Black Sand - Egypt Richest Country on Earth.

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Hafiz
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Black Sand - Egypt Richest Country on Earth.

Post by Hafiz »

The Armed Forces is about to earn $US176 billion a year and create 20,000 jobs.

How amazing. That turnover would make them the biggest corporation in the world many times larger than Microsoft and Facebook – but thats what you expect of the world’s greatest army. These ‘facts’ are from p.16 of April 22, 2017 of that great truth teller al Ahram but not included in their on-line English version and has been translated and published by those duplicitous fools the American Chamber of Commerce in Egypt (Panama Plc). https://www.amcham.org.eg/online_servic ... t_id=37080

How could any business, except heroin dealing, generate $176 billion a year out of just 20,000 jobs? Can anyone add up in Egypt?

Wait for it – the project is in an area of great expertise for the Army. Mining. Never thought of them as miners although I’m sure they’ve dug a few holes to bury things in. They have never done mining, there has never been Black Sand mining in Egypt, no major miner invests in Egypt and the few minnows who do have been in the international press complaining about endless problems with the government including extortionate payments.

Why you wouldn’t just call for an open competitive tender from world miners skilled in this industry is a question to which there is no answer – in Egypt. Why does the Army need to do this given it can't even maintain national security.

Its Black Sand – odd place for it, hope they got a team of world standard geologists and engineers to have a look not just the useless Egyptian engineers – which is probably Magnetite used in steel production and also zircon and rutile. A geologist at the local university, Abdulrahman Ahmed Arafa has been trawling the internet begging for information on Black Sand and seems to know nothing about it nor have access to any research books or databases to improve his zero knowledge. Sounds just like an Egyptian University/Geologist.

Some commentary says the concentrations of zircon etc make it uneconomic. Maybe that’s not a problem because most Armed Forces businesses either loose money or make little – and never pay any tax.

It seems they are building a processing plant for the sand at Kafr El Sheikh in the delta about 50-300ks from the actual sea based source of the sand. If this location doesn’t make sense join the club. If you think they paid for the farming land at Kafr you win a prize – for naivety. Its probable the source of the sand will be in beach type locations way to the north, east and west which may or may not be owned by the world’s most victorious army – or by the citizens of Egypt. Digging up beaches causes problems – environmental, touristic damage, inflow of sea water etc and transporting millions of tons of sand to the far away processing plant is expensive. Given its military managed the average age of senior executives is likely to be 85 years. Whether military conscripts, invariably kids from poor families, will be forced to do the dirty/dangerous low-skill work at the taxpayers expense should be assessed by what the Army normally does in all its many other commercial ‘enterprises’.

Such businesses exploit the taxpayer and these poor kids and deliver no taxes. How they own this asset/land in the delta – which is not the 50,000,000 acres of desert land they ‘own’ by ‘natural right’ I leave to you.

There is no evidence that there is any formal approval process for this fiasco let alone a requirement for an environment impact statement. I think there is no legal requirement that any project in Egypt identify possible negative impacts on people or the environment and anyone looking around would see this clearly particularly in areas where human concentrations are dense and there is only one water source.

The hidden angle might be the small amounts of Uranium in the sand which could be mined without triggering always unwelcome UN ‘interest’. Nasser 70 years ago wanted a bomb. This local uranium will be a lot more expensive than buying on the open market but when did Egypt do anything on the open market? The Egyptian Nuclear Authority (who let some unknown people break into their reactor during a riot of locals about 6 years ago and steal nuclear material that the worlds greatest police force never found) is also a shareholder. There is competence all around.

Black Sand mining is problematic and the world’s biggest miner BHP stuffed up one sand mine and lost hundreds of millions following which their best engineers and geologists in the world walked away – not BHP’s first or last stuff up. Of course the Armed Forces of Egypt will do better – albeit in an industry they have never been in before.

The sagacity and good business skills of the Armed Forces are clear because these sands don’t vary in price over short periods – they gyrate wildly. I’m sure the Armed Forces know all about international mineral markets spot pricing, hedging and all the other things kids do for work at salaries of $US2 million a year or more. The several thousand Egyptians who manage wheat purchases on the international market have a track record in this area – usually wrong.

They have signed two contracts to help them and are likely to do it Egyptian style. The state/Armed Forces takes a dominant stake on something they know nothing about, they seize the land, they get some experts (never by competitive public tender) in from overseas in a minority position and then screw them for quick dollars. After a while the non-Egyptians leave – with their investments/capital left behind. In mining there are no quick dollars – there are years of investment followed by years of small returns followed by big profits – if you are lucky.

The mentality of the Army is, however, for a quick dollar and their many enterprises feature initial enthusiasm, faltering, partial failure followed by an embarrassing corpse of a business concealed from view. I don't think there is a single business out of their hundreds which passes the giggle test even though established on taxpayers capital, free conscript labor, the 'removal' of competition, free land, free infrastructure/utilities, no taxes and political influence to obtain jobs/contracts.

