Saudi Arabia: mining on two fronts: the state-owned Saudi Arabian Mining Company, Ma'aden, will play a vital part in aiding the kingdom's diversification goals. (Business & Finance).
Efforts to diversify the Saudi economy have run up against a multitude of problems: the lack of alternatives, the more attractive investment opportunities available in the oil and gas sector and the lack of domestic expertise. Yet the government has persisted in its efforts and in one or two small areas, the diversification drive is beginning to pay dividends. The mining sector is one such area and while gold mining has become well established, a plan to develop the phosphate and bauxite bauxite (bôk`sīt, bŏk`–), mixture of hydrated aluminum oxides usually containing oxides of iron and silicon in varying quantities. mining sectors in tandem Adv. 1. in tandem - one behind the other; "ride tandem on a bicycle built for two"; "riding horses down the path in tandem"
tandem could help invigorate in·vig·or·ate
tr.v. in·vig·or·at·ed, in·vig·or·at·ing, in·vig·or·ates
To impart vigor, strength, or vitality to; animate: "A few whiffs of the raw, strong scent of phlox invigorated her" economic growth in the interior.
The government's decision in 1997 to set up the state-owned Saudi Arabian Mining Company (Ma'aden)--along the lines of state petrochemical company Sabic--is already looking like a wise move. The presence of bauxite, phosphates and other minerals in Saudi Arabia Saudi Arabia (sä`dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. has been known since the 1980s but a domestic mining sector has remained stubbornly difficult to propagate. Now, however, the string of proposed but abandoned projects looks like coming to an end.
Ma'aden's existing mines produce 12,000 ounces of gold, 300,000 ounces of silver, 3,000 tonnes of zinc and 900 tonnes of copper a year. Of the company's two gold mines, the Mahad ad Dahab is the more successful, having so far yielded a total of over one million ounces. But the eyes of the mining industry are now turning to the far north of the country. The enabling factor is the proposed $1.5 billion extension of the Dammam-Riyadh railway to Al Qurayyat in the far north of the country. The railway will enable the export of phosphates from Al Jalamid, where Ma'aden estimates reserves at 11m tonnes. If the railway plan is given the go-ahead, the Saudi parastatal par·a·stat·al
Owned or controlled wholly or partly by the government: a parastatal mining corporation.
A company or agency owned or controlled wholly or partly by the government. intends to construct a processing plant near Dammam on the coast, with facilities for processing phosphoric acid phosphoric acid, any one of three chemical compounds made up of phosphorus, oxygen, and hydrogen (see acids and bases). The most common, orthophosphoric acid, H3PO4, is usually simply called phosphoric acid. and diammonium phosphate Diammonium phosphate (DAP) (chemical formula (NH4)2HPO4 ) is one of a series of water-soluble ammonium phosphate salts which can be produced when ammonia reacts with phosphoric acid. DAP is used as a fertilizer and a fire retardant. for export to south and east Asia East Asia
A region of Asia coextensive with the Far East.
East Asian adj. & n. . Apart from the Al Qurayyat works, Ma'aden has also held phosphate exploration and mining concessions in the Al Jalamid and Wadi Sirhan areas since September 1999. The other great hope for the mining sector is bauxite. Ma'aden estimates that the Al Zabirah deposit in northern Saudi Arabia contains over 125m tonnes of bauxite, from which alumina alumina (əl`mĭnə) or aluminum oxide, Al2O3, chemical compound with m.p. about 2,000°C; and sp. gr. about 4.0. is extracted for processing into aluminium. Not only is the development of a bauxite mining sector beneficial for the Saudi economy in its own right but the government and Ma'aden are both keen to set up several processing plants in the country itself. As in the hydrocarbon sector, the government is eager that the financial benefits of the processing stages--where much of the profit in most industries is generated--remain in Saudi Arabia.
