Out in the bleak desert east of this mud-walled oasis village, where the wind blows the brown sand in drifts across the empty road, Fikri Morsi is building a little empire.

It is an empire of iron -- 236 million tons of high-grade ore already discovered, and more certainly to come. Morsi, a mining engineer for the government-owned iron and steel company, is in charge of digging it out and shipping it to the steel mill near Cairo, 200 miles northeast.

The Egyptian government's long-range development policy is to put the desert to use -- to lure people out of the overcrowded Nile Valley into the desert through land reclamation, irrigation, oil exploration and extraction of minerals. This is one of the few places where it is actually happening.

When Morsi first came to the Western Desert in 1962, the forbidding plateaus surrounding the villages of the Bahariya Oasis were utterly empty and only a few camel tracks linked the oasis to the outside world.

The region is still remote, but now there is a railhead and a good road runs all the way from Cairo to the enormous open pit where scrapers and bulldozers extract the ore. Russian dump trucks haul 54 tons a minute to a crushing plant where the ore is pulverized for shipment.

Almost 3,000 people live in a little company town, lured to Egypt's equivalent of Sibera by good wages and free housing.They found water at 2,000 feet and their vegetable patches and rose gardens are spreading out into the desert protected from the wind by new stands of evergreens.

Powered by electricity from the Aswan High Dam and equipped with a school, a theater and a library, the workers' town provides amenities beyound the dreams of inhabitants of the nearby oasis villages.

Morsi, who combines the roles of pit boss, mayor and civic booster as the steel company's "chief of Bahariya sector," says the difference between the miners' town and the oasis villages is "about 5,000 years." Staff turnover among the 823 workers, he said, is down to about 20 percent a year, despite the inhospitable desert surroundings, because "we have learned that it's easy to build a plant but you have to keep the workers happy."

According to Morsi, Egyptian geologists identified the Bahariya Oasis as a potential iron range in 1962. He and other engineers, chemists and geologists set up a camp to explore the area's potential and quickly determined that there was more iron of better quality here than in the small deposits Egypt was then working near Aswan.

The problem was getting out.

It took until 1970 for the government to complete the road from Cairo, a road that even now does not appear on most Egyptian maps. Construction of the crushing plant, an office building and the workers' town began when the road was finished and the first load of ore was shipped in 1972, when the single-track railroad parallel to the road reached the mine.

At one time 65 Soviet technicians worked on the project, Morsi said, but the last two are set to leave when their contracts expire next month.

The ore is high-quality and easy to extract, a welcome addition to Egypt's meager stock of natural resources and a partial compensation for the oil that the Western Desert stubbornly refuses to produce.

The field here is not major on the world scale -- the United States has 17 billion tons of reserves, Canada 36 billion -- but it is enough to feed a major expansion of the Soviet-built steel mill at Helwan, near Cairo. Geological explorations also have confirmed other large deposits of ore scattered around the Western Desert.

Morsi, who looks younger than his 50 years, bears little resemblance to the desk-bound, business-suited Egyptian engineers often criticized by Western technicians. He roars around the mine area in a jeep, wearing a dusty hard hat and a khaki field jacket.

"Production of iron ore is simple." Morsi said, snapping off a string bean in the garden. "This is much more important. Food is our great need."

On land where no shrub grew 10 years ago, the miners are now producing peas, beans, carrots, cabbage, apricots and grapes.