Egypt's Eqat Gold Mining Company has completed preliminary studies for a gold extraction plant in the Eastern Desert with an initial investment of $300 million to $320 million. The company's chief executive, Mohamed Elassar, shared this information with CNBC Arabia. The studies, which cost $50 million, were presented to Prime Minister Mostafa Madbouly earlier in the month.
The Eqat Gold Mining Company is a joint venture formed by state-owned Shalateen Mineral Resources Company, the Egyptian Mineral Resources Authority (EMRA), and Wealth and Resources Mining Company. Their goal is to carry out exploration and development work in the Eqat area. This project was announced a year ago, with plans to build the plant in partnership with Wealth and Resources Mining Company, the mine's contractor.
The plant is expected to produce 120,000 to 150,000 ounces of gold per year once built, although no timeline has been disclosed. Currently, the company began regular commercial production and export shipments in 2023, producing around 8,000 ounces annually. All of the gold produced is exported in regular shipments every month to precious metal refinery firm Asahi Refining facilities.
The Eqat mine reserves are estimated to stand around 2.25 million ounces after completing the new preliminary studies for the plant. This is a significant increase from the previous reserves of around 1.1 million ounces in 2020, at the time of the mine's initial discovery. Egypt initiated experimental production at the Eqat gold mine in 2023, and investor interest in Egypt's mining sector has been growing.
The Egyptian government has stepped up reforms and measures aimed at creating a more attractive investment climate for mineral exploration. The goal is to utilize Egypt's mineral resources while encouraging the establishment of manufacturing industries that maximize the value of mining raw materials and support employment and exports. The mining sector is one of the five priority sectors in Egypt's economic plan.
Egypt aims to expand beyond exploration and extraction in the mining sector to include infrastructure, energy, engineering, services, processing, and manufacturing. The country also seeks to boost its domestic production by increasing exploration activities to narrow the gap between supply and demand. Egypt targets an annual gold output of 800,000 ounces by 2030 and aims to raise its mining exports to $10 billion by 2040, up from $1.6 billion in 2021.
The Egypt Mining Forum serves as an international platform to showcase promising investment opportunities and promote Egypt and the Arabian-Nubian Shield's mining potential. During the forum, Petroleum Minister Karim Badawi confirmed Egypt's goals, and President Abdel Fattah El-Sisi affirmed his support for mining investments. AngloGold Ashanti also targets a $400 million investment in Egypt and higher Sukari output.
Key points
- Egypt's Eqat Gold Mining Company completes preliminary studies for a $300-320 million gold extraction plant in the Eastern Desert.
- The plant is expected to produce 120,000 to 150,000 ounces of gold per year.
- Egypt aims to raise its mining sector's contribution to GDP from around one percent to six percent over the coming years.
