Egypt in talks with companies to promote new gold-mining tender

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Wed, 19 Feb 2020 - 03:10 GMT

Egyptian businessman Naguib Sawiris – Press photo

Egyptian businessman Naguib Sawiris – Press photo

CAIRO – 19 February 2020: Egypt has started talks with one of the companies to promote a new tender in gold-mining in Egypt, Egyptian Businessman Naguib Sawiris told Bloomberg Tuesday.

Sawiris who is involved in the talks didn’t specify which of his companies would submit bids. “We are willing to participate in any area that could be promising,” he clarified. Sawiris is currently the chairman of La Mancha, which is the biggest shareholder in Endeavour Mining.

According to sources, Egypt will announce its first exploration tender in about 3 years by March, in a move to explore its undeveloped and undiscovered mineral wealth.

Lately, Endeavour tried to acquire Centamin at $1.9 billion but the company rejected the offer last month. Endeavor operates in the Ivory Coast, Burkina Faso and Mali.

Centamin Egypt operates the Sukari gold mine, which is the country's sole gold-exporting mine. Located in the south-easternmost region of the Eastern Desert, Sukari mine is the first large-scale modern gold mine in Egypt, with a base case production rate of about 500,000 ounces per annum, according to the official website of Centamin.

According to Bloomberg, Egypt’s last exploration tender in 2017 attracted little appetite from international companies and was shunned by gold producer Centamin Plc, operator of the country’s only active gold mine, Sukari. The mine opened in 2009 and produced 480,529 ounces (15 tons) last year.

Sawiris has put as much as half of his wealth into gold.

“The new regulations are more favorable and more realistic and would attract foreign investments to the sector,” said Sawiris. The government is planning a roadshow in Canada next month and will promote the new opportunities at a global mining conference, according to the 64-year-old, whose brother Nassef is the chief executive officer of OCI NV and the country’s richest man.

Mineral Resources Act amendments include setting up a new authority in charge of licensing mines and quarries, taking the power to issue and control licenses away from governorates. They would also lift a previous 16,000 sqm area limit, allowing the authority to issue licenses to areas of unlimited size. Licenses could also be renewed for more than one term.

Moreover, there will be separate contracts and agreements for exploration and extraction, and companies will have to pay a minimum royalty of 5 percentof annual production, with a 20 percent cap being set.

“Mining firms will have to pay 6 percent of a mine’s annual production to the home governorate. Governorates can recommend amending this 'rent' but a final say can only come from the prime minister. Under current legislation, governorates had the power to dictate the payout every four years,” according to the amendments.

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