MINING

Saudi Arabia has made great strides in creating a business-friendly environment to ensure its mining sector can compete in the arena.

The kingdom wants the sector to attract as much as USD 170 billion in investment by the end of decade, as demand soars for many metals crucial to energy transition.

“That’s a lot of money,” the Saudi mining minister, Bandar Alkhorayef, said in an interview with the media, on the sidelines of the Future Minerals Summit held in Riyadh in January. Minerals are “becoming more and more essential for the advancement of manufacturing, energy” and industries including the automotive sector.

The mining sector now contributes USD 70 billion to the kingdom’s economy and the government has plans to triple it by 2030, according to Khalid bin Abdulaziz Al-Falih, the country’s minister of investment. 

The volume of investments currently stands at 70 private opportunities in the mining and mineral sector, exceeding USD 25 billion while the value of mineral resources in the kingdom has been valued at USD 1.3 trillion, the minister added.
  

PRIORITY SECTOR

Development of the mining sector “is among top priorities and due to the fact that the sector is the third biggest pillar for industries to diversify economic resources of the Kingdom of Saudi Arabia, in addition to holding several bilateral meetings with the aim of providing investors the opportunity to get acquainted with the available investments and partnerships, as well as the services and incentives it offers to investors,” the minister said.

The kingdom is working on more than 38 initiatives and reforms to achieve its ambitions for the sector by 2030

A cornerstone of that policy was the approval of a new mining law in 2020 aimed at accelerating foreign investment in the sector. The reforms also dovetail with the National Industrial Development & Logistics Program (NIDLP), which envisions to leverage the country’s transportation infrastructure to develop the manufacturing, metals, and other industries. 

As part of that effort, the government will develop an online National Geological Database as a central repository of the kingdom’s geological, geochemical, geophysical, topographic, and geographic information.

“The intention of the database is to incentivise exploration by providing investors with easy to access information on potential deposits and reserves. The NIDLP anticipates that the development of the database will be one of the world’s largest pre-competitive geosciences programmes,” according to Baker McKenzie, a management consultancy.

 

MINING FOR GOLD

Saudi Arabian Mining Company, or Ma’aden, one of the region’s largest mining companies, is also boosting its production. In June 2021, the company awarded a USD 880 million mining services contract to Jac Rijk Al-Rushaid, a leader in the kingdom’s local mining infrastructure industry.

The agreement is part of Ma’aden’s largest gold project to date.  

Jac Rijk Al-Rushaid will undertake drilling, scaling, loading, hauling, re-handling, ore control, dewatering, crusher feed, and all gold mining-related activities at the Mansourah and Massarah sites.

Full production capacity at Mansourah and Massarah is expected by 2023, ramping up gold production targets to 250,000 ounces per year before 2025. The gold mines are integral for Ma’aden to reach its company-wide annual production target of 1 million ounces of gold before 2025.

Ma’aden also completed utilities commissioning at its USD 900 million ammonia plant in Ras Al Khair Industrial City.

It is the first project within Ma’aden’s USD 6.4 billion expansion project, ‘Phosphate 3’, the company’s third large-scale phosphate complex. Upon its completion, Phosphate 3 will increase production capacity to 9 million tonnes, establishing Ma’aden as one of the largest phosphate fertiliser producers in the world.

Meanwhile, the Saudi Authority for Industrial Cities and Technology Zones (Modon) estimates that the number of mineral product at its industrial cities has surged over the past year.

“Modon, as per initiatives tasked with it under the National Industrial and Logistics Program (NIDLP), contributes to enhancing the role of the mining and mineral industries sector in the national economy, for it being the third pillar for developing the Saudi industry, in accordance with the Saudi Vision goals, especially since it has succeeded in increasing factories of mineral products to more than 1,290 by the end of 2020,” Modon CEO Eng. Khalid Al-Salem said.

The mining sector should gain traction as the kingdom accelerates its decarbonisation drive and will require more “green” metals, such as copper, aluminium and zinc, to build a more sustainable
economy.