Cost excellence key to unlock potential of Saudi Arabia's mining sector: Alvarez and Marsal

Arab News

12 hours ago

RIYADH: Mining firms operating in Saudi Arabia should implement disciplined financial planning, transparency, and cost ownership in their operating model to reap long-term benefits, according to an analysis.
In its latest report, professional services firm Alvarez and Marsal said the Kingdom's mining and minerals industry is poised for sustainable long-term growth with committed investments worth SR246 billion ($65.55 billion) supporting the sector.
The study was released just days after the Kingdom's ranking on the Mining Investment Attractiveness Index jumped from 104th in 2013 to 23rd in 2024, cementing the nation's status as the world's fastest-rising power in the exploration industry, according to Canadian public policy think tank Fraser Institute.
As a part of its economic diversification efforts, Saudi Arabia is accelerating the development of its mining sector, with the Kingdom's mineral wealth now estimated at SR9.4 trillion ($2.5 trillion).
Commenting on the latest report, Alexander Shvets, managing director, infrastructure and capital projects – metals and mining at Alvarez and Marsal Middle East, said: 'Saudi Arabia's mining sector is now central to the Kingdom's economic transformation.'
He added: 'Building on this momentum with embedded cost visibility and performance tracking will help operators to achieve global competitiveness and long-term value creation.'
According to Alvarez and Marsal, adopting structured financial frameworks can help mining companies seize emerging opportunities and ensure operational excellence as the sector matures.
'Control is not just a finance function — it's an operational discipline. In mining, where complexity and capital intensity are high, real-time cost visibility and team capability are what turn strategy into measurable results,' said Renat Akimbitov, managing director, infrastructure and capital projects – metals and mining at Alvarez and Marsal Middle East.
The report said Saudi Arabia has already laid strong foundations in the sector, with the establishment of institutions such as the Saudi Geological Survey, creating a dynamic and investor-friendly environment.
In March, the Kingdom also launched a new incentive package to attract foreign direct investments into the nation's mining sector.
At that time, the Saudi Press Agency reported that the Kingdom's Ministry of Investment is collaborating closely with the Ministry of Industry and Mineral Resources through an exploration enablement program aimed at simplifying investments in the mineral exploration industry.
Alvarez and Marsal outlined a strategy for mining and industrial companies to strengthen financial resilience by implementing activity-based budgeting, which links finance directly to operational drivers for greater accuracy and agility.
The report also underscored the vitality of empowering business leaders with digital dashboards to manage costs dynamically, as well as conducting structured cost review meetings to ensure accountability through regular performance tracking.
Alvarez and Marsal further highlighted the importance of cost-capability building and said that equipping teams with practical tools and training is essential to foster a cost-conscious culture within the organization.