General Abdel Fattah al-Sisi decided to legalise the army’s control over mineral wealth after they have monopolised investments and working in mines, quarries, and salt mines, as he had also given the army and the military control over multiple sectors, such as fisheries and livestock.
Al-Sisi issued a presidential decree authorising Ministers of Petroleum and Mineral Resources, Local Development, Housing, Utilities, and Urban Communities to enter into contracts with the Egyptian Company for Mining, Management and Exploitation of Quarries and Salt Works. This is to enable the company mentioned above to exploit the quarries and salt mines that fall within the jurisdiction of all governorates and the Urban Communities Authority.
The Egyptian Company for Mining, Management and Exploitation of Quarries and Salt Works is affiliated with the National Service Projects Organisation of the Armed Forces, which means that the army controls this sector and controls the mineral wealth and turns it into a private investment for the armed forces. Military investments are not included in the state’s general budget.
Quarries and saltpans
The decision, which was published in the Official Gazette, stipulated that the period of exploitation granted to the company for those quarries and salt mines would be 30 years, according to the agreement signed between the four parties. The agreement clarified that the state’s natural resources from the ores of mines, quarries, and saltwater resources located on Egyptian lands belong to the people, and the country is committed to preserving them, not depleting them, and taking into account the rights of future generations.
The right of exploitation stipulated in the agreement also included all construction, operations, and activities necessary for preparing raw materials such as quarries and salt mines, and everything related to the extraction of raw materials using the latest international methods with the intention of preparing them and preparing them for industrial use. The agreement allows the army-affiliated company to manage quarries and salt mines in certain areas, whether by offering them for exploitation under a system of public practice or limited practice as the case may be.
It has the right to extend the current lease contracts with controls and conditions, and the company has the right to manage marinas and quarries that it deems to be in the public interest to manage and exploit them by itself or in partnership with others. It is noteworthy that Egypt has 3,000 quarries, 40 per cent of them in the Red Sea, 20 per cent in Upper Egypt, and 15 per cent in the Gulf of Suez, according to local studies.
Before the decision for the army’s control of quarries and saltpans was issued, some news sites and channels published in July a leaked secret document revealing part of what it described as the scheme of the militarisation of the quarries. The document, issued by the General Secretariat of the Ministry of Defence, showed that the army requested the Egyptian Cabinet to quickly end the Ministry of Defence’s demands regarding the quarry governance system.
It is also noteworthy that the Egyptian Company for the Management and Exploitation of Quarries and Salt Mines is sub-affiliated to the army. Its board of directors is headed by Major General Sayed al-Bus, who was previously the director of the chemical warfare department in the armed forces. In the document, the Ministry of Defence calls for the necessity not to make any adjustments at present to the financial ratios of the quarries that al-Sisi has identified as shares of production values, that is, 13 per cent for the Ministry of Finance, six per cent for the governorate, and 15 per cent for development projects in the governorate.
Plundering mineral wealth
Last year, the Egyptian government issued a new mineral wealth law, which is Law No. 145 of 2019, and its executive regulations in January 2020 to re-exploiting mines and quarries on its lands. The leaked document, which was confirmed by the amendments to the Mineral Resources Law and the Republican Decision, allow a company affiliated with the army to control the quarries and salt works, angered observers at the waste of the nation’s wealth in favour of a specific group.
The economic expert, Ahmed Zikr Allah, accused the regime of deliberately approving complicated laws and imposing royalties to obtain money from investors in quarries. He pointed out that the revenues of mines and quarries deliberately declined in the budget from EGP 5 billion to EGP 1 billion only, warning of the dangerous role that the sovereign bodies play in controlling Egypt’s wealth. The economic expert denounced that the Ministry of Finance obtained only 13 per cent of the quarry revenues, which means that the army is a country bigger than the Egyptian state itself.
Observers say that the army’s control of mineral resources is not new; however, what is happening now is the legalisation of theft and looting, as quarrying licenses are only granted to certain persons affiliated with the military establishment.