Egypt signs 10 new gold exploration contracts

The Egyptian Minister of Petroleum Tarek El Molla said that the awarding of the contract to AKH was a positive sign as the company has extensive experience in mining activities around the world. (AFP/File Photo)
The Egyptian Minister of Petroleum Tarek El Molla said that the awarding of the contract to AKH was a positive sign as the company has extensive experience in mining activities around the world. (AFP/File Photo)
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Updated 18 February 2021

Egypt signs 10 new gold exploration contracts

The Egyptian Minister of Petroleum Tarek El Molla said that the awarding of the contract to AKH was a positive sign as the company has extensive experience in mining activities around the world. (AFP/File Photo)
  • The agreement focuses on potential gold extraction in nine sectors in the Eastern Desert, according to a statement from the Ministry of Petroleum and Mineral Resources

CAIRO: Egypt has signed ten gold exploration contracts with four companies, worth a combined value of $11.2 million.

The signing included four contracts with AKH Gold, a company affiliated with Egyptian businessman Naguib Sawiris, with a total investment of about $4.1 million. The agreement focuses on potential gold extraction in nine sectors in the Eastern Desert, according to a statement from the Ministry of Petroleum and Mineral Resources.

After the signing, Sawiris said that the new mining law and its executive regulations gave incentives for international and Egyptian mining companies.

Sawiris emphasized that Egypt possesses large mineral resources that will be important to support the national economy, and praised the efforts of the Ministry of Petroleum and Mineral Resources in developing the mining sector.

The Egyptian Minister of Petroleum Tarek El Molla said that the awarding of the contract to AKH was a positive sign as the company has extensive experience in mining activities around the world.

The minister said the success of the first auction in November was a strong indication of the continued development of the country’s mining sector.

The minister also signed three contracts with the Canadian company Red Sea Resources, to mine for gold in five areas, with a total investment of about $5.5 million.

The Mineral Resources Authority has also signed two contracts worth $1 million with the North Africa Mining and Petroleum Co., and a fourth contract worth $636,000 with the Obaid Al Abdi Contracting Co.

The authority had previously signed five contracts for gold research and exploration as part of the winning bids, with total investments estimated at $13 million. The contracts were with the Canadian Lotus Gold Co., the Egyptian company Mining and Manufacturing Co. (MEDAF), and the Egyptian Ebdaa for Gold Mining Co.


Europe less at risk of inflation and rate fears: analysts

Europe less at risk of inflation and rate fears: analysts
Updated 3 min 2 sec ago

Europe less at risk of inflation and rate fears: analysts

Europe less at risk of inflation and rate fears: analysts
PARIS: Investors are watching inflation carefully, worried that a boiling over of prices will ruin the expected strong pandemic recovery although analysts believe Europe faces much less of a risk than the United States.
Fears that US President Biden’s $1.9 trillion stimulus plan — which was passed by the House of Representatives on Saturday — will stoke up the economy too much have unnerved investors in recent weeks.
A rise in yields on 10-year US Treasury bonds — a key indicator of expectations — shows the markets believe prices are set to rise much more sharply than last year’s gain of 1.4 percent, which could force the US Federal Reserve to hike interest rates earlier than it says it plans to do.
Bond yields have risen elsewhere too, with 10-year French government bonds turning positive on Thursday for the first time in months while the benchmark 10-year German Bund has also risen although it remains negative.
European inflation data for January showed a jump in prices of 0.9 percent compared to a minus 0.3 percent reading in December, as increased costs of raw materials fed through into services and industrial goods.
After having slowed considerably in 2020, inflation is expected to rise this year in Europe as the economy picks up following the relaxation of measures to slow the spread of the Covid-19 pandemic.
But it is not so much a spike in inflation that worries investors but that the Fed would raise interest rates faster than it has communicated.
Federal Reserve Chairman Jerome Powell pledged Tuesday that the US central bank will keep benchmark lending rates low until the economy is at full employment and inflation has risen consistently above its 2.0 percent target.
But bond yields continued to rise, indicating investor concern about a rise in interest rates that would make borrowing and investment more expensive and slow the economy.
However, many analysts are skeptical that Biden’s stimulus program will spark considerable inflation.
“It isn’t clear that Biden’s recovery plan will create lots of inflation,” said Xavier Ragot, head of the French Economic Observatory think tank.
For the European Union, there is no likelihood that its pandemic recovery program would, he believes.
“The amounts of the European recovery plans pose absolutely no inflationary risk,” he said.


