RIYADH: When Saudi Arabia’s Crown Prince Mohammed bin Salman announced the Kingdom’s Vision 2030 plan in 2016, skeptics were doubtful about how a nation which has been dependent on oil for several decades could diversify its economy successfully.
And now, seven years on, the Kingdom has successfully ventured into a new realm of opportunities, with the mining sector in particular proving to be one of the Kingdom’s growing hubs.
In this spirit, The Future Minerals Forum — which concluded in Riyadh on Jan. 12 — showcased the Kingdom’s ambitions in the mining sector and the way in which the mineral exploration industry is shaping up to become the third pillar of the country’s economy.
Ministers, industry experts, and think tanks representatives gathered to address ways to tackle challenges in the sector, including the crucial sustainability factor.
International participation to bring more investments to Saudi Arabia
The participation of over 200 speakers from various parts of the globe indicated that the Kingdom is moving in the right direction, especially after a new mining law improved the business environment in Saudi Arabia, along with the easing of the mining licensing procedure.
Paul Sullivan, lecturer at Johns Hopkins University and a senior associate fellow at King Faisal Center for Research and Islamic Studies Energy and Environmental Security, told Arab News that the completion of the Forum with unprecedented international participation is expected to boost investments in the Kingdom’s mining sector.
“The Future Minerals Forum could act as a catalyst for greater investment in mining in Saudi Arabia. Hopefully, it could act to help create more effective legal and regulatory structures within Saudi Arabia also. But such things take time. Saudi Arabia has lots of potential for mining,” said Sullivan.
On Jan. 11, the second day of the Forum, Saudi Arabia’s Minister of Investment Khalid Al-Falih talked about how Saudi Arabia is becoming the perfect destination for companies to come and operate in the mining sector.
“Saudi Arabia has brought together all of the necessary enablers in the mining sector. We have the energy solution, we have the location, we have the financing, and we have the best-in-class regulations across the world,” said Al-Falih.
As if to underline the growing international reach of the Kingdom’s mining ambitions, the FMF saw Saudi Arabian Mining Co., known as Ma’aden, sign an agreement with Saudi Arabia’s Public Investment Fund to invest in mining globally.
The mining firm — the largest in the Gulf region — also announced it has inked a deal to acquire a 9.9 percent stake in American minerals exploration and development firm Ivanhoe Electric and form a separate joint venture with Ivanhoe to explore and develop mining projects in Saudi Arabia.
Ma’aden signed another partnership agreement with Barrick Gold Limited, a subsidiary of Canada’s Barrick Gold Corp. Under the deal, a new limited liability company will be set up in Umm Ad Damar to accelerate mineral exploration activities in the Kingdom.
Sustainability in the mining sector
While critical minerals are necessary for a smooth transition to green energy, there are concerns about the environmental impact of mining.
“Saudi Arabia can become more sustainable and cleaner in many things, not just mining. Environmental and sustainability laws and regulations are important. Companies and mining will be sources of great externalities, such as pollution of the water, land, and air, without such regulations,” Sullivan told Arab News.
He added: “Saudi Arabia could benefit most from a successful and growing mining industry that minimizes externalities like pollution. It is good PR and it is good for Saudi Arabia’s people and their futures.”
Sullivan further noted that mining laws and regulations should be implemented in such a way that they will uphold the interests of the general public.
“There are some complex balances that need to be considered. Writing regulations and laws should also reflect the needs of the Saudi people, its leadership, and for the Saudis of the future, but also of the companies to allow sustainable, long-term, and effective mining to add to the future wealth of Saudi Arabia,” Sullivan added.
The Future Minerals Forum — which concluded in Riyadh on Jan. 12 — showcased the Kingdom’s ambitions in the mining sector and the way in which the mineral exploration industry is shaping up to become the third pillar of the country’s economy.
In the Forum, industry leaders and top officials discussed the importance of sustainability, and Mike Henry, CEO of Australia-based mining firm BHP, said exploration of critical minerals should be accelerated to meet the energy transition goals over the next thirty years, as it is impossible to meet the rising demand if the world is moving at the current pace.
“Over the next 30 years, in order to meet the needs of the energy transition, the world is going to need two times as much copper, four times as much nickel, two times as much steel and two times as much iron ore, as was needed over the past 30 years,” he added.
In a separate panel discussion, Suliman Al-Mazroua, CEO of Saudi Arabia’s National Industrial Development and Logistics Program, said the Kingdom is not only trying to accelerate mining operations to catalyze energy transition but is also working on innovative practices to ensure sustainable operations in the mining sector.
“Saudi Arabia is on both sides; supply and demand. We contribute on the innovation side to achieve sustainability, and we also provide the world with more metals,” said Al-Mazroua.
Moving forward and beyond
The forum also witnessed knowledge sharing of innovative ideas which could reshape the way in which the mining industry is functioning.
In a panel discussion, Saline Water Conversion Corp. Governor Abdullah Ibrahim Al-Abdul-Karim said the mining industry will need to have a different structure moving forward as the world is witnessing rapid changes in an era of energy transition, digitalization and climate change.
Al-Abdul-Karim also noted that new mining companies will be able to find abundant resources from seawater if they have “the science, the reengineering and the economy-based structure” in place.
“By figuring out how we can extract precious salts and minerals from brine water, we will be able to secure the demand for the future,” he added.
As Saudi Arabia’s mining sector continues its accelerated growth, those involved in pushing it forward will be keen to show that speed will not come at the cost of sustainability.