For Free Headlines Submit Your Email
Tuesday, April 23, 2024 13:29 GMT
Saudi Arabia’s new mining law will attract private investment from home and abroad as the Kingdom of Saudi Arabia (KSA) looks to exploit an estimated US$1.3 trillion of potential value in the sector, according to Meshary Al-Ali, founder and CEO of mining consultancy Golden Compass. In January, the Kingdom moved to capitalize on the vast wealth hidden below ground in Saudi Arabia with the establishment of a mining fund and support for geological surveys and exploration program activities. The Saudi Industrial Development Fund is also offering 60 % loans to investors in a bid to attract global players into the Kingdom, while the Ministry of Industry and Mineral Resources is investing US$3.7 billion in the sector. The deputy minister of Industry and Mineral Resources Khaled Al-Mudaifer talked up the potential riches beneath the Kingdom’s soil last month, telling CNBC that studies have estimated US$1.3 trillion in reserves of phosphates, gold, copper, zinc, nickel, rare earth metals and other minerals. Speaking to Arab News, Al-Ali was confident the Kingdom’s enthusiasm for the sector would attract worldwide attention.“It’s a very flexible and very transparent system, and it’s one of the most powerful in mining around the world,” Al-Ali said. “The system is new and it can encourage investors to come to Saudi Arabia.” Under Vision 2030, mining is the third pillar of Saudi Arabia’s economic development, after energy and petrochemicals, as it aims to diversify the country’s economy away from dependency on oil. The Saudi Geological Survey has announced 54 locations for exploration, with more to be revealed in the coming months that will be auctioned to investors. The National Geological Database is being created to allow investors to find the locations of mineral deposits in a bid to increase the transparency and competitiveness of the sector in Saudi Arabia. The Kingdom has already attracted major international investors, including US firm Alcoa Corp., which has a 25.1 % stake in Maaden Bauxite and Alumina Co., and Maaden Aluminum Co., as part of US$10.8 billion joint venture with Saudi miner Maaden, located in Ras Al-Khair Industrial City in the eastern province.Fertilizer producer The Mosaic Co., another US company, has a 25 % stake in the US$8 billion Maaden Wa’ad Al-Shamal Fertilizer Production Complex located in Wa’ad Al-Shamal Minerals Industrial City in the northern province of Saud Arabia. Canada’s Barrick Gold Corp. has a 50 % stake with Maaden in the Jabal Sayid underground copper mine and plant. “The private sector contribution will be incredible within the next couple of years,” said Al-Ali. The mining sector is expected to create thousands of jobs in the Kingdom in the coming years with the goal of 256,000 geologists, engineers and others by 2030, he said. “The ambitions will be reflected in a doubling of the sector’s contribution to GDP,” said Al-Ali. “The income for the mining sector was above SR96 billion (~US$25.6 billion) in 2020 and we are targeting SR176 billion (~US$47 billion) by 2030.”