Saudi Arabia has awarded exploration licences in a fourth round of tenders intended to help the Arab world’s largest economy tap its mineral resources as it diversifies its economy away from oil.
Ajlan & Bros and Norin Mining won a licence for the exploration of the Bir Umq site, the Saudi Press Agency reported on Wednesday, quoting the Ministry of Industry and Mineral Resources.
Another was awarded to a consortium comprising Royal Roads and MSB Holding company for the exploration of the Jabal Sahabiya site.
Sumou Holding and the Kuya Silver Consortium won the tender to explore the Umm Hadid site in central Saudi Arabia.
The announcements came during the Future Minerals Forum currently under way in Riyadh.
The licences were awarded “as part of the accelerated exploration programme initiative, which has been designed to effectively leverage the kingdom’s mineral resources in support of the development and growth of the mining sector, in line with the goals of Saudi Vision 2030 and the National Industrial Development and Logistics Programme”, the report said.
Saudi Arabia created a mineral exploration incentive programme with a budget of more than $182 million, Minister of Industry and Mineral Resources Bandar Alkhorayef told the forum on Wednesday.
"This programme will de-risk investments in our exploration, securing to enable new commodities, greenfield projects ... and to drive the … future of exploration sector,” he said.
Overall, deals worth 75 billion Saudi riyals ($20 billion) are expected to be signed during the event, he said.
He also said the government had increased its estimates for untapped mineral resources in the country to $2.5 trillion, from a 2016 forecast of $1.3 trillion.
Mining is a key component of Saudi Arabia’s drive to attract foreign direct investment as laid out in the Vision 2030 plan, which aims to reduce the country's dependence on hydrocarbon revenue.
The kingdom, Opec’s top oil exporter, aims to more than triple the mining sector’s contribution to the nation’s economic output by 2030.
The Bir Umq site, located in the city of Mahd Al-Dhahab in the kingdom's west, covers more than 187 square km of an area rich in copper and zinc mineral deposits while the Jabal Sahabiya site in the south is spread across an area of 283 square km containing zinc, lead and copper ores.
The Umm Hadid mining site covers an area of more than 246 square km rich in deposits of silver, lead, copper and zinc.
Ajlan & Bros and Norin Mining will invest more than 110 million Saudi riyals ($29.33 million) in the exploration of the Bir Umq site.
The Royal Roads and MSB Holding consortium will pump more than 20 million riyals into exploration work at the Jabal Sahabiya site.
The Sumou Holding and Kuya Silver consortium will invest 83 million riyals in the Umm Hadid site.
“Demand for minerals and metals will increase globally about six times by the year 2040 until we get to net-zero targets by 2050,” Yasir Al Rumayyan, governor of the kingdom’s Public Investment Fund, told the forum.
“We saw this opportunity and we decided to leverage resources locally.
“What Ma’aden is doing in the exploration programme is it’s exploring gold, zinc, rare earth [elements] and lithium. Now we have the largest exploration programme in the world and we are very excited about that.”
Ma'aden, which is majority-owned by the PIF, operates several extraction sites in the kingdom and is central to supporting the country's ambitions in the mining industry.
Under its new corporate strategy, Ma'aden aims to achieve a growth of tenfold by 2040 and to move into strategic minerals to drive the expansion of downstream industries in Saudi Arabia.
Last month, it announced the discovery of a “significant gold resource potential” along a 100km stretch from the existing Mansourah Massarah gold mine, boosting kingdom’s potential in the mining sector.
The kingdom also aims to gain access to minerals internationally through Manara Minerals, a joint venture between the PIF and Ma’aden, he said.
“We have already invested in a stake in Brazil's Vale base metals, which will [invest] $25 [billion] to $30 billion in different jurisdictions around the world,” he said.
Last year, Manara signed a binding agreement to acquire a 10 per cent stake in Vale as it pursues global mining investment opportunities.
