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Egypt: Mineral Industry Overview

Egypt was responsible for 2.1% of the world’s total natural gas output and 0.9% of the world’s crude oil supply.
| 01.10.2011

Egypt was a significant producer of cement, direct-reduced iron (DRI), and hydrocarbons in 2009. It was the leading African country in petroleum products output, the second ranked producer of natural gas in Africa after Algeria, and the fifth ranked producer of crude oil in Africa. Egypt was responsible for 2.1% of the world’s total natural gas output and 0.9% of the world’s crude oil supply. Egypt was the world’s 11th ranked cement producer and accounted for 1.5% of the world’s cement production. The country was the world’s seventh ranked producer of DRI and accounted for 4.5% of the world’s total production. Additionally, Egypt produced aluminum, barite, basalt, bentonite, coke, construction sand and gravel, dolomite, feldspar, ferroalloys, granite, gypsum, ilmenite, iron and steel, iron ore, kaolin, limestone, manganese, marble, phosphate rock, quartz, salt, sandstone, secondary copper, silica sand, talc, and vermiculite (BP p.l.c., 2010; Midrex Technologies, Inc., 2010; Organization of the Petroleum Exporting Countries, 2010; van Oss, 2011).

Minerals in the National Economy

In 2009, the Egyptian economy grew at a rate of 4.7% in real terms compared with 7.2% in 2008. The economic activity of the mining sector in Egypt was 14.9% of the country’s gross domestic product (GDP) compared with 15.6% of the GDP in 2008 and 15.2% of the GDP in 2007. Construction and building activity increased by 20% in 2009 compared with that of 2008 because of large infrastructure projects that were developed by the Government in the housing, public works, and transportation sectors. Investment spending on natural gas projects increased by 41% and decreased by 50% on crude oil production projects compared with that of 2008 (Bank Audi S.A.L., 2010).

Net foreign direct investment (FDI) played an important role in Egypt’s mineral industry. Net FDI increased by 53.4% to $3,781 million in 2009 from $2,464 million in 2008. The United Kingdom was the source of most of the FDI, followed by the United States, the United Arab Emirates, Saudi Arabia, and Italy (Bank Audi S.A.L., 2010).

Government Policies and Programs

The draft of the new mining law, which was prepared by the Egyptian Mineral Resources Authority (EMRA) with the help of the International Finance Corp. (IFC) of the World Bank Group in 2008, was still waiting for Parliamentary and Presidential approval as of yearend 2009. Investment law No. 8 of 1997, was the legal framework for several mining companies that were established in the country in the past decade. The law protects investments in the country against nationalization and provides incentives for investing in mining and the manufacturing of fertilizer and petrochemicals in the country’s Free Zones.

The Government designated gold production and natural gas processing, treatment, and transportation projects as strategic projects for the development of the mineral sector. The Egyptian Mineral Resources Scientists Council of the Ministry of Petroleum developed a long-term mining strategy for the country. The national strategy was focused on developing the mineral resources of the Abu Tartur phosphate rock reserves, which are located in the Western Desert; the Al Wadi Al Gadid phosphate project, which is located in the southeastern part of the country; and the Sinai Peninsula. The Abu Tartur project was under the control of an investment production company owned by the Ministry of Petroleum, the Ministry of Finance, and the National Investment Bank (Ministry of Petroleum, 2010).

Egypt’s fertilizer manufacturing industry, which produced about 10 million metric tons per year (Mt/yr) of nitrogen and phosphate fertilizers, attracted foreign investors because of the country’s large mineral resources of phosphate rock, the availability of natural gas, and Egypt’s proximity to world consumers in Africa, Europe, and South Asia. A consortium of local banks that included Arab African International Bank, Banque du Caire, Banque Misr, and National Bank of Egypt approved a $1,050 million 9-year loan to the Egyptian Nitrogen Products Co. (ENPC), which was a wholly owned subsidiary of Misr Fertilizer Production Co. S.A. (MOPCO). The loan would be used to triple MOPCO’s fertilizer production at the Rehab Industrial Free Zone in Damietta (Bank Audi S.A.L., 2010).


The mineral commodities for which production increased in 2009 compared with that of 2008 included cement, crude oil, DRI, ferrosilicon, granite, gypsum, ilmenite, iron ore, limestone, manganese, natural gas, phosphate rock, quartz, salt, sulfur, and vermiculite. Notable decreases in production compared with their respective levels of production in 2008 included that of ammonia, coal, coke, crude steel, dolomite, fluorspar, kaolin, lime, marble, pig iron, sandstone, total refined petroleum products, and urea.

Structure of the Mineral Industry

The Ministry of Petroleum was in charge of managing the country’s metals, industrial minerals, and mineral fuel industries through five independently managed entities—the Egyptian General Petroleum Corp. (EGPC), the Egyptian Natural Gas Holding Co. (EGAS), the EMRA, Ganoube El Wadi Holding Co. (Ganope), and the Egyptian Petrochemical Holdings Co. (ECHEM). The EMRA was responsible for the exploration and exploitation for Egypt’s mineral resources (excluding hydrocarbons) and the Egyptian Company for Mineral Resources (ECMR) was EMRA’s production arm. The EGPC managed the exploration for and the production, refining, marketing, and distribution of crude oil. The EGAS administered the country’s natural gas activities, including the exploration for and the marketing, processing, production, treatment, and transportation of natural gas. Ganope was responsible for all natural gas and crude oil activities in Upper Egypt. The ECHEM carried out all the petrochemical operations in the country.

