Who Needs Oil? Going For Gold In North Africa6 Aug 2020 17:14
Aug 5 2020 - The mining industry can help diversify revenue streams, create jobs and support wider industrialisation efforts -
"It is no coincidence that Egypt’s announcement came shortly after it updated its mining code, moving away from top heavy legislation that required extensive state participation in mineral projects. The result could be a billion-dollar windfall for the country – and that is just related to discovered gold deposits, not what still remains to be found, according to minister of petroleum and mineral resources, Tarek El Molla.
The North African country hopes to attract foreign investment through the industry.
The separation of mining from energy production is crucial, if the former is to prosper. The two sectors have very different capital structures, making it difficult to fit them into the same policy framework.
With oil for instance, upfront development costs tend to be lower. But it becomes more expensive at a later stage with transport, storage and especially refining devouring an increasing amount of capital.
A study by the Department of Energy of Allameh Tabataba’i University in Iran found that it took around $15m to establish an on-shore oil well in the sanction-hit country. Another study by the mining unit of KPMG in Johannesburg found that a new mine required at least $100m. Even the initial exploration phase, when prospectors actively seek out new deposits, carries a large cost with little guarantee of a return.
For countries that get it right, the payoff can be big. Saudi Arabia last year removed mining from a sub-department of its energy ministry, creating a new, separate mining ministry.
Albara’a Alwazir, economist for the Saudi-US Business Chamber, recently published an extensive overview of Saudi Arabia’s mineral resource potential. The kingdom wants to lessen its dependence on oil, and has an abundance of unexploited mineral wealth to help it achieve this goal, he told The National.
“Saudi Arabia is endowed with a significant mineral base which it plans to use for domestic production and to become an export leader across a number of minerals, including gold, "
https://www.thenational.ae/business/why-some-countries-are-turning-to-mining-1.1058887
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My Thoughts: Egypt typically looks to Saudi Arabia as a leader in terms of economic policy which in the case of developing its mining industry is encouraging
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