Saudi Arabia seeks foreign and local mining firms to join big dig

Reuters/Shelley Christians

• Riyadh has launched licensing pre-qualification for five exploration sites
• Deposits include copper, zinc, lead, silver and gold, says ministry
• Government wants to explore kingdom’s unused reserves of minerals

Saudi Arabia is inviting local and international mining companies to bid for licences on five exploration sites across the kingdom.

The Ministry of Industry and Mineral Resources said on Monday it had launched pre-qualification for the licensing round, as Riyadh steps up the search for foreign investors as well as efforts to explore its reserves of metals vital for the renewable energy sector.

Opportunities worth $32 billion are on offer, according to Khalid Al Mudaifer, vice minister for mining affairs.

The five sites range in size from 76 sq km to 284 sq km, and the deposits include copper, zinc, lead, silver and gold. 

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The ministry said it was planning to complete the licensing round by the third quarter of 2023, describing its approach as a “significant step in the licensing process to make mining opportunities in Saudi Arabia more attractive to investors”.

The success of the two previous licensing rounds represented “proof points” for the mining sector, it added.

Saudi Arabia is offering potential investors incentives as it works to reduce its economic dependence on oil. These include co-funding up to 75 percent of capital expenditure through the Saudi Industrial Development Fund, a five-year royalty holiday for miners and royalty discounts for downstream projects.

The National Centre for Industrial and Mining Information said the ministry had issued 69 new mining-related licences in December, taking the sector total to 2,272.

Last month Luxembourg-based Eurasian Resources Group (Erg) revealed that it would be entering Saudi Arabia with an initial $50 million investment.

The company said there was potential to grow its investment year-on-year, adding that it would prioritise large-scale, early-stage exploration for battery transition minerals in the Ad Dawadimi region.

The Saudi government believes it has unused mineral resources worth about $1.3 trillion, with vast quantities of aluminium, phosphate, gold, copper and uranium.

The British government agreed last month to deepen its collaboration with Saudi Arabia on diversifying sources of critical minerals.

UK officials said the partnership could provide Saudi investment in Britain’s manufacturing and mining finance sectors, as well as new opportunities for UK mining firms to do business in Saudi Arabia.

Saudi Arabian Mining Co, better known as Ma’aden, is the Gulf’s largest miner and plans to increase its capital by 50 percent to nearly SR37 billion ($9.9 billion). The state-owned company’s net profit jumped by 78 percent in 2022 to reach SR9.3 billion, it said on Monday.

It is forming a joint venture with Saudi’s sovereign wealth fund, the Public Investment Fund, to invest in mining assets globally, with an initial focus on iron ore, copper, nickel and lithium.

A recent World Bank report said global demand for minerals such as graphite, lithium and cobalt could increase fivefold by 2050 to meet the growing demand for clean energy technologies.