Arab News, Sunday, Sep 19, 2021 | Safar 12, 1443
Saudi mining law will attract ‘incredible’ private investment to $1.3 trillion sector: Golden Compass CEO
Saudi Arabia:
Saudi Arabia’s new mining law will attract private investment from home and
abroad as the Kingdom looks to exploit an estimated $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 percent loans to investors in a bid to
attract global players into the Kingdom, while the Ministry of Industry and
Mineral Resources is investing $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 $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 percent stake in 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., another US company, has a 25 percent 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.
Canada’s Barrick Gold Corp. has a 50 percent stake with Ma’aden 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 ($26 billion) in 2020
and we are targeting SR176 billion by 2030.”