Latest news with #MiningInvestmentLaw
Argaam
27-04-2025
- Business
- Argaam
S&P Global: Mining, metals sector to play a growing role in Saudi economic growth
S&P Global expects Saudi Arabia's long-term economic growth to increasingly rely on the mining and metals sector, consistent with the objectives of Vision 2030 to diversify the Kingdom's economy away from oil dependency. Saudi Arabia possesses significant reserves of metals critical to the global energy transition, including copper, nickel, and lithium, as well as strategic minerals such as phosphate fertilizers essential for food security. This positions the Kingdom favorably amid rising global demand for these resources. Globally, S&P Global maintains a moderately negative outlook on the metals and mining sector, reflecting ongoing cost pressures related to declining ore grades and elevated reinvestment requirements. Despite relatively high producer prices and input costs, sector profitability and cash flows have been under pressure since the inflationary surge of 2021–2022. Nonetheless, S&P notes that demand for metals remains resilient. Physical assets such as mines, smelters, and strong balance sheets will increasingly serve as key mitigants against risks such as regulatory changes and liquidity constraints. Stable metal prices, prudent financial management, lower leverage levels, and limited merger and acquisition activity are expected to support overall credit quality despite macroeconomic headwinds. Saudi Arabia is expected to outperform the global trend. Proactive policy measures, extensive resource endowments, and government-led investments are likely to offset sector-specific challenges. Saudi mining and metals companies benefit from significant government support, modernized regulatory frameworks—such as the Mining Investment Law—and major capital investments in domestic infrastructure and mega-projects. These initiatives are projected to stimulate domestic mineral demand, reduce import dependency, and enhance sectoral efficiency over time. They will also strengthen Saudi Arabia's capacity to meet increasing global demand for base and transition minerals. S&P estimates the mining sector currently contributes approximately $400 million to the Saudi economy. The government's strategic objective is to increase the sector's GDP contribution to $75 billion by 2030, up from an estimated $17 billion in 2024. The Public Investment Fund's commitment to invest $40 billion annually into domestic mega-projects is expected to further fuel local demand for metals and mining products. Large-scale developments such as NEOM, the Red Sea Project, Qiddiya, Roshn, and Diriyah are anticipated to accelerate urbanization and drive demand for steel, aluminum, and copper. Integrated industrial clusters in NEOM and Qiddiya's strategic focus on entertainment, tourism, and transportation infrastructure will also boost domestic consumption of construction materials and high-value metals. Efforts to localize the supply chain are aimed at reducing mineral import costs, which totaled between $20 billion and $24 billion in 2024, according to the General Authority for Statistics. Saudi Arabia's geographic proximity to Europe, Asia, and Africa provides a competitive advantage for mineral exports. However, the sector's expansion will require the continued implementation of predictable and transparent regulations, particularly with respect to international contracting and foreign investment partnerships. Significant untapped mineral potential remains. The Kingdom's mineral resource base is now estimated at SAR 9.375 trillion ($2.5 trillion), up 90% from the 2016 estimate of SAR 5 trillion ($1.3 trillion), following the discovery of rare earth elements, transition metals, and substantial increases in phosphate, copper, zinc, and gold reserves.
