10 companies place bids in Egypt's gold exploration auction conducted on March 15-July 15

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Tue, 19 May 2020 - 03:20 GMT

Auction Gavel - Wikipedia

Auction Gavel - Wikipedia

CAIRO – 19 May 2020: Sources at the Ministry of Petroleum, Mining, and Mineral Resources told Egypt Today that 10 companies purchased the applications of the international gold exploration auction announced by Egypt earlier this year.

Minister Tarek El-Molla announced on February 25 that Egypt would invite an international exploration auction for gold and other minerals such as copper and silver. Application is open from 15 March to 15 July.

Molla added that investors will be given the opportunity to bid on 320 blocks over an area of about 56,000 square kilometres in the Eastern Desert and the Red Sea, clarifying that each block will cover an area of 170 square kilometres, and the block will be administered under a tax and royalty scheme.

Earlier, the government made amendments to the mining law in a bid to attract investors to the mining sectors.

Mineral Resources Act amendments include setting up a new authority in charge of licensing mines and quarries, taking the power to issue and control licenses away from governorates. They would also lift a previous 16,000 sqm area limit, allowing the authority to issue licenses to areas of unlimited size. Licenses could also be renewed for more than one term.

Moreover, there will be separate contracts and agreements for exploration and extraction, and companies will have to pay a minimum royalty of 5 percent of annual production, with a 20 percent cap being set.

“Mining firms will have to pay 6 percent of a mine’s annual production to the home governorate. Governorates can recommend amending this 'rent' but a final say can only come from the prime minister. Under current legislation, governorates had the power to dictate the payout every four years,” according to the amendments.

The auction is Egypt's first of its kind in about 3 years, and a move to explore the country's undeveloped and undiscovered mineral wealth.

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