The Ministry of Industry and Mineral Resources (MIM) has announced the next steps in the process of awarding the license for the largest mining site in KSA. Khnaiguiyah, situated in Al Rayn Terrane, spans 350km2 and is part of the Arabian Shield. The site has a 3D geological model and has already been subject to much exploration work, with over 100,000 meters drilled to date. According to the Saudi Geological Survey, with its estimated 26 million tons of zinc and copper, the site’s geological potential is huge.
Saudi Arabia’s mining sector has an estimated value of $1.3 trillion, and the country has 48 identified minerals, including large quantities of gold, phosphate, and copper. In addition, rare earth metals such as nickel and zinc are also mined in the Kingdom, generally for use in smart devices and computers.
The KSA mining sector is set to receive high levels of foreign investment over the coming decade, and as such, the government has released further concessions for mining and quarrying to private firms. Saudi Arabia’s national mining champion, Ma’aden, is owned by both the government and private shareholders. As is demonstrated by this rapidly growing company’s international joint ventures, the Kingdom welcomes investment from the private sector.
Since Saudi’s latest mining law was passed, more than 1,500 licensing requests have been submitted to the government. KSA aims to receive mining sector investments in the region of $170b by the end of the decade, and with rising demand for the metals required for the energy transition, this appears to be an achievable goal.
Revisions to the Saudi mining investment laws and regulations
The executive regulations of the Mining Investment Law offer many benefits for both the sector and its investors. A permanent committee will decide upon objections filed by government agencies and applications for allocation of the areas of mining complexes, and there are provisions for an Exploitation License and General-Purpose License in place of the Material Collection License. In addition, the export of mineral ores is subject to further regulation, and control procedures will support investors with licenses.
There is an increase in licensing procedure efficiency, with all license procedures being made electronic. There is also a more comprehensive violations and penalties regime, with maximum fines of up to SR1m for law violations, and transparency will be increased by publishing licensing records. Data is to be provided for mineralized sites, and precise decision periods are determined.
KSA has an estimated SR5 trillion in untapped mineral deposits, so revisions were designed to accommodate foreign investors with an interest in the mining sector and the Kingdom’s mineral industry. The revisions support the Vision 2030 reform plans, which aim to boost mining sector contributions to the overall national economy. The revisions were also backed by the Ministry of Energy, Industry and Mineral Resources (MEIMR), which aims to propel the mining sector’s contribution to GDP from $3b to $64b by 2030.
Benefits to KSA mining workers and local communities
The SAR2bn Khnaiguiyah project is predicted to generate 2,000 to 3,000 direct and indirect jobs for mining workers in the region. It will also contribute to the development of neighboring regions and mining projects, employing local people from those regions and boosting numbers of purchases from the local markets.
It will positively impact the development of communication networks in the areas surrounding the project and make a substantial contribution to the development of Saudi’s zinc and downstream copper industries.
The Mining Investment Law revisions demonstrate a healthy, modern approach to the KSA mining sector and are likely to develop more mining and exploration programs. The subsequent licensing processes are also extremely supportive toward potential investors in the sector, having been brought in line with industry standards. As a result, KSA is openly welcoming mining companies and investors to take full advantage of the many opportunities its mining sector is offering.