Mining to Saudi Arabia

Trends and opportunities

The market

Saudi Arabia possesses more mineral resources than any other country in the Gulf region. The soil in Saudi Arabia is rich in gold, copper, phosphate, and a wide array of industrial minerals. With some of the world’s largest reserves of phosphate and tantalum, and up to 20 Moz of gold in known deposits, Saudi Arabia is becoming a significant market for mineral extraction and processing which provide manufacturing opportunities to develop high value products for the growing demand of several advanced industries such as automotive, aerospace, solar and oil & gas. Investors in these opportunities will benefit from the Kingdom's competitive advantage in energy and the provided financial incentives.

The central and northern parts of the country contain large amounts of bauxite, in addition to deposits of silver, zinc, copper, magnesite, and kaolin. Over 40 types of mineral deposits have been identified so far in the Kingdom, with at least 15 industrial minerals with potential to be extracted. extraction.

  • In 1997, the Saudi Government established the Saudi Arabian Mining Company (Ma’aden) as a catalyst for private investment in the mining sector. Capitalized at $1 billion (SR3.75 billion), Ma’aden was entrusted with consolidating the government-owned mining projects and turning them into commercially viable ventures with private sector participation.
  • In 2004 Saudi Arabia approved a revised mining code to further encourage investment in the mining industry. Under the new code.
  • In 2007 the government privatized Ma'aden and it is now a listed company on the Saudi Stock Exchange.
  • In 2016 Saudi Arabia put in place ambitious plans to raise the value of its mining operations to reach SR 260bn ($69.3bn) under Saudi Vision 2030. Currently, the direct and indirect contribution of the sector to the Kingdom’s GDP is estimated to be around SR80bn ($21.3bn), with the sector accounting for 265,000 jobs. The aims is to triple the contribution to the Saudi economy made by mining and minerals. The ministry is aiming to raise the GDP of mining to SR260 billion by 2030 and to create more than 100,000 jobs for citizens

The development of the mining sector occupies a prominent position in Saudi Arabia's program of diversifying its economy away from oil. The Government's strategy includes establishing industries for extracting and processing the minerals, developing the transportation infrastructure to make the minerals accessible for processing and streamlining export procedures. In fact, Saudi Arabia proclaimed the mining industry into the “third pillar” of the Saudi economy after oil and petrochemicals.

To date, over 48 minerals have been identified in the Kingdom of Saudi Arabia, with at least 15 industrial minerals that could become commercially viable. The DMMR (Deputy Ministery for Mineral Resources) has identified 1,273 sites of precious metals and 1,171 sites of non-precious metals. Minerals discovered in Saudi Arabia include phosphate; bauxite; bentonite; copper; dolomite; expandable clay; feldspar and nepheline syenite; garnet; gold; zinc; granite; graphite; gypsum; tantalum; high grade silica sand; kaolinitic clays; limestone; magnesium; marble; olivine; pozzolan; rock wool; silver; and zeolites. The Kingdom plans to complete viability studies into 50 new mineral opportunities next year as part of a development strategy for the sector. In 2017, studies will be made for confirmed reserves of more than 50 minerals in order to know their quantities and possible uses in industry.

The Kingdom needs to continue to uncover its abundant natural resources through more exploration, pro-actively market new opportunities, develop the mining services sector, and integrate with downstream industries to strengthen competitiveness and maximize value addition.

Opportunities

Operational and environmental challenges in Saudi Mining Sector create opportunities for innovative solutions from Australian companies that operate in similar environments in Australia and globally. Saudi Mining sector is in need of mineral processing technology, equipment and proven expertise to develop mineral-based manufacturing. The Saudi mining industry is also in need of consulting engineering companies, drilling and chemical testing, and related equipment manufacturers/suppliers as well as training and upskilling to fill supply chain gaps across the mining lifecycle.

There is a particular requirement for environmental protection techniques and consultancy development of mineral wealth is creating significant infrastructure demands, including the building of the 1,300 kilometers North-South Railway Project, estimated at US$3-4 billion, linking the mining and processing in areas such as the Al-Jawf phosphate mine, via Al-Zabirah, to Riyadh, then to Jubail. Each area is generating major infrastructure projects in support of mining activity which is providing opportunities for Australian companies in the power, transport, communications and construction sectors

A combination of Government support to investors, low cost energy for output processing and ongoing development of transport infrastructure, place Saudi Arabia as an attractive mining destination.

Mining Web Resources:

Links and industry contacts

Competitive Environment

According to the Saudi Arabia Investment Authority SAGIA , Saudi Arabia is the world’s 19th largest economy, a member of the G20 and the largest economy in the Middle East North Africa (MENA) region with the third-biggest current account surplus in the world. It is the world's 16th largest exporter and the world’s 29th largest importer. The economy has grown very strongly in recent years. The Kingdom boasts some of the lowest energy prices for investment projects. It has a continuously expanding domestic market (annual population growth of 2.5 per cent), which is adding to a young and consuming population with strong buying power. With excellent access to MENA markets, as well as the advanced and emerging economies of nearby Europe, Asia and Africa, market exposure for Saudi-based projects is not only vast but also highly diversified.

Headline inflation remains subdued at 2.0 per cent in the 2015/16 financial year, and will ease to a ‘steady state’ of 2.45 per cent in the 2016/17 financial year. A reputation for a strong, stable government with consistently large budget surpluses, a stable banking system and a stable currency all combine to offer investors a business-friendly environment. The near term economic outlook is positive and it is expected that non-oil growth will be underpinned by strong private sector activity and government spending on large projects in transportation infrastructure and housing, with inflation expected to remain subdued.

The Kingdom’s economy ranks 4th in the world for macroeconomic stability, the economy has grown very strongly in recent years, benefitting from high oil prices and output, strong private sector activity, and increased government spending. The private sector is playing an increasingly larger role in the Saudi economy – it now accounts for 39.5 per cent of the gross domestic product (GDP). The sector is expected to continue growing, especially as Saudi Arabia opens its doors further to foreign investment.

Tariffs, regulations and customs

Please refer to Saudi Arabia customs websites for a detailed breakdown of tariffs and import restrictions.

Saudi Arabia Customs

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 specialized services need to bid for projects, therefore a local presence is recommended. The bulk of materials in the region are imported through Dubai. Major importers have significant warehousing facilities and well-developed distribution networks and branches in UAE which is being used as Hub. Saudi Arabia has a strong manufacturing base and well developed relationships with suppliers in India and China. Australian companies compete best when they have a value-added product with a distinct competitive advantage. In Saudi Arabia there is a strong focus on forming relationships to do business. For this reason, in order to succeed, 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

Australian Success Stories

Since the establishment of Ma’aden in 1997, Australian mining expertise played a pivotal role in developing, and evolving the Saudi Mining Industry.

Example of top 10 Australian Suppliers to Ma’aden 2012-2017

Value ( Million SAR) Supplier
3108.43 Alcoa Of Australia
267.5 Honeywell LTD
219.47 WorleyParsons
149.37 Hatch PTY LTD
132.62 Kemp Engineering Services (Australia)
41.86 Wallis Drilling
28.26 Outotec PTY
28.11 AMEC(Australia)
20.93 Flsmidth Abon PTY

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Contact details

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