Progress increases optimism about projects and investment
- Executive regulations will facilitate the implementation of Egypts new mining law
- Early draft of the executive regulations was opposed by several mining firms
- Delays to the executive regulations have caused significant knock-on delays in the sector
- Doubts remain over implementation
Egypt has published executive regulations for the countrys mining operations, increasing optimism that there will be progress in mining projects and further investment in the sector.
The regulations, which were published last week by the Egyptian Mineral Resources Authority (EMRA) after months of delays, set out a new tax and royalty structure for the mining sector and will allow the implementation of the countrys new mining law, which was passed on 9 December last year.
An early draft of the executive regulations was opposed by several mining companies and industrial chambers.
The eventual release of the regulations is positive for the sector, said one industry source.
The general atmosphere for mining has been affected by the delays to the executive regulations, but the new developments are promising. Things should pick up now over the second half of the year.
Concerns remain in the sector about implementation due to resistance from Egypts governorates, which benefited from higher revenues under the previous system.
Were still waiting for the application, but companies are optimistic overall, said the source.
In March, Egypt set out a development strategy for the mining sector that targeted increasing its GDP contribution to more than 5 per cent within 10 years, compared with less than 0.4 per cent in the 2013/14 financial year.
So far, the plan is lagging behind schedule.
One of the key objectives was new bid rounds for gold and other minerals, which were due to take place in the first half of 2015.
These never happened due to the delays in the drafting of the executive regulations.
Now that the executive regulations have been finalised, mining companies are hoping these bid rounds will take place before the end of the year.