Saudi Arabia to auction five new mining exploration licences in 2023

The Riyadh skyline. Saudi Arabia wants the mining sector's contribution to the gross domestic product to reach $64 billion in 2030. Reuters

Saudi Arabia is planning to auction five new mining exploration licences with copper, zinc, lead and iron deposits for local and international investors in 2023, the mining minister said on Sunday, as it diversifies the economy away from hydrocarbons.

The ministry will launch the bidding process later for the licences in Bir Umq, Jabal Idsas, Umm Hadid, Jabal Sahabiyah and Ar Ridaniyah, Bandar Al Khorayef said.

The licences will be awarded under a new law that came into effect in January 2021 and aims to accelerate foreign investment in the sector as part of efforts to diversify the economy away from hydrocarbons.

Riyadh's efforts to build an economy that does not rely on oil involves a shift towards mining vast untapped reserves of several resources including phosphate, gold, copper, uranium and bauxite, the main source of aluminium.

The government estimates the kingdom's unused mineral resources to be valued at 5 trillion riyals ($1.33tn).

Most of the new licences have zinc and copper deposits while Jabal Idsas is for iron, Mr Al Khorayef said. Umm Hadid in Riyadh region includes also lead, copper and silver, he said.

“(The new licences) aim to achieve the goals of Saudi Vision 2030 and the increase of the mining sector's contribution to the gross domestic product to $64 billion in 2030,” Mr Al Khorayef said.

Vision 2030 is Crown Prince Mohammed bin Salman's plan to transform the country's economy as the kingdom prepares for the post-fossil-fuel era.

The five licences will follow Khnaighuiyah mines, where zinc and copper deposits are estimated around 26 million tonnes and which were awarded to a consortium of Moxico Resources PLC and Ajlan & Bros Mining Co last month.

The kingdom currently accounts for about 37.9 per cent of the Middle East and North Africa’s $16bn metals and mining market, official data shows. Its mining industry has grown 27 per cent annually to reach more than $194 million — achieving its highest revenue last year.

Saudi Arabia aims to attract $170bn to its mining sector by 2030. The Gulf country is aiming to tap into growing demand for metals that are used to produce batteries — an integral component in electric cars.

The kingdom is also ramping up its mining activity in anticipation of a surge in demand for minerals required for the energy transition.