The Egyptian Mineral Resources General Authority is preparing a new gold exploration map to replace the bidding system next year, in which investors will apply for exploration license in a specific area within a pre-agreed period.
A source in the sector told Daily News Egypt that the new system separated the periods of exploration and production, so an agreement would be inked with the partner in case he discovered gold in the concession area.
He pointed out that the exploration licenses will be issued by the Minister of Petroleum without the need to issue a law or sign an agreement, which facilitates procedures, encourages investors, and preserves Egypt’s mineral resources as in the case of non-commitment of the partner, his license will be revoked.
The source explained that after the partner announces a commercial discovery, he shall submit a plan for the development of the concession area and an agreement shall be inked with the approval of the parliament.
He noted that old gold exploration agreements were wasting Egypt’s resources, as they allowed investors to work for long periods up to 30 years only in exploration phase without production.
The source added that the planned gold exploration license shall give the investor two years for exploration, to be renewed for more two years after evaluation, and then two more years after another evaluation, with a maximum of six years for exploration. The investors, then, will be granted tax and customs exemption if they make discoveries, otherwise, the licenses will be revoked.
The separation of exploration from production will make the investment more feasible because the investor would not have a long time to announce the commercial discovery, and will also simplify the legal procedures because the license will be issued with the approval of the Minister of Petroleum and Mineral Resources only.
Egypt has about 120 untapped gold mines, and the new form of agreements will determine Egypt’s share of production fairly, not as stipulated in the old agreements and will be in effect immediately upon production start, not after the investors recover their expenses, as was the case previously.