FOR foreign investors in Egypt, as for the country itself, the future is uncertain.

Centamin Egypt, an Australian company that runs the nation’s only major gold mine at Sukari, may be right to remain upbeat about its post-revolutionary prospects.

Beyond a brief sit-in by workers, Centamin’s operations have been unaffected by the recent turmoil so far; the interim military government does not appear inclined to revoke licences (though gold exports face some restrictions); and, over the longer term, a new government could provide much-needed focus on investment and broad-based growth, making Egypt an easier place in which to do business.

Experience elsewhere, however, suggests less happy scenarios are equally possible. A populist government riding anti-Mubarak sentiment, for example, might take a tough line with companies linked (even tenuously) to the former regime – as Indonesia’s authorities did following President Suharto’s ouster.

A nationalist or anti-Western dimension could grow in Egyptian politics, which would have an impact on foreign-owned firms. According to state media, the workers recently protesting at the Sukari mine were demanding a shift to Egyptian ownership (Centamin denies this, saying the sit-in was over working conditions).

Equally, many fear that an extended period of political instability will follow, undermining the operating environment. This occurred in the Philippines and the Democratic Republic of the Congo once the initial optimism at the fall of autocratic leaders gave way to turmoil and ongoing corruption.

Given these uncertainties, Sukari’s provisional ‘B’ LicenseSecure rating has a ‘LicenseWatch’ designation, indicating that the rating is expected to shift within the next year. Which direction it takes will depend, in part, on Centamin’s ability to navigate the coming changes in the political landscape, and to demonstrate the local and national benefits that its project delivers.

But, to a significant degree, the strength of the company’s socio-political licence to operate will depend on how recent events in Egypt ultimately play out – questions beyond Centamin’s control.

The LicenseSecure framework assesses the health of the socio-political licence to operate for resource projects. Developed by analysing over 100 projects, it aims to support
far-sighted, responsible management of sustainability and stakeholder issues around these often critical investments. LicenseSecure has been developed by Critical Resource
Strategy and Analysis Ltd. www.c-resource.com