Egypt has agreed in principle to a new regulatory framework for mineral exploitation, under which 30-year exploitation licences will be awarded to miners, given that the state secures 15% of net profits.
The Egyptian Ministry of Petroleum & Natural Resources and the Egyptian Mineral Resources Authority announced the model mining exploitation agreement (MMEA) with gold mining companies Centamin and Barrick Gold.
The MMEA establishes the legal and fiscal framework that will apply to commercial discoveries made on the “highly prospective” area of nearly 3,000km² awarded to the company in 2021 for exploration in the Eastern Desert of Egypt (EDX blocks).
The agreement will be effective when passed by the Egyptian parliament later this year.
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Through employment, education and training, and direct financial and infrastructure investment, the ministry has a target for the mining industry to contribute 5% of the country’s GDP by 2030.
This agreement applies to Centamin’s three EDX blocks, Nugrus, Um Rus and Najd.
Under the agreement, the government will also receive a 5% net smelter royalty on revenue, a 22.5% corporate tax and a 0.5% community development contribution.
Miners also need to ensure local employment, training and procurement during the life of mine.
Centamin CEO Martin Horgan said: “Centamin has successfully operated in Egypt for over 20 years and we believe these terms lay the foundation for developing Egypt’s mining sector, unlocking the undoubted geological potential within the country.
“The MMEA provides a clear regulatory and fiscal framework that fairly balances risk and reward between the stakeholders while providing a stable operating environment required by the international mining community and its investors.”