A recent deal between AKH Gold and Egypt’s Petroleum and Mineral Resources Ministry will increase the Sawiris family’s stake in the country’s gold sector. The deal licenses AKH Gold, an affiliate of the Sawiris, to excavate gold in the Eastern Desert.
The newly signed contracts will have AKH Gold investing a total of about $4.1 million, Arab News cited the ministry as saying.
In making the move, the Sawiris family is looking to become a major gold player in the country and across the continent.
Egypt’s gold sector
Egypt’s gold exists in the Eastern Desert, with production on Sukari Mountain and in Hamash and Wadi al-Alaqi.
The Eastern Desert’s estimated potential gold reserve stands above 300 tons, African Mining Market revealed. Hence, over the years, Egypt has made efforts to attract investors to unearth the mineral, aiming to become a leading global producer. However, most miners have taken issue with the country’s Mineral Wealth Law.
Investors have long complained that country’s system of mandatory joint ventures, stiff royalties and profit-sharing agreements make it unprofitable to explore for and exploit minerals, Reuters reported. Nonetheless, the government issued new regulations that appear to eliminate a bulk of these concerns in January 2020.
Mubasher recently reported that the country’s gold reserves have continued to decline for the third month in a row, sliding by $456 million in the first quarter of 2021 from $4.39 billion at the close of 2020. The pressure on the country’s gold sector came as a result of a sharp drop in demand that has triggered losses in the global gold sector.
Sawiris’ stake in West African gold mines
In March, the Sawiris family’s La Mancha Holdings announced an investment in a multinational miner, Endeavour Mining Corporation (Endeavor), worth 200-million Canadian dollars ($159 million).
Before that time, Endeavour acquired the Canada-based gold company Teranga Gold for 2 billion Canadian dollars ($1.9 billion) in 2020. Teranga Gold bought several gold mines such as Sabodala, a large-scale gold mine located in the West African Birimian geological belt, and the Massawa mines in Senegal.
The acquisition positioned Endeavour as West Africa’s leading gold producer, with an annual production capacity of about 1.5 million ounces. La Mancha’s investments in Endeavour amount to 8,910,592 common shares, thus securing its stake in West African gold mines.