The Prime Minister witnesses the signing of a contract for the exploitation and operation of a thermal arc furnace to produce silico manganese alloys between "Kima" companies affiliated with the Ministry of the Public Business Sector and "Al-Sharq" for Investment
Dr. Mostafa Madbouly, Prime Minister, witnessed, at the Cabinet headquarters in the New Administrative Capital, the signing ceremony of the contract for the exploitation and operation of a thermal arc furnace to produce silico manganese alloys, between the Egyptian Chemical Industries Company "Kima" affiliated with the Holding Company for Chemical Industries, one of the companies of the Ministry of the Public Business Sector, and "Al-Sharq" Real Investment Company, an Egyptian company with Saudi investments, in the presence of Eng. Mohamed Shimi, Minister of the Public Business Sector.
The contract was signed by Eng. Abdel Majeed Mohamed Hegazy, Executive Managing Director of "Kima", and Mr. Ahmed bin Taha Al-Sharif, Member of the Board of Directors of "Al-Sharq".
Eng. Mohamed Shimi explained that the contract aims to assign the operation of the furnace owned by "Kima", which was rehabilitated, to "Al-Sharq" Company; The latter obtained the manganese ore concession in the Abu Shaar area, and prepared the necessary studies and research through a team of experts and technicians affiliated with it to study the exploitation of the ore and achieve added value using the latest technologies and scientific methods, in addition to conducting all laboratory and practical experiments to obtain the silico manganese alloy according to international specifications, which is mainly used in the iron and steel industry.
The Minister of the Public Business Sector confirmed that the contract comes within the framework of the work strategy to exploit assets, maximize their returns, and increase production and operation rates, and it is also an important step in developing the mining and manufacturing industries, as it contributes to achieving added value for local ore and replacing imports of silico manganese alloys used in the iron and steel industry, explaining that the furnace was rehabilitated with the assistance of the Egyptian Iron Alloys Company affiliated to the Ministry of the Public Business Sector after it had been stopped for 5 years, at a total cost of 53 million pounds, indicating that this cooperation also represents a model for partnership between the public and private sectors, and emphasizes the role played by public business sector companies in driving the wheel of economic development.
He added that under the signed contract, KIMA agrees to pledge to Sharq to exploit, operate and maintain the furnace it owns and sell silico manganese alloys according to international specifications. Sharq undertakes to pay KIMA $75 for each ton produced, in addition to 30% of the value of the by-products resulting from the silico manganese production process. This comes in light of Sharq’s possession of the necessary technical, administrative and financial expertise and capabilities to operate and exploit the aforementioned furnace to produce silico manganese alloys using its locally owned manganese ore.
The minister pointed out that the targeted production volume, according to the contract, is 18,000 tons annually with a total expected revenue of $1.4 million for KIMA, in addition to an expected revenue from by-products of approximately $400,000 annually, bringing the total expected annual revenue for KIMA to $1.8 million. Sharq is also committed to paying a guaranteed minimum of $600,000 annually to KIMA.
Eng. Mohamed Shimi noted that, in addition to the above, Al Sharq Company is committed to using and maintaining the furnace throughout the contract period, and is committed to performing all periodic and necessary maintenance required to maintain the safety of the furnace and operate at the same operating efficiency rate, as well as making the necessary improvements and applying industrial, health and environmental safety standards in the operation of the furnace, including the method of waste disposal.
The term of this contract is seven years starting from the date of final receipt of the furnace, and is renewed for similar periods under a new agreement between the two parties six months before the end of the current contract.