Egypt's gold story is running on two tracks at once. On one track, capital is flowing in — drilling contractor Capital Limited is bidding for nine gold exploration blocks, and the first project in the Golden Triangle Economic Zone has just been awarded. Meanwhile, Sukari, the country's flagship mine, produced 232,000 ounces in the first half of the year. On the other track is enforcement — last Sunday, the armed forces launched phase two of a crackdown on illegal gold mining in the Eastern Desert. My guest today has publicly argued that there is a third option for Egypt's informal miners — not just pushing them out, but licensing them, taxing them, and bringing their gold into the formal economy. Joining me now is Dr. Ali Bader, ex Minister Plenipotentiary for Trade and Board Member of the Egyptian United Nations Association. Doctor Bader, welcome to the show.
Thank you very much. It is my honor to be with you today.
Three weeks ago you argued publicly that legalizing informal small-scale mining is an economic necessity, not just a security matter. Two weeks later, the armed forces escalated their crackdown. Are enforcement and formalisation in conflict, or do you see the crackdown as a precondition for a legalisation framework?
I can understand the recent security campaign in the Eastern Desert because illegal mining is not only an economic issue — it also involves smuggling and border security. The area is very close to the Egyptian-Sudanese border, which is a sensitive situation given current regional dynamics. Egyptian authorities detained hundreds of people in June in the crackdown on illegal mining and smuggling. But enforcement alone cannot solve the economic problem. My view is to stop illegal mining while opening a legal door for small miners to enter the formal economy. This aligns with Egypt's broader policy of transitioning non-formal economic activity into the formal economy and pushing financial inclusion and digitalisation.
What should the formalisation framework for small-scale gold miners actually look like?
I recommend a five-element model. First, individual or cooperative licenses for Egyptian small miners with very simplified requirements — we do not want to complicate the procedures. Second, designated small-scale mining zones completely separate from the zones already granted to large companies. Third, licensed processing centres where miners can develop their methods and use more modern equipment while preserving the environmental dimension. Fourth, licensed purchasing centres with a commitment to buy gold at near-international prices — with same-day or next-day payment, preferably through banks or licensed financial institutions. Fifth, access to services currently unavailable in the informal economy: equipment finance, insurance, geological information, and legal protection for small miners.
Informal miners today get full market price in cash, tax-free. What financial incentive realistically brings their gold into official channels?
Formal channels must offer at least three advantages. Competitive prices — miners should receive something very close to the international gold price. Immediate payment — same day or next day through banks or licensed financial institutions. And access to services they currently cannot get: equipment finance, insurance, and geological information. The key is making the formal channel more attractive than the informal one, not just criminalising the alternative.
Egypt's reform program targets lifting mining from roughly 1.4% of GDP to 5 or 6% by 2030, with a target of $840 million in private investment. How much of that gap can formalised small-scale production realistically close?
It cannot be done by small-scale mining alone — it requires coordination between large companies and small miners. I would divide the contribution into three engines. First, large-scale mining — the biggest source of capital, reserves, and technology. Second, formal small-scale mining — the fastest way to capture currently invisible production and create employment in remote areas. Third, downstream processing, refining, and metallurgical industries. And I want to add something important: when we talk about the mining sector, it is not only gold. We should add silver, white sand, phosphate, and other valuable materials. If we include all of these, I am sure we can realistically reach the 5 to 6% of GDP target.
Doctor Bader, it has been a great pleasure having you with us on the show. Thank you very much.
It is my honor. Thank you very much.
