Saudi Arabia approved a new mining law to attract more local and foreign investments in the mining sector and to diversify its economy away from oil.
A new mining fund will facilitate continuous financing for the sector and support geological and exploration activities, a statement carried by the Saudi Press Agency quoting the minister of mining and industry, Bandar Alkhorayef, said.
Mineral resources in the Arab world’s biggest economy are estimated to be in the range of 5 trillion riyals (Dh4.89tn) with 20 million ounces of gold reserves below ground, according to Invest Saudi. The kingdom currently accounts for a sizeable 37.9 per cent of the Middle East and Africa’s 60 billion riyals metals and mining industry market.
Saudi Arabia is aiming to increase the mining sector’s contribution to its gross domestic product by more than 240bn riyals and reduce imports by 37bn riyals by 2030, Mr Alkhorayef said. The mining sector contributes 15 per cent to the county’s GDP currently, according to Invest Saudi. The sector is also expected to create 200,000 direct and indirect jobs to boost employment opportunities in the kingdom.
“In near future, it (the new law) will achieve a qualitative shift for the mining sector and the mineral industry in the kingdom,” he said.
Saudi Arabia has a diverse range of over 48 minerals and metal resources, with at least 15 minerals that are commercially viable. With some of the world’s largest reserves of phosphate and tantalum, the kingdom is becoming a significant market for mineral extraction and processing. The central and northern parts of the country contain large amounts of bauxite, in addition to deposits of silver, zinc, copper, magnesite and kaolin, according to Invest Saudi.
“The mining potential of these resources is still significantly untapped, which presents the private sector with large and lucrative investment opportunities that capitalise on and serve the under-supplied market,” Invest Saudi said.
Saudi Arabia unveiled Vision 2030 in 2016, an economic overhaul plan designed to diversify revenue streams, nurture local industries and reduce the country’s dependence on oil.
The country is also reforming local laws and regulations to attract more foreign investments. The kingdom granted 348 investor licenses to international companies to operate in the country during the first quarter, Invest Saudi said earlier this year.