With the aim of attracting foreign investors in the mining industry, the Egyptian government has reformed the laws so they expect a promising future.
Another of the Al-Sisi government projects is to build a new city that will house all sectors related to the precious metal.
Gold and jewelry exports from Egypt have increased notably during the past year 2020, increasing their contribution to the country’s economy. The reform, two years ago, of the mining laws has allowed the entry of new investors in the sector.
The data published by the Egyptian Export Council and collected by the local daily Al-Monitor reveal that in the first nine months of 2020, the income derived from exports of gold, jewelry and gems by Egypt amounted to 2.444 million dollars, 75% more than the 1,392 million that were entered in the same period of 2019.
At the end of the third quarter of last year, Egypt also had 80 tons of gold in its strategic reserves, which represented 11.9% of the total, according to data published by the World Gold Council.
The increase in gold extraction and export figures is the result of the reforms introduced in 2018 in the Mineral Resources Law number 198, by which the rates imposed on investors in gold were reduced, which has attracted many companies’ nationals and locals to mine gold in Egypt.
Among these companies is the Canadian mining company Aton Resources which, on January 4, confirmed its intention to build the second gold mine in Egypt, after the Sukari (operated by Centamin): “Aton starts the new year with the sector Egyptian miner showing tangible signs of development, with optimism and determination to achieve success. We are trying to develop the second operating gold mine in the country, in Hamama”.
The miner obtained a license to work in Egypt in February last year, after new amendments to the Mining Law were ratified. In addition to Hamama, Aton is conducting exploratory drilling in the Rodroin and Abu Marawat areas (pictured), where there are good prospects of finding significant gold deposits.
The intervention of foreign companies in the gold mining sector is vital for Egypt, since exploration work requires an important technological infrastructure that they already have, and the experience derived from their activity in other parts of the world.
In addition to attracting international mining companies, the Egyptian government also wants to encourage the consumption of gold, in the form of bullion and coins, among its citizens.
The local industry is specializing in the manufacture of gold pieces and jewelery, which are then exported, mainly to the United Arab Emirates, the main distribution center in the Middle East.
Indeed, the Emirates have been the country that imported the most gold, jewelry and precious stones from Egypt in 2020: 69% of the total, valued at 1,495 million dollars, compared to 823 million in 2019, according to the latest data released by the General Organization for Export and Import Control.
A New City of Gold
Faced with the growing demand for Egyptian gold jewelry for export, the Government plans to build a new city that would house all the services related to the production of gold and jewelry.
On January 16, President Al-Sisi formally ordered that the creation process begin and the budget be allocated for the construction of an integrated city to house the gold industry and trade.
An initiative that has been very well received by the various players in the sector, who see it as a first step towards the rebirth of gold mining in the country, which can provide a huge boost to the Egyptian economy.
The new city will be located on land close to the city of El-Obour, northeast of Cairo, and will include 400 gold production laboratories, another 150 for training and a large study center. It will also have a permanent exhibition and spaces for merchants.
By José Ángel Pedraza