Saudi Arabia to open $22.7 billion mining project; to increase non-oil GDP by 3%

Saudi Arabia’s King Salman inaugurated last week the Waad Al-Shamaal project, a 440-square-km city for mining industries in the country’s northern region, Al Arabiya TV said, quoting energy minister Khalid al-Falih.

The mining project is expected to boost the kingdom’s gross domestic product by 24 billion riyals ($6.4 billion) and its non-oil GDP by around 3 per cent.

The project will cost 85 billion riyals ($22.7 billion) and create 10,000 jobs, Falih said. It is part of an industrial scheme aimed at opening up Saudi’s north to mining and industrial development that will boost job creation.

Mining is key to the kingdom’s reform plan to diversify its economy away from hydrocarbons, as the government aims to more than triple this sector’s contribution to the nation’s economic output by 2030.The energy ministry estimates the kingdom’s unused mineral resources to be valued at 5 trillion riyals.

Saudi authorities estimate the region holds 500 million tonnes of phosphate ore, around 7 per cent of global proven reserves, mainly in the Al Jalamid and Umm Wu’al areas between Arar and Turaif.

Saudi Arabia’s efforts to build an economy that does not rely on oil and state subsidies involves a shift towards mining vast untapped reserves of bauxite, the main source of aluminium, as well as phosphate, gold, copper and uranium.

Al Arabiya quoted Falih as saying the mining sector will be open to foreign investment after introducing a new law, without giving further details.

Currently Saudi Ma’aden is the kingdom’s sole miner, producing gold and copper and has in recent years expanded into the production of aluminium and phosphates. Saudi kingdom’s Public Investment Fund owns 65 per cent in Ma’aden. .

Ma’aden, which is also the Gulf’s largest miner, was developing its third project to manufacture phosphate fertilisers at its Waad al-Shamal facility at an estimated cost of 24 billion riyals.

Saudi Kingdom-owned oil company, Aramco said that the state oil giant had invested more than 10 billion riyals in developing the first system in the kingdom for producing and supplying unconventional gas.

Such investment is aimed at providing sufficient energy at competitive prices to develop the Waad Al-Shamaal mining project, a statement released by Aramco said.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

Leave a Reply

Your email address will not be published. Required fields are marked *