HomeGoldEgypt to produce gold next year

Egypt to produce gold next year

Gold – to be mined
in Egypt for the
first time in 50
Dubai, U.A.E. — MININGREVIEW.COM — 16 July 2008 – The North African country of Egypt – which stopped gold production 50 years ago – is to produce 8 tonnes of the precious metal from mines in the eastern desert in 2009.

“We have been producing gold since last December, and one of the mines that started production has a reserve of 13 million oz,” Egyptian Geological Survey and Mining Authority chairman Hussein Hammouda said. “Once this mine is fully operational, it won’t only be one of the biggest in Africa, but one of the biggest worldwide,” he told Reuters in a telephone interview from Cairo.

Egypt’s gold production stopped in the late 1950s as the volume mined was considered too small to be profitable. The country produced 7.4 tonnes from 1902 to 1958. “We are planning to produce 8 tonnes of gold in 2009, which is more than the country has produced in a century,” Hammouda said.

“This is only the beginning … we are planning to become a major producer in the region as we explore other mines we have, he added.

Egypt hopes this year’s output will reach at least 15 000 ounces of gold, Hammouda said.

The revival plans for gold production were boosted last year when the north African country signed a memorandum of understanding with the International Finance Corporation (IFC) – the private sector lender of the World Bank – to replace antiquated mining laws.

Egypt’s old regulations, based on profit-sharing, made it virtually impossible for foreign mining players to exploit the reserves, while local companies lacked the capital or expertise to develop a commercial, home-grown industry.

Last year, Egypt offered eight gold mining concessions for various parts of the country. They were awarded to five companies from Canada, Australia, Europe and the United Arab Emirates, Hammouda said.

"We are planning to offer a second round of concessions before the end of this year,” he continued. “They will include about eight gold mining concessions, and we are also looking at concessions for silver and other metals."

First-quarter gold demand in Egypt was up 14.5% at 18 tonnes this year, while sales value surged 63.5% to $641 million, the industry-funded World Gold Council said in May. The once leading world gold buyer is likely to continue seeing double-digit growth in demand for the yellow metal over the next five years as the economy expands and tourism grows.