Resolute Mining says it will pay Mali $160 million in tax dispute
The company’s shares in Sydney were suspended on Thursday, after tumbling 40% since news of the detention of CEO Terry Holohan.
Egypt issued new regulations that appear to eliminate the need for mining companies to form joint ventures with the Egyptian government and to limit state royalties to a maximum 20%, measures long advocated by the private sector.
The cabinet released a summary of the executive regulations to the mining law after its weekly meeting on Wednesday. The law itself was issued in August.
“The royalty will not be less than 5% or exceed 20% of ore produced each year by the licensee”
Mining companies have long complained that Egypt’s system of mandatory joint ventures, stiff royalties and profit sharing agreements have made it unprofitable to explore for and exploit minerals.
Egypt is hoping a change in rules might lead to a bonanza in gold production. Neighbouring Sudan produced an estimated 93 tons of gold in 2018, which according to the U.S. Geological Survey made it Africa’s third biggest producer.
The cabinet statement indicated that although the Egyptian Mineral Resources Authority had the right to form joint ventures with a minimum state ownership of 25%, private mining companies would not necessarily have to do this if their mining agreements were ratified by law.
The statement also said mining companies would have to pay a rental value for their mines and quarries as well as royalties at a separate rate determined for each type of ore extracted.
“The royalty will not be less than 5% or exceed 20% of ore produced each year by the licensee,” the cabinet statement said.
Private mining executives said they were waiting for a copy of the actual regulations, but if the requirement for joint ventures had indeed been eliminated Egypt could well see huge interest by exploration companies.
“That is the highlight of the new regulations, something we have been chasing for a decade,” one executive said, asking not to be named.
(By Momen Saied Atallah and Mahmoud Mourad; Editing by Jason Neely and David Evans)
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