MINING

NEW LICENSES UNDERSCORE SAUDI MINING INDUSTRY’S APPEAL 

The Ministry of Industry and Mineral Resources issued 71 new mining licenses in July, encompassing various categories, including 45 exploration permits, 21 for quarrying building materials, and five for small-scale mining and exploitation activities, according to the latest ministry report.

The overall count of active mining licenses within the sector reached a total of 2,348 as of the end of July 2023. Building materials quarry licenses accounted for the lion’s share of permits issued with 1,453, followed by 651 exploration licenses, 182 licenses for small-scale mining and exploitation, 37 reconnaissance licenses, and 25 licenses for excess mineral ores.

The highest concentration of licenses was allocated to projects situated in the Riyadh province, totalling 610, followed by 384 in the Makkah region, 380 in the eastern region, 265 in the Madinah region, and 191 in the Asir region. Other regions that were granted licenses included Tabuk with 150, Qassim with 84, Jazan with 75, Hail with 59, Najran also with 59, Al-Baha region with 37, the Northern Borders with 28, and Al-Jouf with 26.

To build out the sector, the ministry recently unveiled ambitious plans to attract more than USD 25 billion in investments within the machinery and equipment sector across 50 investment opportunities.

The National Industry Strategy (NIS), a strategic roadmap aimed at expanding the kingdom's industrial and mining base, aims to reduce imports by up to 50% while striving to export products to regional and global markets. Notably, during 2021 and 2022, significant progress has already been made with the realisation of three casting and forging projects, crucial components of the machinery and equipment sector, with investments exceeding USD 1 billion.

   

SUSTAINABILITY IN MINING

The ministry also unveiled the allocation of eight mining competitiveness complexes in Riyadh and Eastern regions as part of a plan to promote "good governance" in the sector, aiming to improve integrity, attract investment, and foster local community development.

The complexes designated for competitiveness include Ghounan, Al-Misnah, Al-Samman, Ras Al-Qaryah, as well as the eastern and western Salwa complexes in the Eastern Region. Additionally, two other complexes will be established in the Al-Armah and Hofayrat Nesaah, Riyadh Region.

Other key priorities for the ministry include ensuring the sustainability of the mining sector, instilling investor confidence, safeguarding natural resources and the environment against illegal practices, and encouraging local communities to actively contribute to the growth of the mining sector.

The ministry also selected Saudi mining giant Ma’adan as the preferred bidder for the Muhaddad and Ar Ridaniyah exploration licenses following two separate bidding processes for each site, as part of the ministry’s accelerated exploration initiative, designed to unlock the kingdom's vast mineral wealth as part of Vision 2030.

The company had committed to investing SAR 15 million (USD 4 million) in community initiatives benefiting citizens in both areas, with SAR 7.5 million equally allocated to each site.

The licenses cover two key exploration areas: Muhaddad, located in the Asir region, has deposits of copper, zinc, gold and lead ores. Ar Ridaniyah, located in the Riyadh region, is known for its zinc and silver deposits.

Exploration licenses will be issued in accordance with the new Mining Investment Law, which requires all companies applying for various mining licenses to present their technical competence and work programme, and demonstrate their commitment to proper environmental, social and governance practices.

FUTURE PLANS

The ministry plans to have additional licensing rounds in the near future, as it aims to encourage and enable new investors and miners to participate in these licensing rounds. It works fairly and transparently to ensure that the best bidder is selected to carry out the exploration programme, and has a number of initiatives aimed at maximising and diversifying the sector’s economic impact, while developing the mineral industries.

Further consolidation should also help boost the mining sector. The Public Investment Fund (PIF) recently completed 100% shareholding in the Saudi Iron & Steel Company (Hadeed) from the Saudi Basic Industries Corporation (SABIC). In a mutually beneficial arrangement, Hadeed will, in turn, secure a 100% shareholding in AlRajhi Steel Industries Company (Rajhi Steel) from Mohammed Abdulaziz AlRajhi & Sons Investment Company (Rajhi Invest) by issuing new shares in Hadeed.

The transactions align with PIF's mission to expedite the industrial development of Saudi Arabia, meet the surging domestic demand for steel, and enhance the country’s steel production. The transactions will enable Hadeed and Rajhi Steel to leverage their world-class steel plants and collaborate in improving production and operational effciency.