Demand for Saudi mining licences rises sharply

Eurasian Resources Group

• 259 exploration permits last year
• $182m package of incentives
• Investment law in force since 2021

Incentives and legislation are fuelling growth in Saudi Arabia’s mining industry as the government seeks to stimulate investment under Vision 2030.

The Ministry of Industry and Mineral Resources said demand for Saudi mining licences had surged since a mining investment law came into force in 2021.

The number of building material quarry licences jumped to 538 in 2023, amore than threefold leap since the law was passed. Exploration permits rose to 259 from 58, a more than fourfold rise.

---

---

The ministry said the number of exploitation licences, which are issued as an extension to an exploration licence, had more than doubled from eight before the legislation to 19 in 2023. 

This week the industry and investment ministries officially launched a mineral exploration incentives package, valued at about $182 million. The programme, first announced in January, aims to encourage investment from domestic and international mining operators.

One such company is Luxembourg’s Eurasian Resources Group, which entered Saudi Arabia last year with an initial investment of $50 million.

Its CEO, Benedikt Sobotka, told AGBI: “As part of its commitment to diversification, Saudi Arabia has made considerable headway towards further legal and regulatory reform.”

• Saudi energy minister: There’s more to us than oil
• Mars rover tech digs into Saudi mineral potential
• Saudi hunts for critical minerals in energy transition

The incentives package will support companies that have held valid exploration licences for less than five years, each being eligible for support of up to SAR7.5 million ($2 million). Companies can obtain support for up to 15 Saudi mining licences.

The government says its untapped mineral wealth is estimated at $2.5 trillion, based on exploration of 30 percent of the country’s mineral region. 

But the kingdom is still a small player in global metals and mining. Leading producers include Australia, Chile, China, Russia, Canada, Brazil, the Democratic Republic of Congo, South Africa and the United States, the mining database Crux Investor shows. 

Riyadh has also launched an accelerated exploration programme, which aims to reduce the time required to obtain approvals for licences.

Ionut Lazar, principal consultant at the metals, mining and fertiliser consultancy CRU Group, said Saudi Arabia had explicitly made mining a pillar of Vision 2030, with the Public Investment Fund financing expansion through Saudi Arabian Mining Co, better known as Ma’aden.

He said that the country had “committed serious funds and human resources” to mining as a way to balance the economy away from oil and gas.