Zawya
24-04-2025
- Business
- Zawya
Saudi Arabia doubles down on mining, says report
Saudi Arabia's long-term economic growth will increasingly rely on the metals and mining sector, says an S&P Global report. This development is in line with the Vision 2030 programme, which aims to reduce the country's oil dependency, it says. "Saudi Arabia's proactive measures and substantial resources may help offset continued cost pressures and support the resilience of metals and mining companies' credit profiles," S&P Global Ratings credit analyst Hina Shoeb says. Unlike some global peers, Saudi metals and mining companies benefit from strong government support, new regulatory frameworks--such as the Mining Investment Law--and significant government-led capital investments in mega projects and domestic infrastructure, the report says. "We expect these initiatives will spur domestic demand for metals, reduce import dependency, and over time improve the sector's operational efficiency. They will also support the domestic metals and mining sector's capacity to meet rising global demand, notably for base metals and minerals," the report continues. Yet the sector suffers from strict regulations, harsh operating and environmental conditions, insufficient infrastructure, global commodity price fluctuations, and stiff competition, it notes. The mining sector currently accounts for about 1.5% of Saudi Arabia's GDP. The Saudi government aims to increase mining companies' GDP contribution to $75 billion by 2030, from approximately $17 billion in 2024, it says. The country boasts large reserves of metals and minerals that the world needs in large quantity in the future. Base metals--including copper, nickel, and lithium--are critical for the energy transition, while minerals, for example phosphate fertilisers, are essential for food safety. Saudi Arabia's internal industrial growth is central to this transformation. "We expect that sustained momentum in Vision 2030 investments and associated activity in construction, logistics, domestic manufacturing, and mining will lead to an average headline GDP growth of about 4% over 2025-2028," the report says. The Saudi government aims to invest $40 billion annually in local giga and mega projects via the Public Investment Fund (PIF). As investments in infrastructure and manufacturing rise, local demand for metals will increase substantially, it says. Government initiatives, such as the investment of close to SAR29 billion ($7.7 billion) in the Wa'ad Al-Shamal project, with a focus on phosphates and a $100 billion funding plan targeting critical minerals by 2035, intend to reduce import dependency and stimulate domestic production. These funding measures are critical to support Saudi Arabia's internal growth and, with that, its economic diversification. Industrial growth could fuel domestic demand Domestic industrial expansion is key to increase the local demand for metals. Giga projects--such as Neom, Red Sea, Qiddiya, Roshn, and Diriyah, among others--can transform Saudi Arabia's urban landscapes and boost the demand for construction materials and high-value metals. For example, Neom's integrated industrial clusters and Qiddiya's focus on sectors such as entertainment, travel and tourism, utilities, hospitality, and transportation are projected to ramp up the local consumption of steel, aluminum, and copper. These projects, which benefit from funding and infrastructure investments, aim to reduce the country's import costs for metals (including iron, steel, precious and semi-stones), by creating a solid domestic market for metals and minerals. Import costs stood at about $20 billion- $24 billion for 2024 as per the General Authority for Statistics (GASTAT). Saudi Arabia's metals and mining sector also benefits from the country's geographic position, with access to important markets in Europe, Asia, and Africa representing a competitive advantage. Still, the large scale development of the sector hinges on the implementation of clear and predictable regulations, notably on openness in international contracts, or ease for foreign investors to partner with local companies and government entities to gain access to resources, expertise, and market knowledge. Untapped reserves spell opportunity Saudi Arabia possesses vast, yet underexploited, mining and mineral resources. Current estimates value these reserves at approximately SAR9.375 trillion ($2.5 trillion), marking a 90% increase from the valuation of SAR5 trillion ($1.3 trillion) in 2016. This upward revision incorporates newly discovered rare earth elements and transitional metals, along with significant increases in phosphate ore, copper, zinc, and gold reserves. Saudi Arabia's Western Region--dominated by the Arabian Shield, the Red Sea coastal plain, and volcanic fields--hosts most of the country's mines, while the northern area is rich in phosphate deposits. These geological advantages provide a solid foundation for future exploration and production activities. - Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Arab News
24-04-2025
- Business
- Arab News
Saudi Arabia ramps up mining investment as sector outpaces global peers