The European Commission’s recovery program is worth 750 billion euros ($920 billion), with several EU members also having their own national programs.
“We have a European recovery program... considerably less strong, and a loss of growth that is much greater, so there aren’t the same risks of overheating as in the United States,” said Fabien Tripier, an economist at CEPII, a Paris-based research center on the world economy.
The US economy shrank 3.5 percent last year while the drop for the eurozone was nearly double that.
There is “no risk of overheating or a sustained rise in inflation” in the eurozone, the head of the Banque de France, Francois Villeroy de Galhau, insisted this past week.
The French Economic Observatory’s Ragot also does not believe that if the Fed is pushed by the markets into raising rates that the European Central Bank would be forced to follow suit.
“It doesn’t work like that in macroeconomics,” he said, noting that the monetary policy of the Fed and ECB had diverged considerably at the start of the last decade.
“With loose financial conditions still necessary to support the economy, the ECB is unlikely to react to the coming inflation overshoot,” said Capital Economics economist Jack Allen-Reynolds.
Francois Villeroy de Galhau, who as head of the Banque de France also sits on the ECB’s Governing Council, said the central bank wants to “maintain favorable financing conditions.”
For Fabien Tripier, the ECB needs to send “a strong signal” to the markets against the idea that “just because inflation hits 1.5 percent or 2.2 percent, speculation it will hike rates should begin.”
The ECB issued a reassuring message on Friday as executive board member Isabel Schnabel said it could broaden its support for the economy in case of a sharp rise in interest rates.

Biden urges quick Senate action on huge stimulus package

Biden urges quick Senate action on huge stimulus package
Updated 8 min 12 sec ago

Biden urges quick Senate action on huge stimulus package

Biden urges quick Senate action on huge stimulus package
  • The package passed the House just after 2:00 am (0700 GMT) Saturday, in a 219 to 212 vote

WASHINGTON: President Joe Biden on Saturday welcomed the overnight passage by the US House of Representatives of an enormous, $1.9 trillion coronavirus relief package, saying it moves the country closer to full Covid-19 vaccination and economic recovery.
The package passed the House just after 2:00 am (0700 GMT) Saturday, in a 219 to 212 vote, with not one Republican vote, and moves next week to the Senate.
"I hope it will receive quick action," Biden said in a brief address from the White House.
"We have no time to waste. If we act now, decisively, quickly and boldly, we can finally get ahead of this virus."
The vote in the House meant that "we're one step closer to vaccinating the nation, we are one step closer to putting $1,400 in the pockets of Americans, we're one step closer to extending unemployment benefits for millions of Americans who are shortly going to lose them."
He said the bill -- which would be the second-largest US stimulus ever, after a $2 trillion package approved in March -- would also help schools reopen safely and allow local and state governments to avoid "massive layoffs for essential workers."
The House vote came just days after the Covid-19 death toll surpassed 500,000 in the United States, the world's worst total.
Democrats have called the aid package a critical step in supporting millions of families and businesses devastated by the pandemic. It extends unemployment benefits, set to expire mid-March, by about six months.
But Republicans say it is too expensive, fails to target aid payments to those most in need, and could spur damaging inflation.
The administration appears poised to use a special approach requiring only 51 votes in the 100-seat Senate -- meaning the vote of every Democrat, plus a tie-breaking vote by Vice President Kamala Harris, would be required.
But progressives suffered a major setback when a key Senate official ruled Thursday that the final version of the bill in that chamber could not include a minimum wage hike.
Biden campaigned extensively on raising the federal minimum wage to $15 an hour, from the $7.25 rate that has stood since 2009. Progressives have been pushing the raise as a Democratic priority.
In his remarks Saturday, the president made no mention of the issue, a source of discord within the party.
Most Republicans, and a few Democrats, opposed the higher wage, so having it stripped from the Senate version of the legislation could actually ease its passage.


Weekly energy recap: February 26, 2021

Weekly energy recap: February 26, 2021
Updated 28 February 2021

Weekly energy recap: February 26, 2021

Weekly energy recap: February 26, 2021
  • The market is still assessing the resumption of US crude oil output after the fallout from the big freeze across Texas

RIYADH: Oil prices made another big weekly gain, as WTI rose above $60 per barrel and the Brent crude price settled above $65 per barrel, amid a sharp drop in US output due to the weather crisis in Texas. The week closed with Brent crude at $66.13 per barrel and WTI at $61.50.

The market is still assessing the resumption of US crude oil output after the fallout from the big freeze across Texas. The impact on US crude production is still unclear. Some American producers reported production losses of about four million barrels per day (bpd) during the cold blast, but the Energy Information Administration (EIA) reported a drop of only one million bpd.

US commercial crude stocks climbed by 1.28 million barrels to 463.04 million last week as the Texas freeze pushed refinery demand to 12-year lows. Global Platts S&P has reported the total U.S. refinery net crude input plunged 2.59 million bpd to 12.23 million bpd, the lowest since the week ended September 2008, as refinery utilization fell 14.5 percent to 68.6 percent of capacity.

