REGULATION WATCH- We have more details on the Mineral Resources Act’s exec regs: Additional details have been released on the executive regulations to the amended Mineral Resources Act, according to a document obtained by Enterprise. Among the key regulations:

Royalty payments: We had reported last month that private mine and quarry operators will pay out royalties of up to 10%, income tax of 22.5%, and EGP 25k a year per sq km in concession rent under the bill. The document we reviewed shows that royalties will be payable to the Egyptian Mineral Resources Authority (EMRA) according to the type of mine. The royalty rates apply to 10 types of minerals — including gold, mica, zinc, copper, iron, and phosphate — to compensate for extraction, with the rate varying depending on the material. Companies will also pay 1% of the value of annual production for mines and 6% for quarries. This payment will be made directly to the governorate in which the mine or quarry is located.

Issuing and renewing licenses: Exploration licenses will be granted for two years at a time and will be eligible for renewal up to three times. Rent increases of EGP 5-20k per sq km will be applicable after each renewal. Rent can also be changed outside that timeline every three years through a decree from the prime minister, and based on proposals from EMRA and the Oil Ministry. Licensees will need to submit their exploration proposal within 60 days of receiving their license.

Exploitation licensees will pay an annual rate of EGP 25k per sqkm, and EGP 9 per sqm for white sand. They will also pay an insurance amount equal to the rental value within 30 days of notification. Companies will also pay EGP 15k per sqkm for lands used outside the licensed area for industrial or storage purposes (Article 85).

Egypt awarded its first new gold exploration license in 15 years to Aton Resources, we reported on Sunday. The Vancouver-based company will prospect for gold in the Eastern Desert’s Hamama region under a 20-year license with an additional 10-year option period. The company will also retain rights to explore in the Abu Marawat concession area in the Arabian-Nubian Shield, north of Sukari mine, where existing player Centamin is operating.

The gov’t will also launch an international gold exploration and mining tender for areas in the Eastern Desert by the end of this month or early March. It will be the first mining tender since the Mineral Resources Act was amended last year and the first for gold exploration since 2017. Centamin is currently the only company producing gold in Egypt from its Sukari mine, while Aton Resources and Thani Stratex Resources are still exploring concession areas but are yet to strike gold. Centamin achieved an 8% bump in production in 2019 (pdf) and plans to increase this figure by at least another 6% to 510k oz this year. The gov’t hopes the tender will boost investment in the sector, raising contribution to GDP to EGP 7 bn by the end of the decade.

Background: The amended act was ratified by President Abdel Fattah El Sisi last August. Besides introducing the new model, it stipulated that royalty payments cap at 20%, and introduced a minimum of 5%. It also outlines the responsibilities of the newly-established committee that will advise on the royalty rate for each raw material, as well as the new authority empowered to issue licenses to, and withdraw them from, governorates.