Saudi Arabia’s mining sector is undergoing a significant transformation and is gearing up to become one of the key pillars of economic diversification efforts outlined in Vision 2030. The latest report from the National Industrial and Mining Information Center reveals that Saudi Arabia issued 152 industrial licenses in January alone, bringing the total number of operating and under-construction factories in the Kingdom to 11,672. These factories represent a combined investment of SAR1.539 trillion ($410.4 billion).
With abundant mineral wealth estimated at SAR9.4 trillion ($2.5 trillion), Saudi Arabia sees a pivotal opportunity to expand non-oil revenue streams and bolster economic resilience alongside the oil and petrochemical industries.
The center’s report reveals significant changes in new industrial investments in Saudi Arabia’s mining sector. Notably, the number of factories operating in the country saw a 10 percent increase in 2023 to 11,549. Moreover, Saudi Arabia issued 1,379 new industrial licenses in 2023 with a total investment exceeding SAR81 billion. Additionally, 1,058 new factories commenced production last year, representing investments of SAR45 billion.
Accelerating exploration and development
To expedite exploration and development efforts, Saudi Arabia has ramped up investment in the mining sector. By the end of 2023, it had committed SAR682.5 million ($182 million) in exploration incentives. Moreover, the increase in the number of new industrial licenses underscores the government’s commitment to fostering growth in the sector.
Recent discoveries, including substantial gold reserves in the Mansoura and Masara mines, highlight the immense potential of Saudi Arabia’s mineral resources. Hence, these mines boast a projected annual production capacity of 250,000 ounces of gold.
Besides, government initiatives aim to create a conducive business environment for mining development. Programs such as the Mining Investment Law streamline licensing processes in Saudi Arabia while prioritizing environmental sustainability and community welfare.
Moreover, the Saudi Industrial Development Fund plays a pivotal role in financing advanced exploration and mining projects, offering financial support for eligible projects and initiatives across various sectors. This includes financing solutions for small and medium enterprises (SMEs), renewable energy projects, and efforts to increase local sector content.
Read: Saudi Arabia’s industrial production index up 1 percent in February
Three-phase approach
Saudi Arabia’s comprehensive approach to economic transformation in the mining sector spans three phases.
- Phase 1: Mining Activities — Phase one entails exploration and survey operations to determine mineral quantities. It also includes conducting economic feasibility studies, developing mines, and processing raw materials.
- Phase 2: Intermediate Industries — Includes refining and smelting operations to produce basic materials.
- Phase 3: Conversion Industries — Manufacturing of semi-finished and finished products.
Supporting the sector’s growth is the Saudi Geological Survey which facilitates investment in mineral exploration through high-resolution geological data and aerial surveys. This initiative aims to attract investments, develop national competencies, and bolster confidence in exploration activities.
Moreover, Saudi Arabia’s logistics sector plays a crucial role in facilitating investment in the mining sector by providing solutions for transporting raw materials and processed minerals to industrial cities. This enhances the sector’s competitiveness and supports its integration into the global economy.
These initiatives are projected to significantly contribute to Saudi Arabia’s GDP, with the mining sector expected to reach SAR176 billion by 2030. Moreover, they aim to enhance the trade balance, promote sustainability, create employment opportunities, drive exports, increase non-oil revenues, and foster local manufacturing capabilities.
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