The 82 exploration permits issued by Egypt to 11 junior and major mining and exploration companies, along with the country's underexplored, but promising, mineral resources and its location, bode well for the development of its mining industry and for its role as a mining exploration and services hub in the Middle East and North Africa region, mining consulting services multinational The MSA Group (MSA) and Egyptian partner Gold Pyramid Group (GPG) say.
The companies have formed a partnership, MSA-GPG, to provide a full range of mining services to mining and exploration companies operating in Egypt and have taken advantage of first movers advantage in a rapidly developing market with big potential.
GPG CEO Mostafa Talaat notes that, since its establishment in 2016, GPG has tried to capture as much of the mining services market as it could, but that the potential gap between supply and demand encouraged the MSA-GPG partnership to exist in order to provide provide world class services combined with in-depth local knowledge and logistical support.
MSA Group MD Dr Ian Haddon adds that the MSA-GPG partnership also has the potential for expansion into neighbouring countries, including Sudan, and across North Africa.
Haddon highlights that the Neoproterozoic geology of the Arabian-Nubian Shield likely hosts a complete continuum of gold deposits from small shallow gold deposits amenable to smallscale mine operators to large, tier-one deposits and adds that this geology also extends across the Red Sea into Saudi Arabia, where MSA has been providing services to clients over the past nine years.
MSA head of exploration services Craig Blane agrees that the area is attractive to explorers: "One of the key factors that attracted the junior and major miners to explore in Egypt is the potential to discover tier-one gold deposits in the Eastern Desert of Egypt. Ground conditions are relatively conducive to efficient exploration, sites are accessible and infrastructure in the region is well developed, and the geological potential is immense.
"Egypt is a prospective destination and, apart from the gold deposits that are known to occur, MSA Group and GPG believe base metals, critical metals and rare earth element deposits will be discovered. While the initial attention of mining and exploration companies is on gold, we do expect the industry to expand into other metals once these deposits have been better defined and are better understood," he says.
Talaat points out that Egypt is underexplored, even though it is known as one of the oldest nations to undertake mining of gold and other minerals since Pharaonic times, virtually no exploration has been undertaken since the pharaonic era. Being under explored, highly prospective and having policies supportive of mining makes Egypt attractive to investors.
"The Egyptian government is initially focusing on gold to attract good mining and operating companies but the government is expected to include other minerals in its plans over time, especially once deposits have been identified through exploration."
Exploration is typically a six- to eight-year process and, for Egypt to reach its stated goal of having mining contribute 5% of gross domestic product by 2040, the mining industry will need to be nearly ten times larger. The government understands the need for stability in order to attract explorers and miners, and the policy environment is expected to remain stable and favourable for the mining industry, with amendments to legislation and exploitation agreements expected to mainly involve streamlining and fine-tuning. The new mining codes already include industrial and environmental best practice requirements, Talaat says.
“The first round of bids for exploration rights has resulted in an increase in the number of companies exploring in the country from three or four to more than 11, with more companies expected to be added to the list after the second bid round award," says Talaat.
There are already visible early-stage investments in, and developments of, the mining industry, with certain new entrants establishing bases and laboratories in Red Sea Governorate to support exploration and, potentially, new mining operations.
“This has already had a positive impact on businesses and development in towns along the Red Sea coast,” notes Haddon.
Talaat concurs, adding the infrastructure that has been developed, and government plans and projects for further infrastructure development, has resulted in lots of activity taking place, with some supporting industries experiencing a boom.
"There has been significant demand for services provided to the mining and exploration industry in Egypt over the last two years,” says Talaat.
This development will not only benefit mineral extraction, but also support broader sustainable development.
MSA-GPG focuses on building skills and developing mining and geology graduates as one of the first key elements to support its mining industry clients in Egypt. The quality of services and support are crucial for maintaining the success of its own business and those of its clients, Talaat notes.
Given the demand for services and the prospects for the discovery of new deposits and growth of the mining industry within Egypt, as well as potential addressable markets in the region, MSA Group believes its partnership with GPG will be long-term and beneficial for the companies and their clients, says Haddon.
"This is the beginning of the journey and we will be able to support further investments into Egypt with our partners GPG," he says.