RIYADH: Saudi Arabia's mining sector is emerging as a global standout, supported by regulatory reforms, major investment, and a strong pipeline of domestic projects, a new analysis said. In a report titled 'Saudi Arabia Doubles Down on Mining,' S&P Global Ratings said the sector is poised for rapid expansion, with its contribution to gross domestic product expected to surge from $17 billion in 2024 to $75 billion by 2030, under the government's Vision 2030 strategy. Saudi Arabia's mining ambitions are anchored in its substantial natural endowments and reinforced by robust government support. The country holds an estimated SR9.37 trillion ($2.5 trillion) in mineral reserves — a 90 percent increase on a 2016 forecast — thanks to new discoveries of rare earth elements, base metals, and expanded phosphate and gold deposits. Hina Shoeb, credit analyst at S&P Global Ratings, said: 'Saudi Arabia's proactive measures and substantial resources may help offset continued cost pressures and support the resilience of metals and mining companies' credit profiles.' The agency noted that unlike many global peers, Saudi Arabia's metals and mining companies benefit from strong government support, a modern regulatory framework — including the Mining Investment Law — and substantial state-led investment in mega projects and infrastructure. The number of exploitation licenses has increased by 138 percent since 2021, and exploration permits rose from 58 to 259, driven by the law's transparency and investor-friendly policies. Flagship state-owned enterprise Ma'aden reported SR32 billion in 2024 revenues, with a diversified portfolio spanning gold, phosphate, aluminum, and base metals. Its gold output alone reached 450,000 ounces, while phosphate production surpassed 6.5 million tonnes. The number of exploration firms has grown from just six in 2020 to 133 in 2023. 'As budgets continue to increase, the likelihood of discovering additional resources and expanding existing operations supports our view of sustainable, long-term growth of Saudi Arabia's metals and mining industry,' the report said. The Vision 2030 framework has driven a shift away from oil dependency, focusing instead on sectors like mining, tourism, and manufacturing. The mining sector alone contributed about $400 million in revenues as of 2023 and is now backed by a $100 billion investment plan targeting critical minerals by 2035. Government funding also includes a SR29 billion commitment to the Wa'ad Al-Shamal phosphate project. Saudi Arabia's geography offers logistical advantages with access to European, Asian, and African markets, while mega projects such as NEOM and Qiddiya are expected to drive up local demand for construction materials and high-value metals. These projects, the report stated, 'which benefit from funding and infrastructure investments, aim to reduce the country's import costs for metals, including iron, steel, precious and semi-stones, by creating a solid domestic market for metals and minerals.' However, the report also notes infrastructure and labor as potential bottlenecks. Many deposits are in remote desert regions lacking adequate transportation and water infrastructure. Additionally, the sector's expansion will require substantial investments in workforce training to avoid high labor costs from foreign recruitment. S&P states that Saudi Arabia's commitment to financial discipline, low debt levels in the sector, and targeted policy support position the Kingdom's mining industry to grow sustainably — even amid volatile commodity markets. 'We expect these initiatives will spur domestic demand for metals, reduce import dependency, and over time improve the sector's operational efficiency,' S&P added.
Trade Arabia
24-04-2025
- Business
- Trade Arabia
Saudi Arabia doubles down on mining, says report
Saudi Arabia's long-term economic growth will increasingly rely on the metals and mining sector, says an S&P Global report. This development is in line with the Vision 2030 programme, which aims to reduce the country's oil dependency, it says. "Saudi Arabia's proactive measures and substantial resources may help offset continued cost pressures and support the resilience of metals and mining companies' credit profiles," S&P Global Ratings credit analyst Hina Shoeb says. Unlike some global peers, Saudi metals and mining companies benefit from strong government support, new regulatory frameworks--such as the Mining Investment Law--and significant government-led capital investments in mega projects and domestic infrastructure, the report says. "We expect these initiatives will spur domestic demand for metals, reduce import dependency, and over time improve the sector's operational efficiency. They will also support the domestic metals and mining sector's capacity to meet rising global demand, notably for base metals and minerals," the report continues. Yet the sector suffers from strict regulations, harsh operating and environmental conditions, insufficient infrastructure, global commodity price fluctuations, and stiff competition, it notes. The mining sector currently accounts for about 1.5% of Saudi Arabia's GDP. The Saudi government aims to increase mining companies' GDP contribution to $75 billion by 2030, from approximately $17 billion in 2024, it says. The country boasts large reserves of metals and minerals that the world needs in large quantity in the future. Base metals--including copper, nickel, and lithium--are critical for the energy transition, while