RE: Cey Drop10 Mar 2022 09:15
Info courtesy of Siko
Centamin Diesel Fuel Case Subsidy 10th Feb 2020
Siko
Price: 130.20
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Diesel fuel case
Regarding the diesel fuel case, I never looked at this in details before, but as it was mentioned here a few times over the last few days, so I thought to have a closer look.
As you now I have all the CC papers, so I looked through the latest file which is the latest commissioners report in 2013, which CEY described as £Negative£, and this is briefly what the report says about the fuel case (pages 60-64):
-Article 3, point D of the agreement states (Pharaonic company to pay for all the costs and expenses to carry out all the operations
£with the right to recover any costs/expenses as per the agreement")
-Egypt was supplying the mine daily with 1,600,000 Egyptian pound worth of subsidized fuel, while the investor was gaining 50% out of this.
-There is no mention at all in the concession agreement about the fuel supply, and there was nothing to commit the Egyptian government to supply the fuel, either subsidized or in full price.
-As the agreement did not force the investor to obtain the fuel from any specific supplier, local or international, so it either’s the investor’s responsibility to source the fuel locally or imported and to benefit from the agreed tax exception as per the agreement.
This does not affect the investor's rights to recover the costs and expenses as per the agreement.
-Egypt supply investments projects, based on law 43 year 1974 and law 230 year 1989, with subsidized fuel. All investment projects are treated the same, unless a project had a special agreement in which case that project would only benefit from the terms and conditions of that agreement.
-As the agreement between the Egyptian government and Centamin is based on law 222 year 1994, so it does not fall under the same laws as other investment projects.
-The agreement clearly states that the investor has the rights to recover any operational costs and expenses, and that includes fuel obtained at any price.
-The company, incorrectly and against the agreement, was supplied with subsidized fuel, but that does not give the investor any right or legal position.
-Petrol projects have special agreements and pay for fuel at international prices, and so should Centamin, otherwise it would be classed as favoritism, which is against the constitution and the law.
More in the report, but I think this gives you an idea of the situation..
I hope this could help you a little in your discussions..
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