The kingdom’s unused mineral resources could be valued at $1.33 trillion
Riyadh: Saudi Arabia is planning to auction up to three mining licences in 2022, including Khnaiguiyah mines where zinc and copper deposits are estimated at around 26 million tonnes, the kingdom’s mining minister said on Wednesday.
The licences will be awarded under a new mining law that came into effect in January 2021 and which aims to accelerate foreign investment in the sector as part of efforts to diversify the economy away from hydrocarbons.
“Khnaiguiyah will be first,” Bandar Al Khorayef, Saudi Arabia’s mining and industry minister said, adding that the bidding process would start by the end of this quarter, or beginning of the second quarter.
The minister, who was speaking in an interview with Reuters on the sidelines of an international mining conference held in Riyadh, said the bidding, including the pre-qualification phase, would take around six months.
He added that another two locations would be auctioned depending on technical validation, saying they were aiming for “three… more or less, but yes, this requires some technical validation”.
Riyadh’s efforts to build an economy that does not largely rely on oil and state subsidies involves a shift towards mining vast untapped reserves of bauxite, the main source of aluminium, as well as phosphate, gold, copper and uranium.
The government estimates the kingdom’s unused mineral resources to be valued at 5 trillion riyals ($1.33 trillion).
The kingdom’s energy minister told the same conference on Wednesday that Saudi Arabia, the world’s biggest exporter of crude oil, is planning to use its vast uranium resources to develop a nuclear power programme.
Riyadh has said it aims to create more than 200,000 direct and indirect jobs in the mining sector by 2030.
There will be a designed legal framework for those licences, the minister said. “So there will be certain activities that will be offered by the bidder and that’s how we will evaluate the bids.” Bidders may focus either on technology, a contribution to the local community or other criteria, he said. It’s a complicated formula but it allows the government to evaluate the different bids on multiple elements and KPIs (key performance indicator), he said.
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