Centamin the Australian gold miner with the Sukari mine near Marsa Alam has had years of fighting the government’s desire to get one-off huge cash payments before the mine has even made its first profit. They have stuck it out. All mineral resources run out and are subject to price volatility – not that that bothers some who avoid the only long term investment option – investing in their people. I guess an educated Egypt would be hard to govern – for a certain style of government and a ruling class that prefers a particular style – dominance over subservience.

One firm the Army have done a deal with on the Black Sand is Downer of Australia who have been fooling around on this project since 2006 https://mineraltechnologies.com/blog/10 ... ds-company to build a processing plant at Kafr El Sheikh (there are cancer risks but the Government of Egypt will deal with those as it always has in a heavily populated area full of food production and water people drink) and the Chinese Wel(i)yuan Minerals. A couple of things about Chinese miners. They are brutal and careless managers of staff and they don’t care much for the environment or surrounding population. Oh, their overseas companies always include spies who often try to recruit locals – with money. This company knows nothing about mineral sands – its in the lime business and is small. Its probably owned by the Communist Party of China – a government that ruthlessly and remorselessly persecutes its 80 million Muslims and suppresses the practice of their religion (another post based on a recent and very dark story in The Economist). https://www.bloomberg.com/profiles/comp ... ral-co-ltd

The Australian Ambassador in Egypt thinks its miracle mining times ahead. Really. He has no commercial experience and spent a lot of his career running aid programs (not successful) and working in a Canberra office. Unfortunately he is little better than most of our Foreign Service. It’s a good thing no one listens to us.

Unless I’m missing something this project has the hallmark of most Government/Armed Forces projects. No plan, no clear objectives, no cost benefit analysis, no care for Egyptians, a quick buck based on no work, carelessness for the environment and no interest in the important things for Egyptian people – jobs, education and social justice. When did you hear the army talk about education – except the building of private fee paying military secondary schools for the ruling class – built with taxpayer money.

The 20,000 jobs are rot. Mining is capital intensive – Australia has one of the largest mining industries in the world and its total industry employs less than 50,000 and quite a few of these are very high skill blue collar and white collar jobs – in Egypt such staff will come from overseas. The jobs number is as much a lie as the $US176 billion a year. With the oil and gas projects at the moment I would love to know the employment profile – I suspect the Egyptian component except in semi and unskilled areas is close to zero. Its interesting the Government ‘proclaims’ the number of Egyptian jobs in these projects at launch but there is no information on the actual Egyptian jobs delivered when the project is running. I'll leave you to guess why.

I think its true there is nothing after 4 years that provides a jobs future. The building projects like the New Imperial Capital are episodic, low skill/low wage and will be over. Tourism is cyclical/episodic, often in remote locations and low skill/low wage. In both cases the jobs for women are thin. Is there much else on the cards?

Most experts think Egypt has a big future in mining if only because the Army Engineers, the heroes currently building petrol stations and supermarkets, have not done their job and properly mapped the country. So there is a lot to be found. Egypt might have 40,000,000 engineers but no or nearly naught mining skills and no domestic company with any ability. For 70 years there has been an odd policy of deterring prospecting/mining companies - I can't explain that. To move forward the only way is world class miners - not the ones they have in this Black Sand project. World class miners will not like being directed or manipulated and the world's greatest army may prefer minnows or the corrupt because they are easier to 'manage'.


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Re: Black Sand - Egypt Richest Country on Earth.

Post by Dusak »

My friends eldest brother woks for a very large mining project in the desert region of Aswan. The long going enterprise is split 50/50 between an International company and Egypt. Although the Egyptian workers are well paid, with health care and what have you, they are not happy that every month a sum is deducted from their wages towards the purchase of government bonds, they would prefer to have the money instead, but have no choice in the matter. No idea what they mine/quarry, but I have seen photos of the earth moving requirement, they are behemoths, costing many $100,000's each.
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Re: Black Sand - Egypt Richest Country on Earth.

Post by Hafiz »

Interesting and appalling. Thanks.

I wonder whether the 'bonds' are the Suez Canal development bonds (a complete waste of time and money for Egypt but proclaimed the greatest investment in the history of the world by others - and the Army Engineering Corps needs to be paid for its ill conceived and ill planned work - $US9 billion minimum) or the Taya Misr fund the purposes of which are completely unclear except that Diab, of huge corruption fame, is a Board member with the President the 'Chair'. - not electric.

Egyptians pay their taxes - unless they are rich Cairenes in which case they only pay taxes in UK Crown Colonies - so taking money above tax from blue collar workers (for God knows what purpose and with no documentation on what it will be used for) seems very wrong - but I'm sure that those who benefit from it are persons of high integrity - last Egyptian census - 3. If the money is taken in this way my guess its not backed by law and therefore off budget and not subject to independent review/auditing.

It would be interesting to know whether the amount deducted in the example you give was small, moderate or large and whether other workers in other industries were also 'imposed' on. Do they get an interest or dividend on it - I doubt - its a rhetorical question. I wonder whether upper class Cairo executives are also imposed - at of course much higher rates. I doubt it.

Will check out the Aswan mine. Could it be the Centamin gold mine but I think that is north east of Luxor in the Eastern Desert. Will check it - suspect its an army fiasco that I have read about before and laughed out loud.
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