Mining to Oman

Trends and opportunities

The market

Oman is the second largest country after Saudi Arabia in the Gulf Cooperation Council region. The country has copper, gold, silver, chromite, lead, nickel, manganese and zinc mineral reserves. These reserves are undeveloped due to a preference for growing the oil sector.

Since 2014, the Omani Government has been expanding mining activity in the country. It launched the Public Authority for Mining under the Ministry of Commerce and Industry to regulate the mining sector, and Mining Development Oman (MDO) in January 2016 to strengthen private sector involvement and investment. MDO is entrusted to carry out both upstream and downstream activities and to collaborate with the private sector.

As the government looks to diversify and move away from dependence on oil revenue and to create jobs for Omani nationals, growth is anticipated in the mining sector following the discovery of significant reserves of minerals, including gold, copper and rare earths. ^[1]

Oman Mining Company LLC (OMCO) is a state-owned company established by a Royal Decree based in Sohar, north-eastern Oman. OMCO produces copper cathode and runs a concentrator plant, copper smelter, and refinery. OMCO and the privately owned Mawarid Mining have joint copper mining operations in the Sohar and Shinas areas. They have exploited 35 million tonnes of ore and recently signed deals to commercialise copper-gold deposits in their respective concessions. ^[2]

Mawarid Mining LLC is the only private sector company operating in the copper sector, with the Shinas open-pit mine in production and the Safwa and Mandoos mines under development. Mawarid is also engaged in developing an underground mine targeting copper deposits within its concessions in the Ghuzayn Underground Copper Mining Project, located in Batinah North Governorate. Mawarid is also expecting an investment of up to $100 million in the development of copper deposits in its Block 1 and 2 concessions in North Al Batinah Governorate. ^[3]

Gulf Mining Group is a leading player in Oman’s mineral sector. It has emerged as one of the largest producers and exporters of chrome ore. The group plans to set up a major potash mining project with an investment of US$300 to US$500 million targeting prolific reserves in central Oman. It is also one of the largest producers of gypsum in Oman. The group is in the process of setting up a processing plant for gypsum board manufacturing and other related products in Salalah. ^[4]

Kunooz Oman Holding is a major integrated player in Oman’s mining and mineral processing sector for limestone and gypsum.

Zawawi Minerals, part of the Qais Zawawi Group, is focused on developing Oman’s industrial minerals such as gypsum, limestone, dolomite and chrome ore.

Alara Resources Ltd is an Australian company with a mining licence to work on the Al Hadeetha Copper Project. Alara has completed site infrastructure construction on the Al Hadeetha copper-gold project and is working on a 1 million tonne per annum copper concentrator for the initial 10 years. This is one of five mining licence applications that Alara Resources has been issued in Oman, three of which pertain to the Al Hadeetha Copper Project. The Washihi project is a joint venture between Alara (70%) and Al Hadeetha Investments (30%). ^[5]

In 2014, UK-based company Savannah Resources bought Canadian company Gentor Resources’ assets in Oman. In 2017, Savannah secured operating permits for the high-grade copper Mahab 4 and Maqail South mining licence applications in Oman. The company acquired a 65% stake in Al Fairuz Mining, which is the holder of a Block 5 licence comprising Mahab 4 and Maqail South deposits. The company expects to start mining in mid-2018. Savannah Resources also plans to set up a copper concentrator facility with capacity to process 250,000 tonnes per annum of concentrate from these and other deposits.

Oman is also home to an aluminium smelter at Sohar, which is 40% owned by Sohar Aluminium, 40% by Abu Dhabi Energy and 20% by Rio Tinto Alcan.

Opportunities

There are operational challenges in Oman that translate to opportunities for Australian innovation. The Omani mining sector is seeking exploration expertise, industrial mineral processing technology, equipment and experienced companies to develop mineral-based manufacturing. The sector is also looking to train and upskill in engineering consultancy, drilling and chemical testing, and related equipment manufacture ring to fill supply chain gaps across the mining lifecycle.

In addition, there are opportunities for companies in copper and gold exploration, industrial mineral processing technology equipment, drilling technology, EPCs turnkey, and consultancies to assist in establishing infrastructure for new projects.

Competitive Environment

The Sultanate of Oman has adopted a policy of economic diversification and creation of a national economy based on private enterprise. The Government has set a goal of 81% of GDP by 2020 for the non-oil sector, with the private sector representing 91% of the economy by that year. Oman seeks foreign investment, especially in the mining, food processing, logistics, information technology, tourism, healthcare, fisheries, and higher education sectors.

To diversify its economy, Oman is revamping its ports infrastructure from Muscat to Duqm, Sohar and Salalah. They are being upgraded to attract tourism and to increase industrial production and exports. Oman seeks to utilise its strategic location in the Arabian Peninsula to become a hub for international shipping. The country has allocated $10 billion to the Duqm Economic Free Zone and is seeking another $10 billion in foreign investment by 2022.

Government efforts to diversify revenue streams and ramp up reforms are driving positive growth in Oman and attracting more investors to the country.

Tariffs, regulations and customs

Foreign goods are imported according to Oman’s tariff schedule, which imposes duties not exceeding 10%. Bayan system is an online single window/one-stop service from the Directorate General of Customs, Royal Oman Police (ROP). It facilitates a convenient and fast clearance of goods for trading communities and various stakeholders. The Bayan system aims to provide a coordinated view of the government to the trade community and customers, and alleviates some of the administrative and logistical processes. For more details, visit the Royal Oman Police.

Marketing your products and services

Market Entry

Australian products and services including consultancy, contracting, technology transfers and materials are used in the region. Providers of specialised services need to bid for projects, therefore a local presence is recommended. The bulk of materials in the region are imported through Dubai in the UAE. Major importers have significant warehousing facilities and well-developed distribution networks and branches in UAE, which is being used as a regional hub. Australian companies compete best when they have a value-added product with a distinct competitive advantage. In Oman, there is a strong focus on forming relationships to carry out business. For this reason, companies need the commitment and resources to make a number of visits to maintain relationships with their partners or establish an office.

Links and industry contacts

Government Departments and Business

• Ministry of Commerce and Industry
• Public Authority for Investment Promotion & Export Development
• Ministry of Manpower
• Ministry of Information
• Official Oman eGovernment Services Portal
• Ministry of Finance

Mining Resources

• Ministry of Commerce & Industry - Muscat
• Mawarid Mining LLC
• Gulf Mining Group
• Kunooz Oman Holding
• Zawawi Minerals
• Alara Resources Ltd
• Savannah Resources
• Oman Mining Company LLC

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

• develop international markets
• win productive foreign direct investment
• promote international education
• strengthen Australia's tourism industry
• seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.