With an estimated potential value of $1.3 trillion, Saudi Arabia’s mining sector is set for significant foreign direct investment over the next decade, Arab News reported on Wednesday.
A total of 48 minerals have so far been identified in the Kingdom. Gold, copper and phosphate are currently mined in large quantities, while other deposits include zinc, nickel and rare earth metals, used in the manufacture of computers and smart devices.
Saudi Arabia’s commitment to private sector involvement in the mining sector can be seen in several international joint ventures struck by Ma’aden, the mining company owned by the government and private shareholders.
In a 2009 deal, Pittsburg-based Alcoa (the world’s sixth-largest producer of aluminium, with 2020 global revenue of $9.3 billion) took a 25.1 per cent stake in Ma’aden Bauxite and Alumina Co., and Ma’aden Aluminium Co., as part of a $10.8 billion joint venture.
The project includes a bauxite mine situated in central Saudi Arabia, connected by rail to a refining facility on the Kingdom’s Gulf coast with a capacity of 740,000 tonnes of aluminum per year.
Then in 2013, The Mosaic Company (a leading US supplier of phosphate and potash for fertiliser and animal feed, with 2020 revenue of $8.68 billion) took a 25 per cent stake in the $8 billion Ma’aden Wa’ad Al-Shamal Fertilizer Production Complex, located in the Kingdom’s northern province.
Saudi Basic Industries Corporation, or SABIC, also took a 15 per cent stake in this business. The move created one of the largest integrated phosphate production facilities in the world.
And in 2014, Canada’s Barrick Gold Corp. (which mines gold and copper in 13 countries, with a turnover of $12.6 billion in 2020) invested $210 million for a 50 per cent share of the Ma’aden Barrick Copper Company. The resulting Jabal Sayid copper mine and plant, located some 120 km southeast of Medina, has a production capacity of 45,000 to 60,000 tonnes of copper per year.
Since the Kingdom’s new mining law was passed in June 2020, which accelerates foreign investment in the sector by financing exploration and geological surveys, the Saudi government has received over 1,500 licencing requests by international mining operators.
The government said that approval times for operators have now been cut down to a matter of months as opposed to the years previously required.
Saudi Arabia’s mining affairs vice minister Khaled Al-Mudaifer at the Ministry of Industry and Mineral Resources has said the current SR170 billion to 180 billion ($45.3 billion to $47.96 billion) of mining investments in the Kingdom is expected to jump by 150 per cent in the next decade
