Mining to Egypt
Trends and opportunities
Egypt is home to a wealth of mineral resources including gold, copper,
silver, zinc, platinum and a number of other precious and base metals.
These resources all lie beneath Egypt’s Eastern desert and the Sinai
Peninsula, both part of a geological setting known as the Arabian-Nubian
shield. With an estimated 6.7 million ounces of gold, 48 million tons of
tantalite (fourth largest reserves in the world), and 50 million tons of
coal, Egypt has the potential to be one of the top mining jurisdictions in
While Egypt’s mineral wealth is world class, the country still lacks an
internationally competitive mining policy that provides the right balance
of economic returns to both the government and the investor. In a bid to
address this and attract foreign investment, the government issued Law No.
198 of 2014 in December 2014, commonly referred to as the ‘Mining Law’ to
replace the former law concerning Mines and Quarries issued in 1956 (‘the
Despite all the transformations introduced through the new mining law, it
did not include needed reforms to the mining sector and its governing
policy. For example, under the new law, the structure of bid rounds and
production sharing via an operating company is cumbersome. The process is
not seen as economically viable to potential investors despite the
prospective mineral resource areas on offer.
Moving the tax, royalty and rent system away from the production-sharing
system would attract greater investment in Egypt’s mineral resources.
Although production-sharing arrangements work for oil and gas agreements,
it is not preferred by mining companies. It is for this reason that, with
the exception of Centamin Sukari
Mine, Egypt’s mineral wealth remains undeveloped. Egypt’s mining industry
has been almost entirely undeveloped, with only three main foreign players: Centamin, Aton Resources and Thani Stratex.
In January 2017, the
Egyptian Mineral Resources Authority (EMRA) announced an international tender for exploring and extracting gold in
in the Eastern Desert and Sinai, including Umm el-Russ, Bokari, Umm Samra,
Umm Ud and Hangaliya – under a production-sharing scheme. The UK’s Veritas
Mining Limited, Ghassan Spain Investment, and Egypt’s East Gas Company each
won a concession. Australian company Resolute was awarded two tenders.
Egypt is developing a major gold mining city in the Suez Canal with the
hopes of boosting the mining industry and attracting billions of dollars in
foreign investment. The first of its kind in the world, the ‘Gold City’
will be built on 130,000 square meters in the Suez Canal Economic Zone. The
Zone was established in early 2017 to attract foreign mining investors.
Significant effort is underway by a number of parties to address the mining
policy challenges. The Australian Government and the West Australian
Government have been delivering workshops on leading practice principles
for a sustainable resources sector.
Operational and environmental challenges in Egypt create opportunities for
innovative solutions from Australian companies that operate in similar
environments in Australia and globally. The Egyptian mining sector needs
mineral processing technology, equipment and proven expertise to develop
mineral-based manufacturing. There are also opportunities for equipment
manufacturers and suppliers, and companies that provide engineering
consulting, drilling and chemical testing services. The industry also
requires training and upskilling to fill supply chain gaps across the
There is a particular requirement for companies in gold exploration,
drilling technology, mineral processing technology and equipment,
engineering, processing and construction turnkey, and consultancies to
assist in establishing the significant infrastructure needed for the mining
industry in Egypt. Building the new Gold City will generate major
infrastructure projects to support mining activities, which should provide
opportunities for Australian companies in the power, transport,
communications and construction sectors.
The Egyptian Government’s effort to support investors, low-cost energy for
output processing and highly skilled cheap labour all position Egypt as a
new mining destination for businesses.
According to Euromonitor International, Egypt has a dynamic and young
population, a large domestic market and a favorable location. The recent
discovery of a major gas field is another encouraging development. Growth
of real GDP will reach about 3.5% per year in the medium term. Egypt’s
Planning Ministry has launched a series of labour-intensive infrastructure
projects to reduce the jobless rate and accelerate productivity growth.
These include constructing low-income housing, completing a new local
airport, expanding the public bus system and increasing the number of
households connected to the country’s national gas grid. The recent opening
of the parallel Suez Canal could also offer benefits. However, any
significant economic benefits will depend on the development of a large
trade and industrial zone around the canal.
The government has also implemented a number of new measures. For example,
it has introduced a value-added tax, capped public sector salary increases
and allowed the Egyptian pound to float. In 2017, electricity prices were
hiked by up to 42% and fuel prices were increased by up to 50%. Other
reforms have been introduced as part of an IMF program, including tax rises
and new investment and industrial licensing laws.
The Egyptian government has introduced a new investment law to improve the ease of doing business.
Egypt’s first bankruptcy law has also been approved. Egyptian economists
calculate that the informal sector - a part of the economy that is neither taxed nor monitored by any form of government and of which the activities of the informal economy are not included in a country's gross national product (GNP) or gross domestic product (GDP) - includes up to 18 million establishments – 40,000 of them which are factories.
Altogether, the size of the informal sector could be equal to 65-70% of the
Tariffs, regulations and customs
Please refer to the Egyptian Ministry Trade Agreements Sector (TAS)
within the Ministry of Trade and Industry websites for a detailed
breakdown of tariffs, import restrictions, and trade remedies.
Marketing your products and services
Australian products and services including consultancy, contracting,
technology transfers and materials are used in the region. Providers of
specialised services need to bid for projects, therefore a local presence
is recommended. The bulk of materials in the region is imported through
Dubai in the UAE. Major importers have significant warehousing facilities
and well-developed distribution networks and branches in UAE, which is
being used as a regional hub. Egypt has a strong manufacturing base and
well-developed relationships with suppliers in Europe, India and China.
Australian companies compete best when they have a value-added product with
a distinct competitive advantage. In Egypt, there is a strong focus on
forming relationships to carry out business. For this reason, companies
need the commitment and resources to make a number of visits to maintain
relationships with their partners or establish an office.
Links and industry contacts
Government Departments and Business
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
- promote international education
- strengthen Australia's tourism industry
- seek consular and passport services.
Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: firstname.lastname@example.org
A list of Austrade offices (in alphabetical order of country) is also available.