Egypt's mining sector has attracted significant investments, with companies seeking gold and other minerals in a country considered one of Africa's most under-explored. Several companies awarded exploration licences are close to confirming gold deposits that can support commercial operations. Executives shared their insights on the sidelines of the Egypt Mining Forum. The increased investment is spurring interest in gold prices that have surged, topping $2,000 an ounce this year for the first time as investors sought a safe haven amid geopolitical and trade uncertainty.
Egypt overhauled its mining law six years ago, scrapping a production-sharing requirement and other rules to attract investors and develop its untapped resources. The goal is to increase mining's contribution to GDP to about 6% from less than 1% now. Vincent Morel, country manager at Akh Gold, stated that the more money available, the more drilling that can be carried out. Akh Gold, backed by Egyptian billionaire Naguib Sawiris, has made promising discoveries in one of its licence areas in the Central Eastern Desert.
The Central Eastern Desert is located on the Arabian-Nubian geological shield, a mineral-rich rock formation straddling the Red Sea and running south into Sudan, Eritrea, and Ethiopia. Exploration is underway in two other licence areas, although illegal miners have prevented access to parts of the concessions, at times violently. Morel noted that security has always been the biggest problem. Egypt's government aims to raise gold production to 800,000 ounces a year by 2030.
Currently, gold production in Egypt comes overwhelmingly from the Sukari mine, operated by South Africa's AngloGold Ashanti. The mine has yielded more than 6.8 million ounces and now produces about 500,000 ounces of gold a year. Shalateen Mineral Resources Company, a state-controlled venture, produced more than 900kg of gold last year. The company is partly owned by an economic arm of Egypt's defence ministry.
Newer entrants are working to increase production and prove larger deposits. Abu Marawat Gold Mines Company aims to start commercial production next year in a concession containing about 150,000 ounces of gold reserves. The company is a joint venture between Egypt's mining authority and Canada's Aton Resources. Afaq Mining has identified a deposit containing about 305,000 ounces of gold in the West Gabal Elba concession.
Afaq Mining plans to invest about $146m over the next four to five years in further exploration and an initial production facility. Red Sea Resources, a Canadian company, has started drilling in two of its three licence areas. The company wants to have certainty that it's drilling the best targets. Lotus Gold Corporation has identified "some good leads" across licence areas covering about 2,000km² and is planning to ramp up further exploration.
Other companies, such as Saudi Gold Refinery Co, plan to spend $10m on exploration over the next two years. The company expects to invest about $200m in Egypt by 2030 in total, including on mine development and production facilities. With increased investment and exploration, Egypt's gold ambitions are starting to take shape.
Key points
- Egypt aims to raise gold production to 800,000 ounces a year by 2030.
- The country overhauled its mining law six years ago to attract investors.
- Several companies have made promising discoveries in their licence areas.
