Miners seek gold under the desert sands after Egypt changes rules

Miners seek gold under the desert sands after Egypt changes rules
An old abandoned mine is pictured in the eastern desert near the southern province of Luxor. (Reuters)
Short Url
Updated 23 April 2021

Miners seek gold under the desert sands after Egypt changes rules

Miners seek gold under the desert sands after Egypt changes rules
  • Five firms have signed gold exploration contracts
  • Government seeking $1 billion of investment annually

CAIRO: Mining companies awarded blocks in Egypt’s Eastern Desert are set to start exploring for gold under a legislative overhaul that seeks eventually to unlock vast untapped mineral resources.
Despite plentiful reserves and a rich mining history that gave rise to elaborate Pharaonic gold jewelry, Egypt has just one commercial gold mine in operation. Foreign investment in oil and gas has grown, but mining has languished.
Now, the country is banking on high gold prices and amended mining laws that scrap red tape and a profit-sharing rule, unpopular in the industry, to lure interest.
One year after launching its first bid round under the new rules, it has so far clinched five gold exploration contracts in a first bidding round and kept the tendering system rolling as it tries to build momentum.
The government is looking to attract $1 billion in annual investments in mining, a target industry sources say could be within reach.
“Success is ultimately going to be measured by how many mines are going to be discovered and advanced to production,” said Patrick Barnes, Head of Metals & Mining Consulting EMEARC at Wood Mackenzie, which advised Egypt’s government on its mining law reforms.
“Early indicators show us that this bid round was much better than the ones held previously.”
In its initial tender, Egypt in November awarded 82 exploration blocks to what metals analysts say is a healthy mix of 11 companies, ranging from junior explorers to industry giants such as Barrick Gold.
The blocks on offer are in the Arabian-Nubian shield geological formation, which flanks the Red Sea and is believed to be one of the most mineral rich areas in the world.
Egypt’s mining drive is still at an early stage.
UK-based Altus Strategies told Reuters it was looking to build up its technical team and conduct remote sensing and mapping operations on the 1,500 square kilometers of land it has been awarded before starting exploration.
It expects to invest several million dollars in the short term but that could rise above $100-$200 million if a economic discovery is made.
A spokeswoman for Canada-based B2Gold, which also won concessions, said the company was looking forward to starting exploration soon “given the relative under-investment in modern exploration, and therefore untapped potential in the historically prospective Arabian-Nubian Shield.”
Mining firms welcomed the elimination of a requirement to form joint ventures with the Egyptian government, and the capping of state royalties at 20 percent.
However, the retention of a tendering process for exploration blocks limits the chances of any gold boom, said Sami El Raghy, Chairman of Australia-based Nordana.
“No other successful mining countries use this process. They all have a clear transparent mining laws stipulating the qualification, obligations and the rights of investors. (They) work on the principle first come, first served,” said El Raghy, who was also a founder of Egypt’s first and only commercial gold mine, Sukari.
The Ministry of Petroleum and Mineral Resources declined to comment.
On average, a mining project goes from discovery to production in 10-15 years. While gold prices have eased after reaching a record in 2020, economists expect they will remain high by historical standards over coming years.
“If you get to a point where several discoveries are made, Egypt could be one of the largest gold producers in Africa ... It had top-tier potential,” said Steven Poulton, CEO of Altus Strategies.
Environmental campaigners, however, say there is no justification for gold mining. It generates emissions, can add to water-stress and in contrast to copper and battery minerals is not in demand from technologies that can bring about a low carbon economy.
The government has said it is open to other minerals, but gold is the focus for now.
“Gold is absolutely the best thing for them to start with, because there’s a known amount of it,” said Wood Mackenzie’s Barnes.
“Egypt has immense potential for mining copper and gold and other commodities. The biggest concern in the industry is lack of supply for copper, places like Egypt which are considered under explored and high potential are going to get a lot of attention if they can maintain investment conditions,” he added.


