From Saudi Arabia to Morocco, Arab countries are looking at the mining sector as a potential source for economic diversification and job creation.
KSA, the world’s biggest oil exporter, is now undertaking several projects with the aim of making mining its third economic pillar, after energy and petrochemicals.
Morocco, which boasts 75 per cent of the world’s phosphate rock reserves, will spend $8.6 billion in the next decade to ramp up phosphate production from an estimated 28 million tonnes in 2011 to 55 million tonnes by 2020.
State-run Saudi Arabian mining Company (Ma’aden) has been producing precious and base metals, mainly gold and silver, for over two decades, but this year it began producing phosphate, with a new target of three million tonnes per annum – part of a $5.6 billion joint venture between Ma’aden and SABIC, the world’s biggest petrochemical producer. The mining firm is also undertaking a $10.8 billion aluminum project to produce bauxite, build an alumina refinery, a smelter and a rolling mill by 2014.
Ma’aden is working in parallel to beef up its precious metals production with two new mines, and is also considering the development of three more mines to double gold production to 400,000 ounces per annum from 2015. The firm is also looking at increasing production of other highly-valued metals such as copper, and possibly diamonds. “There are very initial indications about diamonds, but I will not be over optimistic about it,” said Hany al-Dabbagh, vice-president of precious metals and exploration, Ma’aden, at the MENA mining Congress.
Meanwhile, Egypt is working to rekindle foreign investor interest despite the ongoing political upheaval and fears over the dishonouring of contracts signed by the fallen regime. Fekry Yousuf, chairman of the Egyptian Mineral Resources Authority, assured attendees of the MENA mining congress that all signatures will be honoured. He also said that the country is still forging ahead with projects to boost the mining sector’s contribution to GDP to between eight and 10 per cent from around one per cent today.
Egypt, which is currently producing gold, is actively seeking foreign investors to assist with the development of copper, phosphate, lead and zinc.
In Morocco, mining contributed around six per cent of the GDP and 27 per cent of the total value of national exports in 2010, attributable in large part to the country’s phosphate production, which reached 26.6 million tonnes in 2010. The phosphate reserves of Morocco and the Western Sahara were recently revised up to 50 billion tonnes, out of total world reserve of 65 billion tonnes, according to the US Geological Survey report published in January last year.
While Morocco’s phosphate production is a state-monopoly, the North African country is seeking foreign investors to help explore and produce other metals and minerals including lead, zinc, copper and silver.
“For the development of its mining sector, Morocco is undertaking the development of a new strategy based on mining concessions and exploration, attracting international investors and increasing local contribution, development of mining and production capacity, strengthening of mining promotion and the adjustment of current mining laws,” said Addi Azza, general engineer at the ministry of Energy, Mines, Water and Environment.
Morocco’s vast mineral wealth is attracting foreign mining firms, including Indonesia’s Earthstone Group, which expects to start commercial production of iron ore next year.
“When we look at all countries [in the Middle East], they are all rich in minerals. The major variable is the attitude of the government to investors,” said Vladimir Kuznetsov, an Earthstone board member. “Here in the MENA countries, you need to go to the ministries to ask for all the documents, where is e-government? once you get this information picture, then you are able to make a qualified decision on where to go.”