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Ethiopia Accuses Allana Potash of Tax Evasion

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Prime Minister Hailemariam Dessalegn on Monday accused Allana Potash, the Canadian company which was engaged in potash mineral exploration and development project in the Afar Regional State, of tax evasion.

In a press conference held in his office on Monday morning, Prime Minister Hailemariam was asked about the state of the Ethiopian mining sector and the exit of prominent mining companies such as Allana Potash and Israel Chemicals Ltd (ICL).


Hailemariam said that the case of Allana was related to tax evasion. “Allana owes the Ethiopian government some two billion birr in tax. Allana should pay this and the Ethiopian government will use legal means to recover its money,” the prime minister said.

Allana Potash, which was listed on the Toronto Stock Exchange through its subsidiary company Allana Potash Afar, was prospecting for potash deposit in the Danakil Depression in North East Ethiopia for more than six years and spent tens of millions of dollars on the exploration project. The company discovered 3.2 billion tons of potash which could be mined for 50 years. The company had the plan to invest 750 million dollars in developing the potash mine and export one million tons of potash yearly generating 430 million dollars.

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In 2013 the then Ministry of Mines granted Allana large-scale mining license that enables the company to mine the potash deposit.  However, due to the commodity market crash particularly the nose-diving price of potash in the global market, Allana was unable to raise the required investment capital to finance the project. To avoid massive shareholders dilution the management and board of Allana Potash decided to sell the company. Accordingly, in March 2015 the board accepted the buyout offer from ICL, the 6th largest fertilizer producer in the world.