Egypt has one of the longest relationships with gold in the history of mankind. Dating back to Ancient Egypt, the region witnessed large-scale gold mining projects stretching back thousands of years and continuing throughout antiquity. The Ancient Egyptians believed that their deities had skin made of gold (and bones made of silver, for good measure).
Despite its rich historical connection to gold, actual mining projects for the metal in Egypt are surprisingly scarce. That may soon change in an effort to boost the country’s economy.
Five Millennia Legacy
One would assume that because gold has been mined in Egypt (especially in the southern part of the country close to Ancient Nubia—”land of gold”) for such a long time, there wouldn’t be a great deal of the yellow metal left in the country. Even though the ancients, their later Ptolemaic (Roman) rulers, and the British colonialists of the 19th century all engaged in small-scale mining projects, each group typically traced along the exact same areas. Further they only “scratched the surface”; modern mining technology now opens up a world of new potential.
According to Mark Campbell, the president of Alexander Nubia, a Canada-based mineral exploration firm, “Mining has been going on [in Egypt] for over 5,000 years, but in the 21st century it’s essentially virgin ground.” His company is expanding its drilling in the Egyptian desert and expects to open a mine there in 2019.
Behind the Times
Despite the growth of new technology that allows minerals deeper beneath the ground to be identified and extracted, Egypt’s rules regarding mining operations continues to hamper new projects for the time being. The country has very harsh, outdated laws that require mining companies not only to pay royalties to the government but also to pay the state half of its profits in a profit-sharing arrangement. This regime is among the most unattractive anywhere in the world and is not in line with how much countries handle foreign miners.
ABC News points out there is one outlier from these laws:
“The exception is the Sukari mine, Egypt’s only modern mining operation, which has consistently increased its profits in recent years. Built over another ancient gold mining site further to the south, the company that runs it, Centamin, has seen its share price grow by over 60 percent since the beginning of the year, buoyed by rising gold prices and a 15.7 percent increase in production in the first quarter compared to last year.”
The Egyptian economy is starved for foreign investment, so most observers are optimistic that the laws will change soon. The success of Centamin provides an encouraging example. Until the government moves toward rules that are more similar to international standards for such policies, however, a huge deterrent to new mining will remain in place. There is also the lesser concern of disturbing important ancient sites with artifacts or archaeological materials. In general, hopeful miners like Alexander Nubia are targeting the desert.
Geologists also believe that Egypt may be rich in copper and uranium deposits. “Exploring for gold and minerals in Egypt today with modern technology is like having a map where X marks the spot,” Campbell says. He likens the country to a “geological Disneyworld,” that has simply yet to open for business.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.