Saudi Arabia moves to tap its mineral reserves, invites bids for gold and copper mines

In a significant push to unlock the economic potential of its vast mineral resources, Saudi Arabia has announced the opening of bids for exploration licences at seven new mining sites, according to a report by state-run Saudi Press Agency (SPA).

These locations, rich in precious and base metals such as gold, silver, copper, and zinc, cover nearly 1,000 square kilometres across various regions of the kingdom.

This initiative is a crucial step in Saudi Arabia’s broader strategy to diversify its economy and reduce its dependence on oil revenues, aligning with the goals outlined in Vision 2030.

The Saudi Ministry of Industry and Mineral Resources made the announcement on Wednesday, officially inviting interested parties to submit their proposals by early September 2024.

The exploration licences being offered are part of the kingdom’s SAR9.3tn($2.5tn) mining sector, which the government is keen to develop into a major contributor to the national economy.

Locations for mining exploration

The seven sites up for bidding are strategically distributed across the kingdom, each holding significant deposits of valuable minerals.

1. Among them is the Umm Qasir site in the Riyadh region, which spans 20 square kilometres and contains deposits of gold, silver, lead, and zinc.
2. Another notable site is Jabal Sabha, also in Riyadh, where 171 square kilometres of land are believed to house reserves of silver, lead, zinc, and cobalt.
3. In the Aseer region, the Wadi Ad Dawsh site, covering 157.7 square kilometres, is rich in gold, silver, and copper.
4. Similarly, the Shaib Marqan area in Riyadh, encompassing 92 square kilometres, holds promising deposits of gold, silver, and copper.
5. Other significant sites include Wadi Al Junah in Aseer, with 425.37 square kilometres containing copper, silver, zinc, and gold.
6. Hazm Shubat in Aseer, spanning 93.47 square kilometres with gold reserves.
7. Huwaymidan in Makkah, covering 34 square kilometres is also known for its gold deposits.

Ma’aden’s dominance in Saudi mining

Saudi Arabia’s leading mining company, the Saudi Arabian Mining Company (Ma’aden), currently holds the rights to several key mining sites across the kingdom. Ma’aden operates seven gold mines, in addition to a copper mine through a joint venture with Barrick Gold Corporation.

Among Ma’aden’s prominent operations is the Al Duwaihi mine in the Makkah region, an open-pit mine that began production in 2016. This mine alone produced 174,799.86 ounces of gold in 2022.

The Al Amar Mine, located in the Arabian Shield, has been operational since 2009 and is known for producing high-quality gold ore, which is processed into Dore, as well as copper and zinc concentrates for export. In 2022, the Al Amar Mine produced 27,443.42 ounces of gold.

The Bulghah and Sukhaybarat Mines, situated in Al Madinah and Al Qassim regions respectively, are also significant contributors to the kingdom’s gold production. These open-pit mines together produced approximately 74,372.25 ounces of gold in 2022.

Other notable sites include the As Suq Mine, which commenced production in 2014 and yielded 17,042.39 ounces of gold in 2022, and the historic Mahd Ad Dhahab Mine, which produced
29,566.34 ounces of gold last year.

Ma’aden’s newest and most technologically advanced operation, the Mansourah and Massarah Mine, also in the Makkah region, represents the future of gold mining in Saudi Arabia. This site, which began production in September 2022, has a capacity of 250,000 ounces of gold annually, making it a cornerstone of the kingdom’s mining ambitions.

Joint ventures

In addition to its domestic operations, Ma’aden has entered into a joint venture with Barrick Gold Corporation to operate the Jabal Sayid underground copper mine.

This partnership, known as the Ma’aden Barrick Copper Company (MBCC), began production in 2016, exporting copper concentrate to international markets.

In 2022, the Jabal Sayid mine processed 2.732 million tonnes of ore, yielding 150.7 million pounds of copper.

Expanding minerals sector

Saudi Arabia has nearly doubled its estimates for the value of its untapped mineral resources in recent years. As of 2023, the kingdom’s mineral reserves are estimated to be worth $2.5tn, up from $1.3tn in 2016. These resources include not only gold and copper but also phosphate and rare earth elements, positioning Saudi Arabia as a significant player in the global mining industry.

The Saudi government has made substantial progress in attracting investment to this sector.

In January 2023, the kingdom secured deals worth $20bn at its annual minerals forum. Saudi Minister of Industry and Mineral Resources, Bandar Al Khorayef, credited recent reforms to the kingdom’s laws and business practices for this success, highlighting the issuance of over 4,500 mining licences in just two years.

Looking ahead, Saudi Arabia plans to award more than 30 additional mining exploration licences to foreign investors in 2024.

The kingdom’s gold discoveries, announced in 2023, in the Makkah region have already sparked speculation that Saudi Arabia could emerge as a major regional producer of the precious metal.

Ma’aden’s recent exploration programme uncovered high-grade gold deposits along a 100-kilometre strip south of its Mansourah-Massarah gold mine, with samples indicating significant ore densities.

Economic diversification

As part of its Vision 2030 initiative, Saudi Arabia is actively seeking to diversify its economy by developing the mining sector. The kingdom aims to triple the sector’s contribution to the national GDP by the end of the decade.

The Saudi mining sector, one of the fastest growing sectors in the world 🇸🇦 pic.twitter.com/Fcjd1DmNo7

— وزارة الصناعة والثروة المعدنية (@mimgov) June 10, 2024

Gold mining, in particular, is seen as a key driver of this diversification, with the potential to generate substantial revenue and attract foreign direct investment.

Currently, the top gold producing countries include China, Russia, the US, Australia and Canada.

Read: Saudi mining firm Ma’aden’s profits surge 160% in first half of 2024