Fayez Ezz Elddin Head Of the Canadian Chamber of Commerce in Egypt - Archive/sami wahib
Egypt is on track to become a regional hub for gold purification as the country is expected to see a leap in gold production rates over the coming period after four mining companies won exploration and production bids offered by the Egyptian Mineral Re- sources Agency (EMRA) to explore gold and other metals in the Eastern Desert and Sinai. Business Today Egypt sat down with Fayez Ezzeddin, head of the Canadian Chamber of Commerce in Egypt, who disclosed that Canadian investments in Egypt will jump to $10 billion within three years.
Ezzeddin also revealed that the chamber is negotiating with Egypt’s Ministry of Petroleum and Mineral Resources to establish the first gold purification plant in Egypt. Bringing in investments worth $70 million, the plant will ensure gold extracted in Egypt and neighboring countries complies with global standards.
What’s the volume of Canadian investments in Egypt?
Canadian investors have injected investments of about $2 billion in the Egyptian market, but this figure is expected to skyrocket to $10 billion over the coming two to three years with fresh investments in Egypt’s mining, solar energy and transportation projects; we have signed an agreement with the Ministry of Transportation regarding the sixth line of the subway. Other investments will be injected in infrastructure development, water desalination and automotive assembly projects in the Suez Canal region.
Canadian investments in Egypt are more focused on energy and railways, with Sky Power building a solar power plant with investments worth $4 billion, while Bombardier is set to implement the sixth line of the subway. At the same time, the company is negotiating to connect east and west Cairo by train and supplying tractors, in addition to providing training courses to raise the efficiency of railway workers.
From my point of view, clinching the approval of the Canadian Export Development Bank to provide a $1 billion loan to Egypt to establish the sixth line of the subway is highly important as it is the first time the bank has agreed to give Egypt a loan. Requests over the past several years were rejected in light of political unrest in the country which led to the downgrading of its credit ratings. This is a turning point in the bank’s stance toward Egypt.
Will the New Administrative Capital see any Canadian investments?
The Canadian University is building five colleges in the New Administrative Capital over 50 acres of land, with investments worth more than LE 1 billion. It’s due to be completed by the end of next year The Egyptian authorities have adopted an ambitious re- form program to restore macroeconomic stability and set the ground for sustainable and inclusive growth.
How do Canadian investors see the measures taken so far and how have their businesses have been affected since November? The economic reforms, especially the pound free-flo- tation, will place Egypt in a better position on the global investment map and will help lure foreign direct invest- ments in the medium term. Adopting a flexible exchange rate regime was bold and inevitable as investors were suffering from the two-price crisis which resulted from the thriving dollar black market.
Now this parallel market is over and the foreign currency shortage has been handled. Also, the government has approved the New Investment Law, and the Industrial Licensing Act but their executive regulations as well as the one-stop-shop system have not yet seen the light. Law enforcement is more important than its issuance and it will take time to feel the impact of these measures. Egypt will reap the fruits of all these reforms on the medium term.
What is the role you are playing as a cham- ber to bolster FDI in Egypt?
We are aware of the investment circumstances in Egypt and we always hold meetings in Canada to attract investors to the local market by showcasing promising opportunities in various sectors. We do not wait for the investor to come to Cairo, and will be sending a knocking door business mission to Canada in October to bring in new entries to the market.
How big is the trade volume between both countries?
Egyptian exports to Canada amounted to $80 million in 2016 and about $34 million during the first half of 2017, while imports from Canada to Egypt recorded $90 million in the same period. Yet, the figures do meet both sides’ expectations, especially after the pound flotation which increased the competitiveness of locally made products in the external markets.
What is the future of Egypt’s gold market and how will Canadian companies be in- volved?
Egypt will turn into a regional hub for gold purification as the country’s production is forecast to witness a leap in gold production rates over the coming period after four mining companies won exploration and production bids of- fered by the Egyptian Mineral Resources Agency (EMRA) to explore gold and other metals in five areas in the Eastern Desert and Sinai. The Canadian chamber is negotiating with Egypt’s Min- istry of Petroleum and Mineral Resources to establish the first gold purification plant in Egypt with investments worth $70 million.
This project was postponed for several years due to the weak production, which was not suf- ficient enough to operate the plant. However, with the four companies starting operations, it is expected we see large quantities of gold being brought in during the coming period.
The purification process will raise the added value of the so-called “random gold” that is being excavated and discov- ered in neighboring countries — either legally or illegally — and sold at half price, but when purified by the plant it will be 99% pure instead of 69%.
This will, of course, double its price because it will meet with global standards. Canadian mining companies shape around 60% of the global market. Using the latest modern technology in exploration of metals, they are eyeing the local market as they see great potential, but the late absence of the long awaited Mining Law led to the delay of any Canadian investment in this promising sector.
However, the sector will lure large investment in the coming period once the law is issued and new tenders are offered for metal exploration and purification.