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
Mining Resources
Contact details
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Submit your enquiry
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[1] Minerals Development Oman
[2]Oman state mining company website
[3] Mawarid mining website
[4] Gulf mining website
[5] Alara Resources website