Even before the striking impact of the Texas snowstorm on the US energy industry, output had fallen greatly. The EIA reported that US oil production has decreased to 9.7 million bpd, down 1.1 million from the week before and 3.4 million lower than the US peak of 13.1 million bpd a year ago. Coming in addition to the 8.2 million bpd output cuts from OPEC+ (including Saudi Arabia’s additional 1 million bpd voluntary cut), this has reduced global supplies by about 11.6 million bpd, which has so far kept the market intact and helped oil prices to head for their fourth monthly gain.

There has been bullish talk that prices might reach $100. This is completely false, despite the upcoming spring refineries maintenance season in Asia, where China is getting ready with lower crude oil imports. Continuing fears over the coronavirus may even push Asian refineries to make deeper run cuts until oil prices advance into the $70s in coming months.

Ironically, ahead of the OPEC+ meeting in early March, market participants and major shale oil producers are giving OPEC+ bullish signs to consider a modest production boost. These signals show the declining influence of US shale on OPEC and suggest that the organisation no longer needs to worry about the threat posed by the sector.


UK to allocate $17bn for new infrastructure bank

UK to allocate $17bn for new infrastructure bank
Updated 27 February 2021

UK to allocate $17bn for new infrastructure bank

UK to allocate $17bn for new infrastructure bank
  • Sunak to use budget to expand apprenticeships and extra funds for traineeships

LONDON: Britain is to launch a new infrastructure bank with £12 billion ($17 billion) in capital and £10 billion in government guarantees, the treasury said on Saturday, aimed at supporting the economy.

British Finance Minister Rishi Sunak, is expected to announce the initial funding at Wednesday’s budget and the bank will launch in spring, the ministry said.

“Britain’s businesses and the Great British public deserve world-class infrastructure and that is exactly what this new bank will help us deliver for them,” Sunak was quoted as saying.

The bank is set to finance private sector projects in the green economy, focusing on areas such as carbon capture and renewable energy.

It will also provide loans to local authorities at low interest rates to support “complex infrastructure projects.”

The Finance Ministry said the bank would unlock billions more in private finance to support a £40 billion infrastructure investment to “fire up the economy” and help reach commitments on net zero emissions and reducing regional deprivation.

The announcement comes as Britain’s economy has been hit hard by pandemic lockdowns.

Analysts expect unemployment to surge when the UK government’s furlough scheme paying the bulk of wages for millions in the private sector ends — as currently planned — at the end of April.

Sunak last week hinted he would announce further employment support in the coming months.

He first announced the planned bank in November last year, saying its headquarters would be in northern England rather than in the financial hub of London.

Apprenticeships

The minister will also announce more funding for apprenticeships in England.

Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive £3,000 for each apprentice hired, regardless of age — an increase on current grants of between £1,500 and £2,000 depending on age.

The scheme will be extended by six months until the end of September, the Finance Ministry said.

Sunak will also announce an extra £126 million for traineeships for up to 43,000 placements.

‘Enormous strains’

Sunak will use the budget next week to level with the public over the “enormous strains” in the country’s finances, warning that a bill will have to be paid after further coronavirus support, according to an interview with the Financial Times.

Sunak told the newspaper there was an immediate need to spend more to protect jobs as the UK emerged from COVID-19, but warned that Britain’s finances were now “exposed.”

UK exposure to a rise of 1 percentage point across all interest rates was £25 billion a year to the government’s cost of servicing its debt, Sunak told FT.

Additionally, the government will also announce a new £100 million task force to crackdown on COVID-19 fraudsters exploiting government support schemes, it said.


S. Africa proposes new rules to boost economy

S. Africa proposes new rules to boost economy
Updated 27 February 2021

S. Africa proposes new rules to boost economy

S. Africa proposes new rules to boost economy
  • Africa’s most industrialized nation — the hardest-hit by the coronavirus disease (COVID-19) pandemic on the continent — has put public works in sectors

JOHANNESBURG: South Africa’s National Treasury is proposing changing rules governing pension funds to encourage investment in infrastructure projects.

Africa’s most industrialized nation — the hardest-hit by the coronavirus disease (COVID-19) pandemic on the continent — has put public works in sectors such as transport, energy and water at the heart of its economic recovery plans.

The treasury is proposing changes to Regulation 28 of the Pension Funds Act in draft amendments published for public comment on Friday. This rule sets the maximum percentage of a fund’s assets that can be invested in different asset classes and is aimed to shield savers from over-concentrated investments.

The proposed amendments do not introduce infrastructure as a new asset class alongside existing ones like equities, debt instruments and property but allow for infrastructure investments to be recognized within those asset classes.

They also say overall investment in infrastructure across all asset categories may not exceed 45 percent of domestic exposure and an additional 10 percent for the rest of Africa.

The changes should make it easier for retirement funds to invest in infrastructure and allow for better measurement of investment in projects, the Treasury said in a statement.

The changes are “informed by a number of calls for increased investment in infrastructure given the current low economic growth climate,” it said, stressing that the decision to invest in any asset class remained up to the board of trustees of each fund.

The public can comment on the amendments until late March.