Emirates boss hopes UAE could move off UK red list in a week

Emirates boss hopes UAE could move off UK red list in a week
Updated 10 sec ago

Emirates boss hopes UAE could move off UK red list in a week

Emirates boss hopes UAE could move off UK red list in a week
  • The Dubai flag carrier may obtain further financial support from the Dubai government and could also issue bonds

DUBAI: The Emirates Airline chairman has hinted that the UAE could make it off the UK''s travel red list over the next week.
Sheikh Ahmed bin Saeed Al-Maktoum made the disclosure in an interview with Bloomberg TV at this week's Arabian Travel Market in Dubai.
He said he was hopeful of news about the UAE being taken off the UK red list within the next week.
The UK has allowed the resumption of overseas travel from this week with destinations being given a red, amber or green designation. Travelers visiting red countries must pay for a 10-day hotel quarantine stay as well as a pre-departure test and two PCR tests on their return to the UK.
Asked if he thought the UK was being transparent enough in clarifying what conditions must be in place for a country to moved from red to amber to green status, he replied: "I don't think so. It is very difficult to understand.  I think we proved to the world that the UAE today is in the top three in terms of vaccinations. We have more than 150,000 British citizens that live here. I'm sure they want to go back home to their country."
British tourists have long been an important source of tourism revenue for the emirate. However the UAE has been on the country's red list for travel since mid-January.
Emirates Airline expects to operate at 70 percent of its pre-pandemic capacity by the end of this year, Al-Maktoum revealed.
He said the company maintained strong financial solvency despite the devastating impact of the pandemic on the global aviation sector, Bloomberg reported.
The Dubai flag carrier may obtain further financial support from the Dubai government and could also issue bonds, he said.
“We are dealing with an emergency situation that changes on a weekly or even daily basis,” he said. “We are working on long and short trips. We currently have 151 Boeing 777 planes, and about 20 Airbus A380s in service, and we are awaiting the opening of markets and destinations to gradually return them,” he said.
Emirates Airline and flydubai were working to improve cooperation and develop further partnerships, he added.


Egypt to prioritize vaccination of tourism workers

Egypt to prioritize vaccination of tourism workers
Updated 18 May 2021

Egypt to prioritize vaccination of tourism workers

Egypt to prioritize vaccination of tourism workers
  • About 65 percent of tourists in Egypt head to those coastal destinations

DUBAI: Egypt is prioritizing the vaccination of tourism workers to support the sector’s recovery and is on track to announce full inoculation of two resort areas this month, its tourism minister said.
While Egypt’s tourism industry is still reeling from the COVID-19 pandemic, the sector has picked up in recent months, with more visitors heading to resorts along the Red Sea and Mediterranean coasts.
“We will prioritize workers in the tourism industry, which is an essential sector for Egypt’s economy,” Tourism and Antiquities Minister Khaled Al-Enani told AFP.
“In May, I will announce, along with the minister of health, the complete vaccination of Egyptian workers in hotels, resorts, businesses and restaurants in South Sinai and the Red Sea,” he said on the sidelines of a travel industry conference in Dubai.
About 65 percent of tourists in Egypt head to those coastal destinations, he said.
Enani said other tourist spots will follow, such as Luxor, Aswan and the capital Cairo, home of the Giza pyramids and major museums.
Egypt, which has a population of approximately 100 million, has administered some one million doses, according to authorities.
About two million people work in the tourism industry or organizations linked to it.
Along with its pyramids and pharaonic temples, Egypt is also known for its seaside resorts.
After experiencing “significant and continuous loss” since the coronavirus outbreak, the sector has picked up, said Enani.
He said Egypt welcomed 500,000 tourists in April, more than double the number in January and up from just 200,000 tourists a month in the second half of last year.
“The important thing is there is an upward curve,” Enani said.
“We hope the numbers will increase again in the near future with the opening of some countries and the easing of restrictions, including in Arab countries, Europe and Russia,” he said.
“The return of tourism in Egypt does not only depend on us, but remains linked to other countries.”
Cairo has announced several major new archaeological discoveries in recent months, hoping to revive a sector which was battered by a 2011 uprising, political unrest and jihadist attacks.
While the industry recorded a rebound of nearly $13 billion in revenues for 2018-2019, tourism was hit hard again by the  pandemic.
Official figures show a drop of more than 20 percent in revenues for mid-2019 to mid-2020.
Egypt reopened to foreign tourists in July last year after having closed its borders in March. Visitors only need to produce a negative PCR test.
Russia earlier this year resumed flights to Egypt’s Red Sea resorts after the lifting of a flight ban.
Moscow banned direct flights to Egypt after the 2015 bombing of a Russian airliner shortly after it took off from the Red Sea resort of Sharm el-Sheikh, killing all 224 people on board.
 


