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 to be extracted.
- 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
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.
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
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
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
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
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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