The Egyptian Ministry of Petroleum and Mineral Resources has prepared new terms and rules to govern gold mining and exploration operations in Egypt to replace the current rules, which have been in place since 2017, an official source told Ahram Online.
The new terms will be put into effect if parliament approves a new law prepared by the ministry and is currently being discussed in the House, the source explained.
The source, who spoke on condition of anonymity, said that the current terms for gold mining operations are not functional for the industry nor are they attractive for new investments.
The source added that the ministry has contracted a US research company to assess the current system applied in the mining industry sector in Egypt in order to help the ministry put in place more effective procedures of tapping into mineral resources in the country.
“The company finished its work in the first half of 2019 and the ministry is now proposing new legislation on mining gold and mineral resources for parliament to pass, taking into consideration the results of the report prepared by the US company. If passed into law, the new legislation would prove to be a turning point for this sector as it aims to attract more investments, especially in gold mining," the source said.
"Egypt is estimated to have some 7 billion ounces of gold ore reserves in about 122 concessions,” the source added.
The petroleum ministry has announced that there are essential amendments needed to the 2017 law, which could streamline procedures for granting licenses to investors and offer more flexible terms for exploring and bidding.
During the ongoing discussion of the new amendments in parliament, the ministry said that it will focus on improving the financial system of operations in the mining sector; setting a maximum royalty cap of 20 percent and a minimum of 5 percent, and raising societal development contribution of mining firms to respective governorates from 1 percent to 6 percent.
There is currently one gold mine in operation in Egypt.
The four companies that won the right to operate five gold mines in the Eastern Desert in a 2017 bidding have not launched operations.
Youssef El-Raghi, the owner of El-Sokari Gold Mine, the only gold mine currently in operation in Egypt, told Ahram Online that although the mining and mineral resources law was amended two years ago, it is still not suitable for the mining industry and could not attract any new investments over the past two years.
El-Raghi said he believed that the current terms of the bidding process were not conducive to establishing real investments and, he added, there is a strong need for amendments.
The Egyptian Mineral Resources Authority held the first gold mining auction for five concessions in the Eastern Desert in 2017 under the terms that the government would get up to 50 percent of profits from gold exploration.
Applying new bidding terms means that this auction will be cancelled, paving the way for new bidding to take place.