Gold Mining in Egypt
Gold Mining in Egypt
Mining in Egypt is a risky investment because you are dealing with the Egyptian military not a ministry of mining or a scientific organization. last year four mining companies left Egypt or they are rejected by the military order.
After 25 Jan 2011 movement "The Egyptian revolution" the national reserve goes down to support police and military expanse for re-controlling their benefits they might loose and they succeeded. So, they get back in charge of Egypt again. Then they searched for any foreign direct investment to restore the national reserve to its level. They reviewed oil and mining contracts to secure more income for the country. But after the Egyptian revelation fail the Egyptian Armed Forces working hard to increase their income and they working with The Egyptian Mineral Resources Authority (EMRA) to increase foreign direct investment (FDI) in mineral industry. The mineral industry estimated 2.5% of the total national income.
Centamin is the only one gold mining company working in Egypt now and they still struggling with the new Egyptian low of mining. the deal made like oil production contract 50–50 joint venture.
The main agreement point of Sukari mine was the following:
- 3% royalty to the government
- 50% - 50% of the net profit
- The government will not share any financial losses or any expenditure before or after starting production.
- The government will allow you to restore your initial investment i.e. exploration and establishing the mine equipment.
In my opinion with this agreement as a model of mining contract; I do not think any mining company will invest in Egypt.
The main issue in Egypt mineral industry is there is no mining code in Egypt. Your are just dealing with bureaucratic low's of the Egyptian Armed Forces and their consultants.
The "Mining Code" refers to the whole of the comprehensive set of rules, regulations and procedures to regulate prospecting, exploration and exploitation of minerals.
From individual perspective both government i.e. "Egyptian Armed Forces" and investor does not care about income earned per person who does not working in the military or even did not have a job at all. Just all looking for safe investment what ever the cost.