Petroleum minister: Sukari gold mine problem resolved

Petroleum minister: Sukari gold mine problem resolved

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Thu, 13/12/2012 - 21:49

Petroleum Minister Osama Kamal has said that the dispute between the Egyptian General Petroleum Corporation and Centamin, the company that has the concession to work the Sukari gold mine near Marsa Alam, has been resolved.

“We agreed on the diesel cost,” Kamal said, stressing the government's desire to encourage private investment in petroleum and mining.

The petroleum corporation had demanded that the company pay some LE403 million in price difference for quantities of subsidized diesel supplied to it from December 2009 until January 2012. The company meanwhile insisted it should not be charged retroactively, and suspended its operations on Wednesday.

There has been no comment Thursday from Centamin.

Centamin has been struggling to keep operations running since October, when the shares of the London-listed mining giant tumbled, wiping about 40 percent off its share price, after an Egyptian court ruled void the company's rights to operate the lucrative mine. The court advised amending rather than revoking the contract, and the appeal will be heard in 2013.

The case, filed by Hamdy al-Fakhrany, a former member of the now-dissolved Parliament, argued that Egypt was not receiving its entitled financial returns from the mine. He said the concession granted to Centamin had not been approved by Parliament, which was grounds for the lease to be ruled invalid.

Fakharany had also been behind a number of cases challenging contracts selling state land to real estate companies during the Mubarak era.

Centamin, which owns a 50 percent stake in Sukari through its subsidiary Pharaoh Gold Mines, said in early October that it was on target to produce 250,000 ounces of gold this year, after having ramped up production in the third quarter. The Egyptian Mineral Resources Authority owns the remaining 50 percent stake in the mine.

Edited translation from Al-Masry Al-Youm