Egypt eyes gold rush with fresh exploration tender by March

Centamin’s Sukari gold mine, located 700 km from Cairo. (Image courtesy of Centamin)

Egypt will invite international gold-mining companies to take part in a new exploration tender after the North African country eased the rules to woo investors, according to a person familiar with the matter.

The tender will be announced by early March, said the person, who asked not to be identified because the information isn’t public.

Egypt, whose mineral wealth remains largely under-explored and undeveloped, is hoping that gold production can be a future source of growth for its economy, which is emerging from a sweeping International Monetary Fund-backed reform program.

Mining companies have long complained that Egypt’s system of royalties and profit-sharing agreements has made it difficult for them to explore and exploit minerals. Cairo, seeking to stoke investor interest, last month introduced new regulations that limited levies and dropped the requirement that miners form joint ventures with the government.

Vancouver-based miner Aton Resources Inc. secured mining rights last week, the first such award since Egypt’s main gold producer Centamin Plc achieved a license more than a decade ago. Aton says it has identified gold and base metal exploration targets in Abu Marawat.

Centamin operates Egypt’s only active gold mine, Sukari, which opened in 2009 and produced 480,529 ounces (15 tons) last year.

Egypt had all but abandoned mining after its British rulers left in 1952. The pharaohs, the Romans and the British all dug in the mineral-rich Arabian-Nubian Shield area in the Eastern Desert, but they lacked equipment that could go deep enough to extract much gold. Centamin introduced modern open-pit mining to Egypt that helped to identify deep-lying resources.

The tender would be the first since 2017, when a bid round saw little appetite from investors due to its uncompetitive terms.

Acacia Consultants, which advises mining companies in Egypt, said the industry is anticipating the swift awarding of exploration licenses under the new regulations.

“The international mining sector is very encouraged by the reforms Egypt has taken so far,” Cherif Barakat, its managing director, said by phone.

(By Salma El Wardany)

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