KEFI’s projects and their logistics dependency1 Jun 2026 18:02
KEFI operates two sets of assets. The flagship Tulu Kapi Gold Project is in western Ethiopia, a landlocked country. Ethiopia lost direct access to the Red Sea when Eritrea gained independence in 1993, and has since relied primarily on Djibouti for port access, with the majority of imports and exports passing through Djibouti’s ports. This means fuel, industrial equipment, and other imports depend on uninterrupted maritime transport.
Around 95% of Ethiopia’s trade by volume moves via the Addis-Djibouti corridor. For a project like Tulu Kapi that is currently in the construction and development phase — importing mining fleets, process plant equipment, and diesel — this dependency is very real.
Why the Bab el-Mandeb matters:
Should hostilities escalate (e.g. from Houthi activity), the Bab el-Mandeb could become a disrupted chokepoint — and for Ethiopia, whose maritime trade is overwhelmingly routed through the Djibouti-Addis corridor, this would represent a severe strategic vulnerability.
Any sustained decline in maritime traffic caused by escalation in the Bab al-Mandab would not only strain Djibouti’s import-dependent economy but also jeopardise the movement of supplies for over 120 million people in Ethiopia, amplifying the regional impact across industries.
KEFI’s awareness of this risk:
KEFI does appear to factor this in. KEFI’s investor materials note that Tulu Kapi is classified as an Ethiopian Strategic Project with priority service for logistics (e.g. diesel supply), and KEFI’s most recent equity placing was partly motivated by the desire to mitigate against general market risk pending an end to the war in the Middle East.
Saudi Arabia projects — less exposed:
For KEFI’s Saudi assets (Hawiah and Jibal Qutman), the Bab el-Mandeb is less of a direct constraint. Saudi Arabia has Pacific and Gulf coast access and its own well-developed port infrastructure, so supply chains for those projects are not bottlenecked through the same chokepoint.
Bottom line:
KEFI haven’t explicitly flagged the Bab el-Mandeb as a named development risk in project documents, but the structural dependency is clear: Tulu Kapi’s development-phase supply chain (equipment, fuel, materials) flows through Djibouti, which sits directly at the mouth of the strait. A sustained closure or severe disruption would raise costs, delay deliveries, and could affect the construction timeline. It’s a background geopolitical risk worth monitoring, particularly given the project is now in active construction with first gold targeted for early 2028.
Sign In
Follow the stocks
