Egypt’s mining sector has witnessed a remarkable transformation in the past year, thanks to new legislative reforms and investment opportunities that have attracted both local and foreign investors. The sector, which has a long history of gold mining and a rich mineral potential, is aiming to become a significant source of GDP growth and diversification.
The main catalyst for the sector’s revival was the issuance of the new executive regulations of the Mineral Resources Law in January 2020, which replaced the outdated and unattractive concession system with a modern royalty and tax system. The new regulations also introduced more flexibility and transparency in the licensing process, as well as incentives for exploration and exploitation activities.
Following the new regulations, the Ministry of Petroleum and Mineral Resources launched its first international bid round for gold mining in February 2020, covering an area of about 56,000 square kilometers in the Eastern Desert and the Red Sea. The bid round attracted 11 companies from eight countries, including Canada, Australia, the UK, and Egypt. The ministry awarded 82 exploration blocks to 11 companies in November 2020, with a total investment of $60 million.
The bid round was hailed as a success by the minister of petroleum and mineral resources, Tarek El Molla, who said that it reflected the confidence of the international mining community in Egypt’s potential and reforms. He added that the ministry was preparing for a second bid round for gold and other minerals in 2021.
The ministry also signed a contract with the Canadian company Barrick Gold, the world’s second-largest gold producer, to explore for gold in 19 blocks in the Eastern Desert, with an investment of $8.8 million. This was the first time that a major global mining company entered the Egyptian market, signaling a new era for the sector.
Another milestone for the sector was the inauguration of the Sukari gold mine expansion project in October 2020, which increased the production capacity of the mine from 480,000 ounces to 540,000 ounces per year. The Sukari mine, operated by the Australian company Centamin, is the largest and only operating gold mine in Egypt, with a total investment of $1 billion since 2007.
The ministry also announced the discovery of a gold deposit with estimated resources of one million ounces in the Eastern Desert, in an area of 170 square kilometers. The deposit was discovered by the state-owned Shalateen Mining Company, in cooperation with the Egyptian Mineral Resources Authority (EMRA).
The ministry’s efforts to develop the mining sector are part of the government’s vision to diversify the economy and create new sources of income and employment. The sector is expected to contribute $7 billion to the GDP by 2030, up from $700 million in 2020. The sector is also expected to create 100,000 direct and indirect jobs by 2030, up from 38,000 in 2020.
The mining sector’s prospects are bright and promising, as Egypt has a diverse and untapped mineral wealth, including gold, copper, iron, phosphate, tantalum, and salt. The sector also has a competitive edge in terms of its strategic location, infrastructure, and human resources. With the new reforms and opportunities, the sector is poised to become a key driver of Egypt’s economic growth and development.
Source: Mining Weekly
