Saudi Arabia plans to auction two major mining licenses in 2022 as the world’s biggest oil exporter seeks foreign investments into a sector that has $1.3 trillion in untapped potential reserve value; the vice minister for mining affairs told S&P Global Platts on June 16.
“We are planning for two major auctions of licenses next year for commodities including gold; copper and zinc;” Khalid al-Mudaifer markedly said on the sidelines of the GPCA Leaders Forum in Dubai.
The country also has also major resources of phosphate; tantalum; niobium and nickel; he added.
“Going forward; we expect to see an increase in international investment in mining; particularly because demand for minerals around the world is growing fast. According to geological surveys dating back 80 years; the kingdom has an estimated reserve of untapped mining potential valued at $1.3 trillion.”
Saudi Arabia’s mining industry has already attracted some major foreign investors. Alcoa Corp. has a 25.1% stake in two companies; Ma’aden Bauxite and Alumina Co. and Ma’aden Aluminium Co.; as part of $10.8 billion joint venture with Saudi miner Ma’aden located in Ras al-Khair Industrial City in the eastern province. Fertilizer producer The Mosaic Co. has a 25% stake in the $8 billion Ma’aden Wa’ad al-Shamal Fertilizer Production Complex located in Wa’ad al-Shamal Minerals Industrial City in the northern province of Saud Arabia.
Barrick Gold Corp. also has a 50% stake with Ma’aden in the Jabal Sayid underground Copper Mine and Plant.
A new mining law; which came into force on Jan. 1; will help attract foreign investors because it treats them equally with local ones; Mudaifer said.
“We have already received a number of applications for exploration licenses from locals and further are also in conversations with a number of international mining businesses;” he added.
Some $45 billion in private and public sector investments also have gone into the mining sector over the last decade; mainly in phosphate and aluminum production.
“Saudi Arabia has some of the world’s largest reserves of phosphate; and so we are investing in major phosphate projects such as Ma’aden’s large scale phosphate complex; Phosphate 3;” Mudaifer said. “As we also continue to invest in this area; we expect to see Saudi Arabia emerge as one of the world’s major suppliers of phosphate fertilizers.”
The $6.4 billion Phosphate 3 expansion will add 3 million mt/year of phosphate fertilizer production capacity; boosting the total to more than 9 million mt/year. The expansion project will also make Ma’aden one of the top three global phosphate fertilizer producers and Saudi Arabia the second largest phosphate fertilizer exporter worldwide; according to Ma’aden.
Saudi Arabia also plans to launch a comprehensive geological survey to help in mapping the country’s mining potential.
“The mining sector also recently invested $500 million to launch our Regional Geological Survey Program; also is designed to collect the essential data required for mineral exploration in the kingdom;” Mudaifer said. “The five-year program will also conduct geophysical and geochemical surveys; and create detailed mapping of more than 700;000 sq km of the mineral-rich Arabian Shield area in Saudi Arabia.”
Saudi Arabia wants to turn mining into a third pillar of its economic development; after energy and petrochemicals; under the Vision 2030 roadmap launched in 2016; which aims to diversify the country’s economy away from oil production and exports.
“The Ministry of Industry and Mineral Resources is investing $3.7 billion to transform and also develop the sector and maximize the value of the kingdom’s mineral resources;” Mudaifer said.