Centamin PLC suspends operations at Sukari Gold Mine

Karim Hafez , Thursday 13 Dec 2012

Egypt's largest gold producer, Centamin PLC, suspends operations at its Sukari Gold Mine due to dispute over fuel payments

gold mine
Operations at Egypt's largest gold mine hang in the balance during labour dispute (Photo: Centamin Egypt)

Centamin PLC, Egypt's biggest gold producer, has suspended operations at the Sukari Gold Mine for the second time.

The Egyptian General Petroleum Corporation (EGPC) has demanded Centamin pay almost LE403 million for fuel subsidies dating from between December 2009 and January 2012.

The gold producer has said the EGPC's claim is illegal and arbitrary.

"EGPC has refused to authorise the future supply of diesel to the Sukari Gold Mine until the amount is paid," said company chairman Joseph El-Raghy in a press statement on Thursday.

Fuel supplies have reportedly reached critical levels, forcing management to put the mine on maintenance and halt gold production until the dispute is resolved.

Ismail Abdel-Khalek, Centamin's head of exploration, told Ahram Online that customs officials had blocked the export of one tonne of gold, citing the need for approval from the finance ministry even though this is not usually required.

"The government seems unwilling to respect its binding contract with Centamin which has been in place since 1995," said Abdel-Khalek.  

Centamin declared it would take vigorous steps, through legal or other avenues, to continue gold extraction in Egypt, and declared it had all the necessary permissions from the Egyptian Mineral Resources Authority (EMRA).

The company was compelled to halt production in October, after an Egyptian court ruled its right to operate the Sukari mine was invalid. Centamin launched an appeal against the verdict and resumed its operations shortly afterwards.

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