Mineral Resources Act amendments set for parliamentary approval before summer recess
LEGISLATION WATCH- Mineral Resources Act amendments expected to receive House sign-off before the summer recess: The House of Representatives is expected to give its final approval on the amendments to the Mineral Resources Act before it goes on recess in July, an Oil Ministry source told Al Shorouk on Monday. The amendments received committee-level approval last week.
Expect tenders to be issued soon after the law is passed. The source revealed that the ministry is planning to issue new mining tenders some time this year once the law is approved.
What exactly are the changes that are coming: We previously noted that the amendments would set up a new authority in charge of licensing mines and quarries, taking the power to issue and control licenses away from governorates. They would also lift a previous 16k sqm area limit, allowing the authority to issue licenses to areas of unlimited size. Licenses could also be renewed for more than one term.
The ministry source spilled the beans on other amendments:
- There will be separate contracts and agreements for exploration and extraction.
- Companies will have to pay a minimum royalty of 5% of annual production, with a 20% cap being set.
- Mining firms will have to pay 6% of a mine’s annual production to the home governorate.
- Governorates can recommend amending this “rent” but a final say can only come from the prime minister. Under current legislation, governorates had the power to dictate the payout every four years.
The timing of the news comes as Aton Resources announced progress on its recently announced capital raising: Toronto-listed, Egypt-focused mining firm Aton Resources said it has closed on the first tranche of its USD 1.5 mn private placement, issuing a total of 36,000,000 common shares at USD 0.025 per share for proceeds of USD 900,000, the company said in a statement (pdf). “The funds being raised now will allow us to continue exploration at our Abu Marawat concession area, but at the same to await the investor friendly reforms coming in Egypt to the mining terms and conditions, which investors are waiting to see and we believe will be enacted before the year-end,” President and CEO Mark Campbell said. Campbell praised last year the long-awaited amendments to the Mineral Resources Act, suggesting that the scrapping of production sharing agreements among other changes would have a positive impact on investment in the sector.