Saudi Arabia grows non-ferrous metals sector as kingdom diversifies away from oil.
SAUDI Arabia is rapidly developing the extraction of its bountiful mineral resources, with international companies inking contracts over the past month to explore for zinc, copper and gold. Australian mining company Alara Resources announced that it is to buy a 50% interest in the Khnaiguiyah (NOTE--SPELLING IS CORRECT) zinc and copper project, and the Mutiyah and Umm Hijja projects (all are west of the capital Riyadh) through a joint venture with the Saudi-based United Arabian Mining (Manjem), according to a company statement. The projects are awaiting permits and the completion of a definitive feasibility study, which is expected to be completed in late 2011. The Khnaiguiyah project is estimated to hold 10.23 million tonnes of ore, of 7.46% zinc and 0.8% copper.
Meanwhile, Britain's KEFI Minerals announced in October that it plans to raise GBPounds GBP625,000 to explore for gold in Saudi Arabia, once it has secured an anticipated exploration licence (the first of 21 likely to be released), according to Proactive Investors UK. Work on the country's first base-metals mine, a US dollar USD280 million copper and gold project in Jabal Sayid, in the west of the country, started this year by Australia's Citadel Resources. The company holds 10 exploration licences. Other recent developments include the Saudi-based Al Masane al Kobra Mining Co. (AMAK) base and precious metals production mine bordering Yemen, which is slated to start production in 2011. The USdollar USD200 million mine will have an estimated annual output of 700,000 tonnes of sulphide ore, which will include 34,000 tonnes of copper concentrate, 54,000 tonnes of zinc concentrate, 193,000 ounces of silver and 7,600 ounces of gold, according to AMAK. Funding has come from the state-run Public Investment Fund, and the Saudi Industrial Investment Fund. Saudi Arabia has sizeable deposits of copper, zinc, nickel, silver, lead, ironradiant minerals, gold, platinum, tin, chrome and titanium. To date, 540 licences to explore minerals as well as 15 concession licences for copper, zinc, lead, iron, gold and silver have been granted by the country's ministry of petroleum and mineral resources. Estimates of copper minerals are around 60 million metric tonnes of copper ore, 3,000 tonnes of zinc ore and 20 million tonnes of gold ore, according to statistics from the Australian government.
To bolster development in the nascent sector and to diversify the kingdom's economy away from hydrocarbons, a Mining Investment Law was passed in 2004. This allows foreign companies to secure 100% ownership, exclusive exploration licences, exclusive mining leases and the ability to obtain two-year exploration leases (renewable for an additional four years) and 20 to 30-year mining leases. No mineral royalties are payable and companies are tax exempt for five years, after which the corporate tax rate is 20%.
Development of the sector has been spearheaded by the state-owned Saudi Arabian Mining Company (Ma'aden), which currently has five operating gold mines and a number of new projects in the pipeline, including the development of what it calls the 'central Arabian gold region', in central Saudi Arabia with three main gold sites--the Mansourah, the Massarah and the Ar Rjum. Ma'aden's proven gold ore deposits are 1.3 million ounces at existing mine sites and current exploration suggests deposits of over 8 million ounces elsewhere on the company's acreage. Ma'aden is also the 74.9% majority partner in the world's largest fully integrated aluminium project, a US$10 billion joint venture with America's Alcoa and the 70% majority partner in a US$5.6 billion phosphate project with Saudi petrochemicals giant SABIC (Saudi Basic Industries Corporation). Both projects utilise a major new rail link and processing facilities at Ras Aw Zawr on the kingdom's eastern coastline, where a new port is also being built
Other players involved in the sector include the Saudi-based Arabian Shield Company for Mining Industries, which holds a mining license for the Al-Masane deposit, which consists of around 7 million tonnes of ore grading 5.31% zinc, 1.42% copper, 1.19 grams/tonne of gold, and 40.2 grams/tonne of silver, according to Australian government figures. Britain's London Mining is involved in the Wadi Sawawin iron ore project, north of Jeddah, and UK-based Tertiary Minerals have a long-standing interest in the Ghurayyah tantalum-niobium-rare earth project in northwest Saudi Arabia, according to Ma'aden.
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|Publication:||International News Services.com|
|Date:||Oct 1, 2010|
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