When Ma'aden was set up, it was expected that the company would produce bauxite as a feedstock for existing smelters in the region such as Dubai Aluminium. Now, however, it is expected that both processing stages will be based in Saudi Arabia. The entire project will involve three stages: the bauxite mines in the north, the construction of a combined alumina and aluminium plant at Dammam on the coast and creation of the rail link to transport bauxite from the mines to the new plant. Domestic construction firm Saudi Oger Saudi Oger Ltd. (Arabic: سعودي أوجيه), a construction company, was incorporated in January 1978 under the rules and laws of the Kingdom of Saudi Arabia with its headquarters in Riyadh. is involved in the phosphates scheme and may also take a stake in the bauxite proposal. Ma'aden estimates that bauxite production of 1.4m tonnes per year (t/y) will be required to feed aluminium output of 600,000 t/y at Dammam. Although the results of a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. into the project are unlikely to be known before the start of 2004, the signs are that the scheme will be given the go-ahead. If all goes as planned, the Dammam installation will be completed about two years before the first Saudi bauxite can be delivered. It could therefore operate using foreign bauxite or alumina as a feedstock in the interim.
Locating the phosphate and aluminium plants next to each other should reduce the costs on both projects, particularly with regard to waste disposal. Moreover, the recent minimal deregulation Deregulation
The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.
Traditional areas that have been deregulated are the telephone and airline industries. of the water and power sectors, coupled with falling desalination desalination
Removal of dissolved salts from seawater and from the salty waters of inland seas, highly mineralized groundwaters, and municipal wastewaters. power production costs, should enable the construction of an independent water and power plant (IWPP IWPP Independent Water and Power Production
IWPP Industrial Waste & Pollution Prevention (Metropolitan Council Environmental Services; Minnesota) ) at Dammam to supply both plants with an estimated 1,300 MW.
Saudi Arabia already has over 30 desalination plants, but most are small scale power producers. With falls in the cost of generating power from such plants and a general policy of gradual economic liberalisation n. 1. Same as liberalization.
Noun 1. liberalisation - the act of making less strict
alleviation, easement, easing, relief - the act of reducing something unpleasant (as pain or annoyance); "he asked the nurse , the government is keen to promote IWPPs on a bigger scale, with the expanded Al Jubail plant expected to generate 2200 MW. The planned Dammam plant would be in line with this strategy.
The railway project also fits in with government policy of encouraging economic diversification but it remains to be seen whether any other industries can find a use for the new transport link, which will almost reach the Jordanian border. Although more a north-south railway, the line would travel over halfway across the country in an east-west direction Noun 1. east-west direction - in a direction parallel with lines of latitude
direction, way - a line leading to a place or point; "he looked the other direction"; "didn't know the way home" and could therefore also form part of the government's promised east-west rail link.
The current rail plan is borne out of a 1999 proposal by the World Bank to build a similar railway along the line of the oil pipeline from Dammam to the far northwest of Saudi Arabia, to service a phosphate mining scheme in the north. The bank's report on the proposed route also suggested that the railway could be utilised by any bauxite mines that were set up. The Dammam-Jubail-Quriyat phosphate and bauxite railway would have stretched 1000 km, less than the 1250 km outlined in the new scheme, although the first section of this project as far as Riyadh is already in place. The government hopes to increase private sector involvement in the economy as a whole and all the signs are that private companies will be brought on board in the mining projects that have been proposed. A major mining bill may be on the cards once the government determines the level of private sector participation desired in the new project. While Ma'aden's prediction that the Al Jalamid phosphates scheme could create 6,000 direct and 40,000 indirect jobs could be a shade optimistic in the short term, the project will provide employment and encourage economic diversification, both directly--through creating a new industry--and indirectly, through support industries and improved transport links.
In the long term, the government hopes to restructure Ma'aden as a joint stock company. When the company was originally set up by royal decree in 1997, completion of this process was scheduled for April 2002 but there now seems little prospect of equity being sold in the company during the course of 2003. However, the government has reiterated its commitment to attracting substantial private investment in the mining sector and other extractive extractive /ex·trac·tive/ (-tiv) any substance present in an organized tissue, or in a mixture in a small quantity, and requiring extraction by a special method.
1. industries, as part of its drive to reduce its long standing dependence on oil and gas receipts so the future of Ma'aden appears assured.