The Industrial Development Authority (IDA) of the Ministry of Trade and Industry (MTI) was responsible for issuing licenses for new cement and steel plants as well as for expanding the capacities of the existing plants. One of MTI’s charges was to ensure the presence of a sufficient supply of cement, reinforcement bar (rebar), and other building materials in the local markets.

The Holding Company for Metallurgical Industries was an Egyptian joint stock holding company (E.J.S.C) organized to operate under the provisions of the public Enterprise law. Its affiliates included Aluminium Co. of Egypt (Egytalum), Delta Steel Mill Co., Egyptian Copper Works Co., Egyptian Ferroalloys Co., Egyptian Iron and Steel Co. (Hadisolb), Egyptian Co. for Metallic Construction, El Nasr Coke and Chemicals Co., El Nasr Forging Co., El Nasr Mining Co., El Nasr Pipes and Fittings Co., and the General Co. for Ceramics and Porcelain.

El Nasr Mining produced several mineral commodities, including barite, clay, feldspar, gypsum, ilmenite, iron ore (iron oxide), kaolin, magnesite, phosphate rock, quartz, and talc. tAS Flowrance Group was a private company that produced and exported dolomite, feldspar, fluorite, granite, limestone, marble, phosphate rock, quartz, sandstone, silica sand, and talc from its mines at Aswan, El Minya, and the Red Sea coast (El Nasr Mining Co., 2009; TAS Flowrance Group, 2010).

The ECMR, which was corporate entity of the EMRA, produced 15 mineral commodities in 2009, including bentonite, calcium carbonate, feldspar, fluorspar, granite, gypsum, ilmenite, iron ore (oxide pigments), marble, phosphate rock, quartz, talc, tantalum, white sand, and vermiculite. ECMR was also a partner with Gippsland Ltd. of Australia to develop Abu Dabbab’s tantalum-tin-feldspar deposit and Wadi Allaqi’s gold-copper-nickel deposit. The company also created a joint venture, Quartz Misr, with local investors to exploit marketable quartz deposits in the Eastern Desert of Egypt (Egyptian Company for Mineral Resources, 2010).

EMRA was also a 50-50 partner with Centamin Egypt Ltd. of Australia in the development of the Sukari Gold Mine project. The cement and steel markets had both state-owned and private producers, but were dominated by private companies. MTI was responsible for issuing licenses to build cement, fertilizer, and steel plants and for regulating the cement and steel markets. MTI issued 8 permits for new cement plants and 2 for the expansion of existing plants and announced plans to offer 12 permits to build cement plants in 2010 to meet the country’s increasing demand for cement (Hasan and others, 2009; Thomson Reuters, 2010).

Mineral Trade

In 2009, Egypt’s total exports were valued at $23.1 billion, which was a decrease of 18% compared with $29.8 billion in

2008. The value of petroleum products exports decreased by 30% to $6.3 billion in 2009 from $9.0 billion in 2008. The value of mineral industry exports, which included crude oil and natural gas, iron and steel products, petroleum products, and unalloyed aluminum, was 45.6% of total exports compared with 26.8% of total exports in 2008. The value of petroleum products exports was 23.7% of total exports, including crude oil exports, which was 19.7% of total exports. The value of articles of iron and steel exports was l.2%, and that of unalloyed aluminum was 0.2% of total exports. The volume of cement exports decreased to about 900,000 metric tons (t) from about 1.7 million metric tons (Mt) in 2008 and 4.7 Mt in 2007. The sharp decrease in cement exports was attributed to the Government’s ban on exports for most of 2008 and 2009 and to the increased demand for cement in the local market (Bank Audi S.A.L, 2010a, p. 5; 2010b, p. 3-5).

The value of Egyptian imports decreased by about 19% to $45.6 billion in 2009 from $56.6 billion in 2008. The value of petroleum products imports was 7.5% of the total value of imports compared with 9.3% in 2008 and 14.4% in 2007. The value of imports of iron and steel products was 6.7% of the total value of imports in 2009 compared with 8.7% in 2008 and 10.4% in 2007. The value of crude oil imports was 3.1% of the total value of imports in 2009 compared with 7.5% in 2008 and 11.6% in 2007 (Bank Audi S.A.L., 2010b, p. 3-4).

In 2009, the trade balance in Egypt shifted for finished and semifinished steel as the country became a net importer of manufactured steel. Egypt was the second ranked importer of rebar in the Middle East and North Africa region after the United Arab Emirates. The volume of Egypt’s exports of finished and semifinished steel products decreased to 337,000 t from 1,065,000 t in 2008. The volume of finished and semifinished steel products imports, however, increased to more than 5.5 Mt in 2009 from about 3.1 Mt in 2008. The majority of steel rebar imports (90%) was from Turkey. Imports of flat steel products were mainly from Russia and Ukraine combined (29%), Saudi Arabia (25%), Libya (13%) and others (21%).

Steel imports from Turkey triggered the Government to accuse the Turkish steel exporters of dumping. Hadisolb was among the companies that filed a dumping complaint against Turkish steel exporters. Hadisolb sold only 60% of its steel products, which the company attributed to alleged Turkish steel dumping in Egypt’s steel market. Egypt scrap imports decreased by 46% to 1.3 Mt compared with 2.4 Mt in 2008 (Arab Steel, 2009; 2010; World Steel Association, 2010).