Saudi mining sector offers significant long-term potential: Fitch

Saudi Arabia's mining sector will remain the most attractive to foreign investors in the Middle East and North Africa (MENA) region, as the government embarks on a diversification strategy through supportive sectoral policies, Fitch Solutions said in a new report.

"Saudi Arabia is as an attractive proposition for foreign investors on account of its status as the region's largest economy, its minimal tax burden and strong information and communications technology performance," the report noted.

Besides, the Kingdom offers relatively low risks to investors with regards to the excellent quality of its transport network and utility costs, and comparatively limited bureaucracy surrounding trade flows, it added.

Saudi Arabia’s 2019 budget allocated SAR 33 billion for the energy, industry, mining and logistics sectors, Energy Minister Khalid Al-Falih said last December. In March, he had announced that the Kingdom has $1.3 trillion worth of mining resources and aims to quadruple the size of its mining, renewables and logistics sectors.

However, Fitch cautioned incoming businesses could face significant labor market risks due to a small domestic labor force and geopolitical issues.