Special to WorldTribune.com
Gold – what the Pharaohs referred to as the “skin of the gods” – is plentiful and there for the taking in Egypt’s eastern desert, modern prospectors believe.
And there is enough gold and minerals that could be obtained using modern technology to turn around the country’s sagging economy. The only thing holding back an Egyptian gold rush, they say, is bureaucratic red tape and an outdated profit-sharing setup.
“Egypt is a geological Disneyland,” said Mark Campbell, president of the Canadian exploration company Alexander Nubia, which is increasing its drilling this year in a 1,070-square mile area in the eastern desert.
“Mining has been going on here for over 5,000 years, but in the 21st century it’s essentially virgin ground,” Campbell said. “Exploring for gold and minerals in Egypt today with modern technology is like having a map where X marks the spot.”
Veins close to the surface were heavily excavated by successive Pharaonic, Roman and even British colonial operations, but the sites still hold large gold concentrations deeper down that can be extracted with modern techniques and machinery.
Campbell’s group has identified six potential mines in the desert, filled with barren valleys and pink rock outcroppings known as the Arabian-Nubian Shield, which stretches south to Eritrea and east to Saudi Arabia.
Geologists say the remnants of volcanic belts and sea floor sediments in the area are rich in metals, including deposits of gold, copper, uranium and other minerals.
Campbell says the eastern desert is promising enough for his team of two dozen explorers and specialists to plan to open Egypt’s first new mine by 2019.
Egypt’s once booming mining sector is largely dormant today amid outdated policies that fall short of international standards. Attempts by the government to attract foreign investment have largely failed, analysts say.
“No one wants to deal with the profit-sharing structure,” said Yousef Husseini, an analyst at Egyptian bank EFG Hermes who follows the mining sector.
“The ideal setup would be royalty and taxes as opposed to royalty and profit share, as is currently the case,” he said, referring to the current system where mining companies in Egypt must pay at least half of their profits to the state in addition to royalties paid annually based on sales figures. In most other countries, taxes levied on companies in the mining sector range from 25 to 50 percent.
Mark Tyler, an investment banker with Nedbank in London, agrees that the current setup for mining in Egypt is out of step with global practices.
“There’s a long history of small-scale mining in Egypt. Generally that’s a good indication there are minerals in the area,” Tyler said. “But those rules are pretty harsh. Typically you have royalties and taxes and some type of state shareholding in the company, like is often the case in West Africa and the rest of the world.”
President Abdul Fatah Sisi’s government has floated the idea of a “Golden Triangle” of development in the eastern desert to spark the fast economic growth needed to provide jobs. The plan, though, has fallen short, with investors complaining of endless red tape when doing business in Egypt.
“If there were more favorable legislation, there’d be dozens of companies all around the area,” said geologist Leonard Karr, an American with Campbell’s company.