EASTERN DESERT, EGYPT – Careering around Egypt’s rocky Eastern Desert, Alexander Nubia (AAN.V) CEO Mark Campbell peers from his jeep and sees hills so rich with gold they could lure billions in investments and jumpstart the ailing economy. His company just has to find it.
Egypt’s gold mining industry has for years been long on potential and short on investment — the result of a jarring mismatch between spectacular geology and an unattractive commercial framework for mining.
Despite a history of gold mining that stretches back to the pharaohs, the industry is largely dormant. With just a single gold-producing mine, Centamin’s (CEY.L) Sukari, the sector contributes a fraction of one percent to gross domestic product (GDP).
But last year, Egypt’s government said it wanted mining to contribute upwards of 5 percent to GDP within 10 years. This month it will launch its first bid round for new mining concessions since 2009, when a global gold-mining boom brought a handful of first-time investors to Egypt, despite what many of them say were poor commercial terms.
Most of these investors left after the 2011 uprising, driven away by rising political turmoil and falling global gold prices. Now, armed with a 2014 mining law that helps streamline investment, Egypt wants to lure them back.
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