Mining to Saudi Arabia
Trends and opportunities
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 for
- 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 (SAR 3.75 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 2004 Mining code, the Government aimed at simplifying private sector investment in the mining industry and enhancing its profitability through measures like:
- No requirement to pay mineral royalties;
- Reduction of corporate tax liability to 20%; and
- Mining companies may be entitled to tax-free importation of equipment and machinery
- 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 SAR 260bn (US $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 SAR 80bn (US $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 Saudi Government is
aiming to raise the GDP of mining to SAR 260 billion by 2030 and to create
more than 100,000 jobs for citizens
In 2019 the Saudi Government announced the inauguration of the industry development, mining and logistics Program (NDLIP) a new platform (Taadin) to issue and renew mining licenses for construction materials quarries at an initial stage. TAADIN platform aims to facilitate issuance and renewal of mining licenses, inquire about mining sites available in the Kingdom, improve the investor experience and link the investor to electronic systems, in order to cope with the digital transformation plan targeting the mining sector. The National Industrial Development and Logistics Program (NIDLP) is one of 13 Vision Realization Programs under Saudi Vision 2030. NIDLP is focused on transforming Saudi Arabia into an industrial powerhouse and a global leader in logistical services by leading and guiding growth in four key sectors: Industry, Mining, Energy and Logistics. By 2030, the program aims to stimulate private sector investments worth more than SAR 1.7 trillion.
In September, 2019 the Saudi Government announced that it was dividing the Ministry of Energy, Industry and Mineral Resources into two separate entities. The Ministry of Energy that would be led by H.E Prince Abdul Aziz bin Salman, while the Ministry of Industry and Mineral Resources headed by Bandar Alkhorayef, a private sector investor and executive. The new ministry of Industry and Mineral Resources will become fully independent from January 1, 2020. The logic behind that move was that the Ministry was too large and needed to be split up to become more functional and place the emphasis on the mining sector the government want to establish.
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 Deputy Ministry for Mineral Resources (DMMR) has identified
1,273 sites for precious metals and 1,171 sites for 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 in 2020 as part of a development strategy
for the sector.
The Kingdom needs to continue to uncover its abundant natural resources
through more exploration, pro-actively marketing new opportunities, developing
the mining services sector, and integrating with downstream industries to
strengthen competitiveness and maximise value addition.
Operational and environmental challenges in the Saudi Mining sector is creating
opportunities for innovative solutions from Australian companies that
operate in similar environments in Australia and globally. The Saudi mining
sector is in need of mineral processing technology, equipment and proven
expertise to develop mineral-based manufacturing. The 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 life cycle.
There is a particular requirement for environmental protection techniques
and consultancy services. 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.
Additionally, the mining sector in Saudi Arabia offers a wide array of
investment opportunities for global companies operating across the mining
value chain. The Saudi Vision 2030 goals of increasing employment and GDP
contributions from mining, combined with recent successes in many upstream
and midstream projects in a number of commodities, is transforming the
Today, NIDLP offers investment opportunities supported by promising
geologic prospects, enhanced data access, a robust and enabling regulatory
environment, competitive terms, growing supply chains, and access to
healthy regional and international markets.
Saudi Arabia has invested over $40 billion in fully integrated mining value
chains in partnership with the private sector to build on its rich mineral
resources. In addition to significant production in precious and base
metals, a mine to metal aluminium value and phosphate production has
propelled the Kingdom to become the third largest global supplier of
fertilizer. Mining now delivers a US $17 billion contribution to national
Mining Web Resources:
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%), 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% in FY2015/16, and will ease
to a ‘steady state’ of 2.45% in FY2016/17. 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 is expected to
The Kingdom’s economy ranks 4th in the world for macroeconomic stability,
the economy has grown very strongly in recent years, benefiting 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% 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
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 a 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)
||Alcoa Of Australia
||Hatch PTY LTD
||Kemp Engineering Services (Australia)
||Flsmidth Abon PTY
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