Omani ministry signs nickel extraction agreement with UK’s Knights Bay

Oman’s Ministry of Energy and Minerals signed a mining concession agreement with British company Knights Bay to extract nickel and its derivatives with high purity.

The agreement is to obtain a concession right in mining area No. 21, located in the Wilayat of Ibra in the North A’Sharqiyah governorate. It is the first mining agreement with a foreign investor.

The extraction process will be carried out without any carbon emissions (zero carbon).

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Dr. Salah bin Hafeedh Al Dahab, Director General of Investment at the Ministry of Energy and Minerals, said that this agreement comes in line with the government’s approach to allocate mining concession areas to develop investment in the mineral sector.

Initial investments related to the exploration and appraisal phase are estimated at around $25m to $30m in the first three years, to be spent to cover an area of 1,444 square kilometres, Oman News Agency quoted the director general as saying on Thursday.

This phase includes geological surveys and drilling of a number of exploratory and appraisal wells, as well as chemical analysis to confirm the quantities of mineral reserves, he added.

Meanwhile, Brian Spratley, board chairman at Knights Bay said that the company seeks, through the agreement, to build, develop and process battery minerals (nickel and cobalt) in Oman to meet the global demand for nickel through electric vehicle (EV) manufacturers.

Nickel is a versatile metals and its uses vary from the stainless steel sector to EV production. A shift towards electrification in the automotive industry is rapidly scaling the demand for nickel.

According to Statista, the global demand for nickel to be used in electric vehicle batteries amounted to 60,000 metric tons in 2018, and is expected to increase to some 665,000 tons worldwide by 2025.

Oman, the largest non-OPEC oil producer in the Middle East, is also looking to diversify its economy. Last month, the sultanate and Saudi Arabia signed 13 investment MoUs between the public and private sectors of the two countries covering various sectors.

Read: Saudi Arabia, Oman sign 13 investment agreements, value exceeds SAR1bn