Saudi Arabia announces qualified bidders for its largest mining site

The Khnaiguiyah site, which covers more than 350 square kilometres, has a potential value of $1.3tn across 48 commodities

A miner works in the Al Amar gold mine south-west of Riyadh. Expansion of the country’s industrial and mining sectors is an important part of Saudi Arabia’s Vision 2030 plan. Reuters

Saudi Arabia on Monday announced qualified bidders for the Khnaiguiyah project, the kingdom’s largest mining exploration site.

The bidders include Alara Saudi Ventures, Al Masane Al Kobra Mining Company, Essel Mining and Industries Limited, Ivanhoe Electric, Moxico Resources, Norin Mining, Saudi Arabian Mining Company and Vedanta Limited, the Saudi Ministry of Industry and Mineral Resources said in a statement.

The Khnaiguiyah site, which covers more than 350 square kilometres, is located in Al Rayn terrane. It forms part of the Arabian Shield, which has a potential value of $1.3 trillion across 48 commodities, according to official data.

Qualified bidders have been given two months to complete and submit their proposals, and will be invited to learn more about the next stages of the licensing round process. They can also visit the site in person, the ministry said.

Proposal submissions will be assessed based on a number of criteria, including technical and commercial terms, financial and environmental and social management plans.

The ministry may select a single successful bidder who will enter the final negotiation stage on the terms of the exploration licence, it added.

Meanwhile, if two or more proposals fall within a comparative range, the ministry will designate these bidders as “competitive” and invite them to participate in a final licensing round in the form of a multi-round auction.

Expansion of Saudi Arabia's industrial and mining sectors is an important part of the kingdom's Vision 2030 plans. The Arab world’s largest economy currently accounts for nearly 37.9 per cent of the Middle East and Africa’s $16 billion metals and mining industry market.

In 2020, the kingdom approved a mining law to boost foreign direct investment in the sector. The law, which came into effect in January 2021, will help the country explore mineral resources worth about 5tn Saudi riyals ($1.3tn), with 20 million ounces of gold reserves below ground, according to Invest Saudi.

Extensive exploration work has started at Khnaiguiyah, including 100,000 metres already drilled and a three-dimensional geological model.

The Saudi Geological Survey has confirmed the site's considerable geological potential of more than 25 million tonnes of zinc and copper, both of which are critical minerals for the global energy transition.

The estimated size of investment at the Khnaiguiyah project is 2bn riyals, the ministry said. It could potentially generate up to 3,000 direct and indirect jobs and would contribute substantially to developing the country’s zinc and copper downstream industries.