Egypt aims to become a world class mining hub, raising exports to $10bn by 2040, up from $1.6bn currently, Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla said on Thursday.
His statements came during AmCham Egypt’s Monthly Virtual Meeting addressing “Egypt’s Strategy to Promote Investments in the Mining Sector.”
El-Molla revealed that the ministry plan aims to raise the mining sector contribution to GDP to reach $20bn by 2040, and offering more than 200 exploration licenses annually.
He showcased the reforms that the ministry did to the sector, such as the executive for the amended mining law was announced adopted in early 2020. The amendments aim to make the sector investment friendly. It tackled all the issues previously raised by investors, such as parliamentary approval for each agreement.
In 2015, Egypt was ranked as the second worst mining destination, now it has improved by more than 40 ranks due to the modernization programme launched by the ministry.
It included replacing profit sharing agreements with tax and royalty system in line of international standards. “This new set of royalty and taxes will maximise value creation for Egypt and the investors,” El-Molla added.
Improving the value chain is an integral part of the modernization programme second phase, by improving the mining added value instead of just exporting raw mineral.
The second bid round is still accepting bids until 15 March, it covers different minerals, we added different ores such as copper, zinc and several others. “Part of the evaluations in the bid will be the added value, if a company propose plans for doing so.”
“I believe that we can replicate Egyptian successes in the oil and gas sector in the mining sector, that’s the cornerstone of the programme. The major mining companies who are aiming to invest in Egypt are currently in the testing phase,” he stressed.
“When we talk about mining it intersect with several other ministries, that’s why we need to ensure that the investor who come to us has an easy and clear processes.”
Newmont – one of the top US mining companies – official asked about if the companies would be allowed to sell their gold production as they see fit, or if they will need to sell it to the to be established gold refining city.
El-Molla revealed that the refinery will not be mandatory, it is a way to help investors to sell their production ready-refined, but it will be optional.
To turn into a mining hub, Egypt aims to have a full mining infrastructure, including labs, so that samples can be analyzed here, he added.
In a bid to boost Egypt’s industrialization plans, El-Molla agreed with the industrial committee in the parliament in a step to create a link between mining and their related industries.