72.2% of Ethiopia’s workforce is in agriculture, mainly small-scale farming. Artisanal mining for gold employs around 1 million people. Forestry and wildlife also offer jobs in eco-tourism and forest management.
3. Export Revenue
Gold brings in nearly 10% of the country’s foreign exchange and has room for growth. Coffee is still the top export product. Other agricultural goods, including livestock, add significantly to exports and have space to grow further.