minerals, for example phosphate fertilisers, are essential for food safety. Saudi Arabia's internal industrial growth is central to this transformation. "We expect that sustained momentum in Vision 2030 investments and associated activity in construction, logistics, domestic manufacturing, and mining will lead to an average headline GDP growth of about 4% over 2025-2028," the report says. The Saudi government aims to invest $40 billion annually in local giga and mega projects via the Public Investment Fund (PIF). As investments in infrastructure and manufacturing rise, local demand for metals will increase substantially, it says. Government initiatives, such as the investment of close to SAR29 billion ($7.7 billion) in the Wa'ad Al-Shamal project, with a focus on phosphates and a $100 billion funding plan targeting critical minerals by 2035, intend to reduce import dependency and stimulate domestic production. These funding measures are critical to support Saudi Arabia's internal growth and, with that, its economic diversification. Industrial growth could fuel domestic demand Domestic industrial expansion is key to increase the local demand for metals. Giga projects--such as Neom, Red Sea, Qiddiya, Roshn, and Diriyah, among others--can transform Saudi Arabia's urban landscapes and boost the demand for construction materials and high-value metals. For example, Neom's integrated industrial clusters and Qiddiya's focus on sectors such as entertainment, travel and tourism, utilities, hospitality, and transportation are projected to ramp up the local consumption of steel, aluminum, and copper. These projects, which benefit from funding and infrastructure investments, aim to reduce the country's import costs for metals (including iron, steel, precious and semi-stones), by creating a solid domestic market for metals and minerals. Import costs stood at about $20 billion- $24 billion for 2024 as per the General Authority for Statistics (GASTAT). Saudi Arabia's metals and mining sector also benefits from the country's geographic position, with access to important markets in Europe, Asia, and Africa representing a competitive advantage. Still, the large scale development of the sector hinges on the implementation of clear and predictable regulations, notably on openness in international contracts, or ease for foreign investors to partner with local companies and government entities to gain access to resources, expertise, and market knowledge. Untapped reserves spell opportunity Saudi Arabia possesses vast, yet underexploited, mining and mineral resources. Current estimates value these reserves at approximately SAR9.375 trillion ($2.5 trillion), marking a 90% increase from the valuation of SAR5 trillion ($1.3 trillion) in 2016. This upward revision incorporates newly discovered rare earth elements and transitional metals, along with significant increases in phosphate ore, copper, zinc, and gold reserves. Saudi Arabia's Western Region--dominated by the Arabian Shield, the Red Sea coastal plain, and volcanic fields--hosts most of the country's mines, while the northern area is rich in phosphate deposits. These geological advantages provide a solid foundation for future exploration and production activities.
Arabian Business
19-03-2025
- Business
- Arabian Business
Saudi Arabia issues exploration licences as it looks to tap $2.5tn mineral resources
Saudi Arabia has granted exploration licences to two companies as it looks to utilise an estimated SR9.3tn ($2.5tn) bed of mineral resources in the Kingdom. The Ministry of Industry and Mineral Resources announced that several local and international companies have won exploration licenses for the first-of-their-kind mineralised belts in the Kingdom at the Jabal Sayid and Al Hajjar sites, covering an area of 4,788sq km. This initiative is part of the ministry's plan to accelerate the exploration and utilisation of the Kingdom's mineral resources, estimated at SR9.3tn ($2.5tn). Mining in Saudi Arabia The Ministry of Industry and Mineral Resources, in collaboration with the Ministry of Investment, launched the second phase of the 'Mining Exploration Enablement' program to support exploration activities and reduce risks for exploration companies in their early stages. Moreover, the Kingdom offers various incentives under the Mining Investment Law, including allowing 100 per cent foreign ownership of companies and providing financing of up to 75 per cent of capital costs through the Saudi Industrial Development Fund (SIDF). These competitions are part of the Ministry of Industry and Mineral Resources' efforts to achieve the objectives of the overall strategy for the mining and mineral industries sector, in line with Saudi Vision 2030. The strategy aims to maximise the utilisation of mineral resources and strengthen the mining sector as a key pillar of the national economy. The Ministry of Industry and Mineral Resources announced during the fourth edition of the Future Minerals Forum, held last January, the offering of 50,000sq km of mineralised belts containing gold, copper, and zinc. This initiative is part of the ministry's efforts to enhance exploration and create an attractive investment environment for local and international mining companies. Applications for these opportunities can be submitted through the 'Ta'adeen' platform.
