ECONOMY

The new gold rush? Prospecting firm hopes to strike it big in Egypt

The Friday, April 15, 2016 photo, shows a sign marking the turn-off leading to the Hamama gold exploration site, deep in the desert east of Luxor, Egypt. (AP)

Ancient Egyptians were fascinated by gold. And like most ancient cultures, they highly valued the precious metal for its aesthetic qualities and scarcity.

Fast forward to 2016, and explorers have returned to the ancient sites to hunt for gold.

While Egypt has long had gold glistening beneath the surface, the industry has for decades been stagnant. A decade into power, President Gamal Abdel Nasser nationalized the country’s gold mines in the early 1960s, leaving the industry in deterioration and decline.

But in today’s Egypt, as the country seeks to reverse its fortunes after a five year economic slump, prospectors have returned – and hope to strike it big.

“We have found gold,” said Mark Campbell, the head of Alexander Nubia, a Canadian exploration firm that has teamed up with Egypt’s government to exploit the barren eastern wilderness’s vast untapped potential.”

However, more drilling needs to be done to prove that the finding is commercially viable – setting up a gold mine requires “big money.”

“If we do find commercial quantities of gold, then we could end up spending $500 million to build a mine,” he said.

Experts say the country is heavily underexplored and that modern technology now allows much deeper excavation of the ancient sites shown on Pharaonic treasure maps.

“The basic principal in mineral exploration is to go where people have mined before,” Campbell said.

Most of Egypt’s miners left in the 1950s mined by hand, but the exploration chief hopes that modern technology will enable his firm to find far more.

At the moment, Campbell’s team is drilling core samples that are sent off for analysis in Romania. So far, the samples are promising enough for the team of two dozen explorers and specialists to have undertaken plans to open a new mine by 2019.

Egypt only has one running gold mine, Sukari, that opened in 2009, and is operated by another Western firm.

Exploration efforts by experienced international companies have long been hampered by Egypt’s labyrinthine bureaucracy and complex investment laws.

Despite several reforms that went into effect last year amid promises to investors by President Abdelfattah al-Sisi’s government, Egypt’s mining legislation still falls short of international standards.

Yet according to Campbell, a developed and mature gold and mineral mining industry in Egypt could have a “multiplier effect” on the country’s economy – especially during a currency crisis and high unemployment hitting its 90 million people.

By nature, the mining industry is labor intensive and typically generates large state revenues from royalties and taxes, as seen in other large African economies such as South Africa and Angola.

If successful, the potential benefits to Egypt from the mining industry are “huge,” Campbell said.

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Last Update: Wednesday, 29 June 2016 KSA 19:46 - GMT 16:46
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The new gold rush? Prospecting firm hopes to strike it big in Egypt
The country seeks to reverse its fortunes after a five year economic slump, with prospectors hoping to strike it big
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