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Petroleum Ministry considers gold bid extension due to coronavirus - Daily News Egypt

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Petroleum Ministry considers gold bid extension due to coronavirus

International bidding interest in Eastern Desert’s gold stores: Source

The Ministry of Petroleum and Mineral Resources is considering extending the bidding period on gold mining in the Eastern Desert due to the coronavirus. The move comes after initial bidding window, which opened mid-March, was extended due to close 15 July.

A petroleum and mineral ministry resource  told Daily News Egypt that the worldwide spread of the coronavirus has hindered bid submission from international companies. Further delays have occurred due to  Egypt’s own precautionary measures, including night-time curfews and flights suspension.

The source emphasised that there has been high international interest in submitting bids on the areas offered in the Eastern Desert. He said that these areas have been already studied.

The source also said that the bidding process will be based on the “blocks” system, with each block approximately 56,000sqm in area. There will be a further 320 blocks for research and exploration purposes.

The source stressed that international mining companies and the concerned authorities have agreed on an improved mechanism for launching gold bids. He said that approximately EGP 5,000 per square kilometer, to be paid by the winning companies, will be collected annually.

Companies are obliged to pay the rental value during the exploration period for the areas in which they have obtained a search licence. Upon completing commercial exploration and issuing a production agreement, the rental values ​​will be discontinued. They will then move to the system of royalties, taxes and participation percentage.

The new system includes collecting a minimum production royalty of 5% immediately after gold production starts in the concession area. Taxes of 22.5% will be applied to production from the first day, in addition to a 15% participation rate for the Mineral Resources Authority.

Tarek El Molla, Minister of Petroleum and Mineral Resources, said in previous statements that gold exploration bids to investors will be offered every four months based on the blocks system.

El Molla added that gold research and exploration areas were expanded to encourage international companies to invest in Egypt’s mineral wealth.

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