Egypt plans to offer eight new gold mining concessions as part of its scheme to revive its precious metal industry, a senior official said on Wednesday. The Arab world's most populous country, which once considered gold the skin of the gods, is revisiting ancient deposits of the metal - some of which have not been worked for 2000 years.
"It is a fortune lying in the ground...and we are going to offer soon eight new gold mining concessions," Hussein Hammouda, the chairman of the Egyptian Geological Survey and Mining Authority said.
"The new concessions will be for various parts of the country," he told Reuters in a telephone interview from Cairo. The new offer follows a previous round in November, when Egypt awarded eight concessions to five companies from Canada, Australia, Europe and the United Arab Emirates, Hammouda said.
In July, Egypt will regain its status as a commercial gold producer after a 50-year hiatus. It produced a first sample gold bullion bar in April. The revival plans were boosted in January when the country signed a memorandum of understanding with the International Finance Corporation (IFC), the private sector lender of the World Bank, to replace antiquated mining laws.
Egypt's old regulations, based on profit-sharing, made it virtually impossible for foreign mining players to exploit the huge reserves, while local companies lacked the capital or expertise to develop a commercial, home-grown industry.
The new concessions and those already awarded will lift the country's output to eight tonnes in 2008, more than its total production in the last century, Hammouda said. Output is expected to reach 14,000 ounces this year, he added. Gold production stopped in 1958 as the volume mined was considered too small to be profitable. Egypt produced 7.4 million tonnes from 1902 to 1958.
Ancient Egyptians used gold as a day-to-day ornament and buried their pharaohs bedecked with the precious metal: the famous funerary mask and coffin of pharaoh king Tutankhamen was made from 110 kilograms of pure gold.
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