gold news from egypt

Egypt to produce 8 tonnes of gold in '09
Mon 14 Jul 2008, 9:23 GMT

[-] Text [+] By Summer Said

DUBAI (Reuters) - Egypt, which stopped gold production in 1958, will produce 8 tonnes of the metal from mines in the eastern desert in 2009, the chairman of the Egyptian Geological Survey and Mining Authority said on Monday.

The Arab world's most populous country, which once considered gold the skin of the gods, is revisiting ancient gold deposits, some unworked for 2,000 years.

"We have been producing gold since last December and one of the mines that started production has a reserve of 13 million ounces of gold," Hussein Hammouda said.

"Once this mine is fully operational, it won't be only one of the biggest in Africa, but rather one of the biggest worldwide," he told Reuters in a telephone interview from Cairo.

Egypt's gold production stopped in the late 1950s as the volume mined was considered too small to be profitable. The country produced 7.4 tonnes from 1902 to 1958.

"We are planning to produce 8 tonnes of gold in 2009, which is more than what the country had produced in a century," Hammouda said.

"This is only the beginning ... and we are planning to become a major producer in the region as we explore other mines we have," he said.

The country hopes this year's output will reach at least 15,000 ounces of gold, Hammouda said.

The revival plans for gold production were boosted last year when the north African country signed a memorandum of understanding with the International Finance Corp (IFC), the private sector lender of the World Bank, to replace antiquated mining laws.

Egypt's old regulations, based on profit-sharing, made it virtually impossible for foreign mining players to exploit the reserves, while local companies lacked the capital or expertise to develop a commercial, home-grown industry.

Last year, Egypt offered eight gold mining concessions for various parts of the country. The 2007 round of concessions were awarded to five companies from Canada, Australia, Europe and the United Arab Emirates, Hammouda said.

"We are planning to offer a second round of concessions before the end of this year ... they will include about eight gold mining concessions and we are also looking at concessions for silver and other materials," he said.

First-quarter gold demand in Egypt was up 14.5 percent at 18 tonnes, while sales value surged 63.5 percent to $641 million, industry-funded World Gold Council said in May.

The once leading world gold buyer is likely to continue seeing double-digit growth in demand for the yellow metal over the next five years as the economy expands and tourism grows, it added.

Ancient Egyptians used gold as a day-to-day ornament and buried their pharaohs bedecked with the precious metal. The famous funerary mask and coffin of pharaoh king Tutankhamen was made from 110 kg of pure gold.