"We're trying to develop the Sinai desert," he said. "I hope that if the revolution goes the right way and is not stopped by any further problems, Egypt will become known as a big gold producer in the region."
Egypt is no stranger to gold mining. As long ago as the 3rd century BC, workers living in the Old Kingdom were unearthing the precious mineral from the volcanic rocks that line the country's Red Sea coast.
Yet since the 1950s there has been virtually no serious investment in the industry. Only one company is currently producing Egyptian gold, the Australian firm Centamin, which started commercial production last year.
With an estimated 6.7 million ounces of the metal lying under more than 100 possible mining sites around the country, analysts say the potential value of Egypt's untapped reserves runs into billions of dollars.
Louise Collinge, a mining analyst for Evolution Securities, said Egypt's location in the Arabian-Nubian Shield - a band of rocks that stretches down from north of Cairo as far as the Horn of Africa - meant it was ripe for gold prospecting. But she added that with the political insecurity it would be difficult for the gold boom to take off. "It's a big worry for any investor," she said. Centamin lost millions of dollars during the Egyptian uprising and saw its stock plummet by more than 25 per cent after the toppling of its former President in February.
There are now six companies exploring for gold along the Red Sea coast, although none have yet started commercial production.
Centamin's chief executive, Harry Michael, said previous governments simply did not think the industry was viable. When company bosses tried to tell Mubarak's officials that they were sitting on a fortune, the response was incredulous. "They said, 'You guys are crazy,"' said Michael. "A lot of the country is desert. Nobody goes there and there was an opportunity for us to get something from that land for the nation and our investors."
Bakheit said the Sinai desert's reserves had remained off-limits because of political, rather than economic, reasons. He blamed the hidden "agenda" of Mubarak's relations with Israel, and believed the government had a deal with Tel Aviv not to develop large-scale mining operations in the area.
It is a view not taken seriously by Bruce Maddy-Weitzman, an expert on Egyptian-Israeli relations from Tel Aviv University. "It makes no sense. After 1979, Israel was interested in Egypt developing economically."
Nonetheless, it is clear the precarious security situation in the Sinai has hamstrung economic development. And there are other political ramifications of a future gold boom in Egypt. Under Centamin's deal with the Government, it is obliged to pump half of its profits back into the state Treasury.
In a nation where 40 per cent of the population live on less than a dollar a day, a profitable gold-mining industry - and the thousands of jobs needed to sustain it - could be a significant boon.
- Independent
