Egypt awarded five concessions from its first gold exploration tender in eight years to four companies, including two foreign ones, the country’s Minister of Petroleum Tarek El Molla announced on July 3.

England-based Veritas Mining Limited, Ghassan Spain Investment and East Gas Company received one concession each, and Resolute Egypt Limited received two. The concessions were mostly located in the Eastern Desert between the Nile River and the Red Sea, and one area in the Israel-bordering Sinai Peninsula.

In the press release, El Molla said the ministry is prioritizing development of Egypt’s mining sector and wants to turn it into “one of the main pillars of the Egyptian economy.”

When the exploration tender was announced in mid-January, however, all three gold mining companies already operating in Egypt said they would not bid due to unattractive terms, raising doubts that the country would have any bidders.

Egypt's first gold exploration tender met with indifference by mining companies operating in the country

“The current terms on offer, in our view, are far more onerous than the previous two bid rounds and as such are unattractive to the investor,” Centamin chairman Joseph El-Raghy told CIM Magazine at the time. Centamin, a company traded on the London Stock Exchange, operates Sukari, Egypt’s only gold mine.

The terms of the tender would require the concession holder to form a 50-50 joint venture with Egypt’s mineral resource authority, EMRA, and share the company’s profits after costs are recovered. Companies must pay multiple fees and bank bonds before beginning work on their concessions.

After a company makes a commercial discovery, its exploitation permit would last 15 years and could be renewed for an additional 15 – but the extension period would not guarantee any tax relief. The country currently charges a five per cent royalty.

The tender announcement comes as the country is also promoting a major mining development zone to Canadian and other foreign companies, as part of its Golden Triangle project. The project aims to create regions for mining, agriculture and tourism in a region stretching from Qena and Sohag to the Red Sea ports of Safaga, Hamrawein and Abu Tartour, and increase employment in the area. The government established a special authority to develop the area in late January.

With files from Kate Sheridan