Illegal gold mining in Egypt threatens “investment opportunities and the ability to benefit from the country’s reserves,” as “clashes among illegal prospectors” continue to recur.
Businessman Naguib Sawiris said Egypt’s mineral wealth was being continuously wasted because of random and illegal mining by outlaws, adding that most mining companies suffer from illegal practices that can include threats with weapons.
Commenting on a report on global gold and silver reserves on his X account, Sawiris said such practices, carried out by people, some of whom are not Egyptian, deprive Egypt of becoming one of the countries with the largest gold reserves.
Sawiris is among the businessmen who have long been enthusiastic about investing in gold. In late April, he spoke of injecting about $400 million into the gold mining company in which he is a shareholder, and has bet on gold prices even during periods of price turbulence.
Rahab al-Ghoul, a member of parliament’s Energy and Environment Committee, told Asharq Al-Awsat that illegal mining for gold and minerals threatens investment opportunities, adding that there have been significant efforts recently to confront it. She said that in some desert and mountainous areas, there is cooperation between state agencies and citizens to confront those prospecting for gold.
She added that the state can exercise its sovereignty over any area where foreign companies want to explore, and that the Petroleum Ministry is already holding exploration tenders and cooperating with companies with experience in the field. She stressed the government’s keenness to encourage investment and resolve any obstacles facing investors.
Early last month, the Interior Ministry announced the arrest of a man accused of killing eight others after a fight among a number of people illegally prospecting for gold in the Red Sea governorate in southeastern Egypt.
The incident came one day after one person was killed in similar clashes in the mountainous al-Baramiya area in Aswan governorate in southern Egypt.
There are no official statistics on illegal mining operations, which usually involve selling minerals at prices below their real value.
Economist Karim al-Omda spoke of the difficulties facing investors in gold and silver exploration, including illegal mining operations, or the lack of agreement on attractive shares and incentives for foreign companies, which at times demand high percentages of exploration revenues.
Al-Omda told Asharq Al-Awsat that there is a clear absence of a government investment vision for this sector, unlike the clear vision, for example, in the gas and oil sector. He said random mining wastes existing wealth by depleting it.
Egyptian Minister of Petroleum and Mineral Resources Karim Badawi said during a meeting with leaders of three global mining companies last Wednesday that reforms had been implemented to develop the role of the Mineral Resources Authority so that it becomes an independent economic entity capable of supporting investors with data and technical services, in addition to activating the one-stop-shop mechanism to facilitate dealings with government bodies.
He said at the time that the modern airborne survey project represented an important step toward providing more accurate geological data on promising areas, helping investors make better investment decisions and increasing the likelihood of new discoveries, especially since Egypt has significant mining potential that has not yet been fully exploited.
The government is seeking to launch a major international gold exploration tender covering more than 210 areas in the Eastern Desert, aiming to attract $1 billion in investments by 2030 to increase production.
This comes as part of a plan to raise the mining sector’s contribution to gross domestic product from less than 1% to about 6% by 2030, according to local media reports.
Late last year, the government approved several incentives in the mining sector, including lowering licensing fees and granting tax and customs exemptions on exploration equipment, supplies, and related services, according to repeated statements by the Petroleum Ministry.
Al-Ghoul said these decisions reflect the state's current investment priority in mineral exploration, including gold, adding that some obstacles are being overcome gradually to achieve the maximum benefit.
