Minister of Petroleum and Mineral Resources Karim Badawi stirred debate in early May when he stated that “no new contracts for the export of raw phosphate will be concluded, with priority being given to industrial processing to maximise the added value of the raw material domestically, while being fully committed to all existing export contracts.”
Badawi was speaking on the sidelines of the general assembly meeting of the Misr Phosphate Company.
The debate has focused on the strategic significance of the decision, particularly in terms of generating added value from raw phosphate before export and the positive impact this could have on overall economic performance.
At the same time, questions have been raised regarding a number of challenges, most notably the capacity of domestic industries to absorb the substantial volumes of raw phosphate produced, the status of existing contracts, the anticipated dollar-denominated revenues of companies already engaged in phosphate exports, and the ability of these companies to adapt to the surplus that would result from a ban on exports.
Many industrialists in the sector argue that the minister’s remarks reflect a policy direction that the state has been pursuing for some time. Their principal concern, particularly among companies that extract phosphate for export purposes, is the mechanism through which the decision will be implemented if adopted.
Immediate enforcement could significantly disrupt the sector, although Badawi expressed the government’s “full commitment to all existing export contracts”.
According to estimates by the Chamber of Petroleum and Mining, nine companies operate in Egypt’s phosphate extraction sector, with the bulk of their output slated for export. Central Agency for Public Mobilisation and Statistics (CAPMAS) figures indicate that Egypt ranks third globally in confirmed phosphate reserves — first in the Middle East and second in Africa — with reserves exceeding 2.8 billion tons. It also ranks sixth worldwide in phosphate ore production.
Annual phosphate exports amount to 12 million tons, while domestic demand from the fertiliser, metallurgical, animal feed, food-preservation, ceramics, porcelain, and dental-material industries stands at around four million tons per year. This leaves an annual production surplus of between seven and eight million tons, most of which is exported.
Brazil is the leading importer of Egyptian raw phosphate, driven by the strength of its agricultural sector and its high demand for fertilisers. It is followed by Japan, India, and the European Union countries.
According to Hamdi Abdel-Aziz, director of the Chamber of Petroleum and Mining Industries at the Federation of Egyptian Industries, the decision that no new contracts will be concluded for the export of raw phosphate, while honouring existing agreements, is based on a fundamental objective: maximising added value rather than exporting phosphate in its raw form.
“This would involve converting phosphate into higher-value industrial products such as phosphoric acid, phosphate fertilisers, and phosphate-based chemical products,” he explained.
However, he noted that phosphate exports as raw ore generate high foreign-currency revenues. A complete transition to value-added production would require significant investment, advanced industrial infrastructure, and sufficient time to achieve, he pointed out, adding that attaining this goal would bring economic benefits to Egypt, including higher returns per ton of phosphate ore, the creation of new employment opportunities, and additional industrial and technological investment.
“It is important to strike a balance between preserving the foreign-currency revenues currently being generated and building an advanced processing industry capable of absorbing domestic phosphate production,” Aziz said.
Mohamed Hanafi, director of the Chamber of Metallurgical Industries, believes Egypt’s reserves are sufficient to meet the requirements of expanded domestic production while also supporting exports.
Badawi’s statement is also in line with the state’s strategy of promoting investment and advancing structural economic reforms.
In June last year, the Official Gazette published a decision transforming the Egyptian Mineral Resources Authority into an economic authority under Law 87/2025, renaming it the Mineral Resources and Mining Industries Authority.
The move was intended to grant the authority financial and administrative independence in order to enhance investment in the sector.
Restricting the export of raw materials to maximise added value and employment generation can also be viewed as an implementation of this orientation.
The government has already attracted foreign investment to the phosphate production sector. Among the most prominent projects are the Chinese-owned CJN plant, with investments of $1 billion, and the Indonesian-owned Indorama plant, with investments of $525 million.
In addition, a new phosphoric acid plant is being constructed in the New Valley governorate, with an annual production capacity of 450,000 tons.
According to the Ministry of Petroleum and Mineral Resources, these investments are intended to create new jobs, develop integrated national industries, and reduce dependence on imported phosphate-based products.
The phosphoric acid project has entered the implementation phase, with early work commencing at the project site in the New Valley on 1 January and construction activities moving forward, Badawi said at the meeting of the Misr Phosphate Company.
He also referred to “steps taken to establish the planned phosphate fertiliser complex in Ain Sokhna, in cooperation with Indorama, using state-of-the-art technologies and with a projected annual production capacity of 600,000 tons.”
A growing number of Indian companies have expressed an interest in making new investments in Egypt’s phosphate and fertiliser sectors, particularly in Ain Sokhna and the New Valley, Khaled Abul-Makarem, chairman of the Egyptian-Indian Business Council, was quoted as saying in May.
This interest reflects Egypt’s substantial phosphate reserves, as well as the progress that has been achieved in infrastructure, transport networks, and energy services, he added.
He pointed out that the Ain Sokhna Phosphate Fertiliser Complex comprises nine factories with investments worth LE16 billion. Moreover, the New Valley governorate hosts several specialised projects, most notably the phosphoric acid complex at Abu Tartour, with investments exceeding $1 billion.
The Abu Tartour Plateau is home to one of Egypt’s largest phosphate reserves, estimated at 980 million tons.
* A version of this article appears in print in the 4 June, 2026 edition of Al-Ahram Weekly.
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