05 Mining

Historically, Egypt has been home to a substantial mining industry dating back to the predynastic era. The area known as the Arabian-Nubian shield between Egypt’s Eastern desert and the Sinai Peninsula is particularly rich with mineral resources including iron ore, steel, gold, marble, copper and limestone, as well as a number of other precious and base metals. Despite this, only one gold mine has been operative over the last 70 years suggesting that the sector is hugely underutilized today.
Keeping in line with the government’s overall initiatives to take full advantage of the potential within the country, a bid-round for new gold mining concessions was recently announced in an effort to revive the industry. Fortifying this industry would undoubtedly help to stimulate the country’s economy as well as generate more revenue from tax and increased foreign direct investment. Additionally, the sector would employ and train a large percentage of the population, particularly those within Upper Egypt where there is a high level of unemployment. Potentially, gold reserves within the country could provide more than 300 tonnes, and to help tap into this pool of opportunity, a more flexible Mining Law was issued, along with a governmental goal of expanding the mining sector to
reach 5 % of GDP by 2024.

Similar to the oil and gas sector, mine operation can commence through a profit-sharing agreement with the government. Below you will find an over view of some of the rules governing this sector:

Mineral Resources Law No. 198/2014 

This law governs the exploration of raw materials sourced from mines, quarries and salt pans, and appoints the Egyptian Mineral Resources Authority (EMRA) as the competent authority to run and manage the activity of mineral wealth in Egypt.
The law also puts forward the licensing criteria which must be complied with for exploitation, as well as the costs associated with licensing:

Licensing:

– Obtain a valid search permit for the required area of exploration stating clearly whether the whole area will be exploited or only for part of it.
– Provide a technical report indicating the existence of raw materials within this area. This report should show the economic returns from the exploitation and exploitation program and the necessary guarantees to facilitate exploration.
– EMRA must then approve the license. If the application is rejected a reasoned decision must be provided to the applicant.
– The license cannot be granted for more than 15 years.

Associated Costs:

– Each licensed area will have its own fees which the licencee will be
obliged to pay.
– Annual rent, as determined by the Executive Regulations of the law, will also need to be paid a year in advance. EMRA may however, change the annual rental value of ore mines every four years, with the consent of the Prime Minister.
– Annual royalty fee of no less than 5% of the annual production of the raw value must also be paid.
– 1% of the annual production value of the ore mines must then be allocated to contribute to the development of the province where the exploitation area is located.

Ongoing Projects 

1 | Golden Triangle Project

Known as the ‘Golden Triangle’ due to its location on the Eastern Desert which is known for being rich with gold. The economic zone has been opened to entice investors to help revive the sector. The area will consist of an industrial, commercial, mining, and tourism center covering an area of 6000 km² in the region between Qena and the Red Sea Governorate.

2 | Loesche Cement Plant

The German construction company has partnered with the Ministry of Defense to open a plant with three vertical roller mills 500 km south of Cairo in Sohag. The Chinese Chengdu Design & Research Institute (CDI) will be the general contractor for the project, having previously worked with Loesche on a number of projects within the country. The plant’s daily capacity is due to increase to each 6,000 tons with Loesche providing 18 new vertical roller mills to accommodate this value.

3 | Projects Introduced by the Ministry of Trade & Industry:

The Ministry of Trade and Industry have also opened a number of projects for the mining sector which investors may contribute in.

The projects are for:

– Crushing and grinding of talc
– Production of salts for various uses
– Production of processed calcium carbonate
– Crushing and grinding of dolomite and feldspar

The Ministry has also identified alteration zones as the most promising areas for mineral exploration in the Central Eastern Desert.