JEDDAH, 3 April — Minister of Petroleum and Mineral Resources Ali Al-Naimi has announced that Saudi Arabia is finalizing a new mining strategy that will facilitate the work of private investors to enable them to explore and utilize the country’s mineral resources while at the same time securing new income sources and creating more jobs for Saudis.
A new mining law is being drafted as part of a broader government strategy to encourage private investments in the mining sector by attracting more local and international investors. It will be introduced before the end of the year, to give a boost to the country’s investment drive.
“We are now in the final phase of preparing the new strategy, which has been subjected to extensive studies over the past months. Just two days ago we had a meeting at the ministry headquarters in Riyadh, where the plan was reviewed with the consultancy firm hired for this purpose. It involves the ministry, the deputy ministry for mineral resources, the state-owned mining company Ma’aden and the Saudi Geological Survey (SGS). The new mining law is in its final stages and we expect it to be formally issued before the end of the year,” Al-Naimi said.
The minister was talking after chairing a meeting of SGS board of directors, which he heads, in Jeddah on Sunday. The meeting discussed SGS’ budget for the year 2001/2002 and its achievements during the previous year.
Following the meeting, Al-Naimi received ISO 9001-2002 certificate awarded to SGS by United Register of Systems (URS). This achievement made SGS the first government agency to receive the certificate in recognition of its quality system.
Al-Naimi said the objective of the new mining law is to facilitate opportunities for local as well as foreign investors utilizing the country’s mineral resources, tap new sources of income and secure employment for as many Saudi citizens as possible in the mining sector.
Among the minerals being advertised for investment are phosphate (213 million tons), iron ore (84 million tons), bauxite (173 million tons), and copper-zinc (18.8 million tons).
As for gold — of which the Kingdom produces about seven tons annually from two mines, Mahd adh Dhahab and Sukhaybarat — plans are under way to increase production by developing new sites, according to Dr. Abdullah E. Dabbagh, Ma’aden president and CEO.
Ma’aden has been granted a 30-year concession to mine gold and silver in the Hajar area, where deposits are estimated to be 4.2 million tons, with a concentration of 2.6 grams per ton.
Saudi Arabia is contemplating building a SR10 billion ($2.7 billion) railway line linking the country’s eastern coast with the Red Sea in the west. A final decision on the project, which Minister of Communications Dr. Nasser Al-Salloum said has been found to be feasible, is expected later in the year.
The railway is vital for the development of phosphate mines in the northern parts of the country, where deposits are said to be around 7.8 billion tons. If implemented, the project is expected to boost overall cargo shipments by 19.5 percent to around 30 million tons and transport more than 20 million passengers annually.
One Saudi company, LAM, has said it has already entered into agreements with four companies from Canada, Germany, Austria and China over the railway project. ALM General Manager Saleh Mutabbakani said his firm has negotiated a financing mechanism with a Bahrain-based banking consortium to secure money for the project.
