Did Egypt on the right path in mining industry?!

Egypt issued new executive regulations to the mining law that eliminate production Sharing Agreement (PSA) and going to a rent, tax and royalty regime

The Ministry of Petroleum hired Wood Mackenzie to assess the obstacles and identify the main requirements to make Egypt an attractive country for mineral exploration

The new Executive Regulations published January 2020 on the Egyptian Official Gazette (get Arabic version here) give the highlighted of the new regime and provide some terms & conditions, such as royalties and rent during the exploration and exploitation period.

This highlights include:

  • 8 years exploration period as maximum with EGP 5k a year per square km for the first 2 years and increased by EGP 5k every 2 years.
  • 15 years exploitation period and could be extended to same period once time as maximum.
  • Private mine and quarry operators will pay out royalties from 5% to 20% as maximum, and 1% of annual production allocated to contribute to societal development in the governorate in which the area of exploitation is located, income tax of 22.5%, and EGP 25k a year per square km as exploitation rent.

The royalty rates will be vary depending on the material as follows:

  • Gold: 5%
  • Calcite, Zirconium, Pyroxene, Mica and Zinc: 6%
  • Feldspar: 6-8%
  • Talc, Cassiterite , Diatomite, Muscovite and Glauconite : 7%
  • Magnesium, albite, Coal, Chromite, Quartz, Nepheline Syenite, Kaolin, and copper: 8%
  • Iron, Bentonite, Barite, Galena, Lead and Tin: 9%
  • Phosphate and Ilmenite: 10%
The Turin mining papyrus depicts mines in the Wadi Hammamat and is the oldest known map of its kind.
The Turin mining papyrus depicts mines in the Wadi Hammamat and is the oldest known map of its kind.

Mining in Egypt has had a long history that goes back to predynastic times. also Egypt has substantial mineral resources including tantalite, coal, gold, iron ore, phosphates, salts, quartz, zinc, tin, lead, copper, building and industry materials.

Egyptian Metallurgy Map (Building materials & Mineral Occurrences)

Egypt is hoping a change in rules might lead to a bonanza in gold production. Neighbouring Sudan produced an estimated 93 tons of gold in 2018, which according to the U.S. Geological Survey made it Africa’s third biggest producer.

The cabinet statement indicated that although the Egyptian Mineral Resources Authority had the right to form joint ventures with a minimum state ownership of 25%, private mining companies would not necessarily have to do this if their mining agreements were ratified by law.


One thought on “Did Egypt on the right path in mining industry?!

  1. The latest developments in the Gold Bid Round 2020/1 are deeply worrying with the removal of most of the well-known old mine sites such as Barramiyah, Atud and Um Rus. This will irreparably damage the credibility and transparency of the bidding process, and raises inevitable propsect of the dreaded “C word”. Not a serious approach if you wish to attract serious investors, explorers and gold miners. So regrettably the answer would appear to be no.

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