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Monday, 19 November 2018

Mineral Resources Act sent to House for review

LEGISLATION WATCH- Amendments to Mineral Resources Act sent to House: The government has sent long-awaited draft amendments to the Mineral Resources Act to the House of Representatives for review, Oil Minister Tarek El Molla said. El Molla reiterated that the amendments were made primarily to draw investments in the flagging mining sector, which holds world-class potential, but is hobbled by an outdated economic framework better suited to the oil and gas industry. El Molla noted that the ministry will begin immediately implementing the reforms laid out by consultancy Wood Mackenzie as soon as the House passes the amendments. Wood Mackenzie had been contracted by an affiliate of the Oil Ministry to lay out an appropriate development strategy for the sector.

El Molla expects the law’s executive regulations will be issued within six months of the bill passing in the House of Representatives and being signed into law by President Abdel Fattah El Sisi.

Background: While few details of the bill have been revealed, we expect it will see Egypt scrap its oil-and-gas-style production sharing agreement and move to a tax, rent and royalty model, eliminating the requirement that miners enter into 50:50 JVs with the sector’s regulator. It’s also expected to allow exploration companies to acquire exploration ground without first obtaining exploration licenses. The amendments, which aim to attract significant foreign interest in the nation’s mining sector, have been praised by industry leaders.

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