Saudi sovereign fund PIF boosts US equities exposure to over $15 billion

Saudi sovereign fund PIF boosts US equities exposure to over $15 billion
Updated 18 May 2021

Saudi sovereign fund PIF boosts US equities exposure to over $15 billion

Saudi sovereign fund PIF boosts US equities exposure to over $15 billion
  • Fund increased its US stock holdings to $15.4 billion in the first quarter

DUBAI : Saudi Arabia’s sovereign wealth fund has increased its US stock holdings to $15.4 billion in the first quarter from nearly $12.8 billion at the end of 2020, according to a US regulatory filing on Monday.
The Public Investment Fund (PIF) bought 2.9 million class A shares in SoftBank Group Corp-backed Coupang Inc, equivalent to $141 million, and dissolved its share stake in Suncor Energy, according to a Securities and Exchange Commission filing.
It more than doubled its position in Activision Blizzard to 33.4 million shares from 15 million shares at the end of the fourth quarter, which led it to a $3.1 billion exposure from $1.4 billion.
The fund increased its shares in Electronic Arts Inc. to 14.2 million, equivalent to $1.9 billion, from a $1.1 billion position at the end of the previous quarter.
PIF, which did not immediately respond to a comment request on the filing, is at the center of Saudi Arabia’s plans to transform the economy by creating new sectors and diversifying revenues away from oil.
The $400 billion fund is expected to inject at least $40 billion annually in the local economy until 2025, and increase its assets to $1 trillion by that date, which would make it one of the world’s biggest sovereign wealth funds.
“PIF would have wanted to take advantage of the bullish sentiment in equity markets in Q1 to make opportunistic investments and add to its portfolio,” said Rachna Uppal, director of research at Azure Strategy.
“In line with domestic efforts to achieve the objectives of Vision 2030, the Saudis also appear to be favoring investments into sectors such as technology, mobility, and especially future mobility, tourism and entertainment,” she said.
At the start of last year PIF piled up minority stakes in companies worldwide, taking advantage of market weakness caused by the coronavirus crisis.
Monday’s filing showed the value of its biggest US stock holding, Uber Technologies, rose to nearly $4 billion in the first quarter, from $3.7 billion as of Dec. 31, as the ride-hailing company’s shares gained value during the period.
PIF was an early investor in Uber, taking a $3.5 billion stake in 2016, three years before its listing in 2019.


Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid

Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid
Updated 18 May 2021

Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid

Qatar Investment Authority to take $740m chunk of US renewables firm Avangrid
  • QIA will buy shares worth $740 million and Iberdorla, the largest shareholder in Avangrid

RIYADH: Renewable energy provider Avangrid said it would sell shares worth a total of $4 billion to both the Qatar Investment Authority (QIA) and Spanish Iberdrola Group for $ 51.40 a share.
QIA will buy shares worth $740 million and Iberdorla, the largest shareholder in Avangrid (based in Orange County, Connecticut, US), will purchase approximately $3.26 billion of stock, Asharq Business reported.
The deal is expected to close on Tuesday.
The Qatar Investment Authority last March also acquired 16 percent of the 53 million shares offered by Siemens Healthineers, through a private placement of $2.8 billion.
The fund is targeting deals in Asia, in an attempt to diversify its investment portfolio, which has a great focus and weight in America. Northern and Europe, Chairman Sheikh Mohammed bin Abdulrahman Al-Thani said in a previous interview with Bloomberg.

 


Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round

Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round
Updated 18 May 2021

Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round

Egyptian neobank Telda raises $5m in Sequoia-led pre-seed round
  • It was the first investment for the American venture capital firm in the Middle East and North Africa

DUBAI: Telda, a Cairo-based digital banking application, has raised $5 million during its pre-seed funding round organized by US firm Sequoia Capital.
It was the first investment for the American venture capital firm in the Middle East and North Africa.
Global Founders capital and Class 5 Global also participated in the round.
The app recently announced it has received license from Egypt’s central bank to issue cards and on-board customers to its platform.
It has received 30,000 sign ups since it started its operations, it said.
The funding comes as digital-only banks rise in popularity across the region, where 60 percent of the population is estimated to be under the age of 25.
“Egypt boasts of a large, young, talented and tech savvy population with a strong appetite to innovate,” Sequoia partner George Robson said.
Egypt is among the top 10 countries most reliant on cash and with the highest rate of unbanked people, according to Merchant Machine.
“Today’s funding milestone promotes the digital transformation of the Egyptian economy and allows Telda to provide everyone with access to important financial services so they can fully participate in the economy,” Telda chief technology officer Youssef Sholqamy said.
Sholqamy, who was a former senior engineer in Uber’s infrastructure team, co-founded the startup with Ahmed Sabbah, who also founded the Egyptian bus-hailing service Swvl.