Saudi Arabia’s mining sector ripe for foreign investment

Saudi Arabia’s largely untapped mining sector could prove to be an attractive investment option for foreign companies as the kingdom pushes ahead with reforms to diversify its economy away from oil.

However, a lot of work still needs to be done on the part of the government to facilitate and encourage such investments, Ali Alamri, chief executive of United Arabian Mining Co. told Argaam. For instance, he says more sites will need to be explored, while investment ready projects would also need to be delivered.

Authorities should also dedicate areas, he says, to help companies develop plants and assist in the export process, as Saudi Arabia currently imports cheap materials from various countries.

“Local firms could compete, providing added value and we also have an opportunity to export,” he said, adding that the sector stands to benefit from growing demand for raw materials locally.

Saudi deputy crown prince Mohammed Bin Salman recently said the kingdom held 6 percent of the world’s uranium reserves, which he believes could be “another oil” to exploit. Currently, the country only uses 3 to 5 percent of its mineral wealth.

Under the recently unveiled Saudi Vision 2030 plan, the mining’s sector contribution to GDP would increase by SAR 97 billion, which is 18,000 times more than current revenue. Ambitious plans were also announced to create 100,000 jobs for locals within the sector.

In addition, the government-owned Public Investment Fund (PIF) last month replaced four of its representatives on Saudi Arabian Mining Co.’s (Maaden) board of directors, which was seen by analysts as a step towards a more business oriented policy.

“Saudi aims to establish mining sector as the third pillar of the economy, creating options for local mining companies to capitalize on the opportunity,” Alamri added.

Write to Farha Abdelhaq at farha.abdelhaq@argaamnews.com