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Saudi Energy Consortium to Obtain USD 5.6 Billion for Financial Closure

Saudi ports handled 814,000 standard containers in August, including transshipment containers. (SPA)
Saudi ports handled 814,000 standard containers in August, including transshipment containers. (SPA)
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Saudi Energy Consortium to Obtain USD 5.6 Billion for Financial Closure

Saudi ports handled 814,000 standard containers in August, including transshipment containers. (SPA)
Saudi ports handled 814,000 standard containers in August, including transshipment containers. (SPA)

Information on Tuesday revealed that the consortium of companies owning the Jazan Gasification and Energy Production Complex in Jazan Economic City, which includes the oil giant Aramco, is in the process of obtaining financing worth about USD 5.6 billion for the financial closure.

Sources quoted by CNBC Arabia said that the total debt in financing the project amounted to about USD 7.2 billion, while the other part would be financed through a soft loan from the Saudi Industrial Development Fund, at a value of USD 1.6 billion.

According to the sources, around 22 local banks will compete to provide financing. Standard Chartered and French Capital would provide financial advisory services, while White & Case would present deliver advisory services to Aramco.

According to official data, the ownership structure of the project is distributed to the American company Air Products by about 46%, Aramco by about 20%, and ACWA Power by about 25%.

The new project – an integrated power plant with gasification and combined cycle technologies in Jazan – will have a production capacity of around 3800 megawatts of electricity, about 184,000 cubic meters of hydrogen per hour, and steam at about 585,000 tons per hour.

Meanwhile, Saudi ports handled 814,000 standard containers in August, including transshipment containers, registering an increase of 20.4 percent, by more than 457,000 standard containers. Cargo handled amounted to more than 25 million tons, while the number of ships witnessed an increase of 8.1 percent, by 1,119 ships.

According to the statistical index issued by the General Authority of Ports, Saudi Ports achieved a remarkable increase of 134.7% in the total number of passengers (by 70,000 passengers), in addition to a rise in the number of cars by 61.7 percent, representing an increase of 74,000 cars.

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Business

UN Says Solutions Exist to Rapidly Ease Debt Burden of Poor Nations

UNCTAD's Rebeca Grynspan compared the debt burden facing poorer countries to "a reverse blood transfusion". Fabrice COFFRINI / AFP
UNCTAD's Rebeca Grynspan compared the debt burden facing poorer countries to "a reverse blood transfusion". Fabrice COFFRINI / AFP
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UN Says Solutions Exist to Rapidly Ease Debt Burden of Poor Nations

UNCTAD's Rebeca Grynspan compared the debt burden facing poorer countries to "a reverse blood transfusion". Fabrice COFFRINI / AFP
UNCTAD's Rebeca Grynspan compared the debt burden facing poorer countries to "a reverse blood transfusion". Fabrice COFFRINI / AFP

The heavy debt weighing on developing countries can be alleviated through readily available measures, the UN's trade and development chief said, pleading for bold international action.
Rebeca Grynspan compared the debt burden facing poorer countries to "a reverse blood transfusion", with money flowing "from the ones that need it to the ones that don't".
In 2022 -- the last year for which there are clear statistics -- developing countries "paid almost $50 billion more to their external creditors than they received in fresh disbursements", UNCTAD said in a recent report.
"What we need to be aware of is that the markets are not in distress, people are," Grynspan told AFP in an interview this week. "We are in a debt crisis."
The former Costa Rican vice president and government minister pointed out that it was "the small and medium-sized countries that don't move the markets, that are the ones that are in the distress".
They are "in a situation where they are spending more on their debt than on human development, on their own health or education" systems.
'Too slow'
UNCTAD, she said, estimated that currently "there are 52 countries that are either in debt distress or on the brink of debt distress".
Grynspan said she planned to address the issue during this week's meetings of the International Monetary Fund and World Bank in Washington.
Grynspan, who in 2021 became the first woman to lead the agency, has raised its profile by participating in G20 meetings, and also by representing the UN on difficult briefs.
She has among other things played a vital role in negotiations towards ensuring the continued export of fertilizers from Russia -- vital for global food security.
There have been numerous efforts over the decades to resolve debt problems weighing on poor countries, but Grynspan said they have been so slow and complicated that they often act as a "deterrent".
"Countries think twice before they go into a restructuring process that takes so long," she said, so "they prefer to pay, although the cost and pain is so big".
"It's a huge cost for the population."
Grynspan hailed efforts underway to lessen the burden on countries appealing for aid, including an IMF call to speed up the treatment of debt relief applications.
She stressed though that "these are ad hoc mechanisms".
In the long term, "we need an internationally-agreed, stable mechanism for debt restructure."
'Great relief'
Some countries do not have the luxury of waiting for the creation of such a mechanism, and need immediate relief, she said.
Grynspan highlighted that the dire situations many countries face stem more from cascading crises suffered during the Covid-19 pandemic than from government mismanagement.
"So there is a reason and a rationale for the international community to come with much more help and support for these countries," she said.
"A low-hanging fruit," she said, would be to remove the surcharges that 17 countries currently pay to the IMF.
Exempting them from those charges, which are aimed at encouraging countries to quickly exit IMF assistance, would swiftly free up $2 billion, according to Grynspan.
That money, she said, could provide "great relief" if used towards "the needs of the people of these countries".
She also hailed an idea put forward by the World Bank, the Inter-American Development Bank and its African counterpart to provide guarantees to "really lower the premium of the interest rates in the developing countries" to attract private investment.
And she suggested accelerating the IMF's Resilience and Sustainability Trust (RST), aimed at helping vulnerable countries build resilience to shocks, including from climate change.
Other interesting proposals, she said, included to swap debt for nature, and to automatically suspend interest payments for countries hit by natural disasters.
"Those are things that can be decided today," Grynspan said.
"We don't have to wait a decade to have results."

Business

11.2 Million Saudis Join Private Employment Market

According to the Labor Observatory statistics, the total number of workers in the private sector reached about 10.9 million. (SPA)
According to the Labor Observatory statistics, the total number of workers in the private sector reached about 10.9 million. (SPA)
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11.2 Million Saudis Join Private Employment Market

According to the Labor Observatory statistics, the total number of workers in the private sector reached about 10.9 million. (SPA)
According to the Labor Observatory statistics, the total number of workers in the private sector reached about 10.9 million. (SPA)

A new report has shown that the Saudi private sector employment market has for the first time incorporated over 11.2 million employees, 8.8 of whom are expatriates and 2.3 million are Saudi nationals.
The increase in the number of Saudis in the employment market comes at a time when the unemployment rate among Saudis recorded the lowest level at 7.7 percent during the last quarter of 2023.
This is very close to the Vision 2030 unemployment target of 7 percent, thanks to the increase in the number of female workers and the government’s efforts to create more job opportunities for Saudis.
In its statistical figures, the National Labor Observatory said on Wednesday that over 28.1 thousand citizens joined, for the first time, the private sector’s labor force last March.
According to the Observatory, 9.9 million employees in the private sector are males, while the number of females touched 1.3 million.

Business

UAE, Costa Rica Sign Trade Deal

The UAE and Costa Rica signed a Comprehensive Economic Partnership Agreement (CEPA) during a virtual ceremony. WAM
The UAE and Costa Rica signed a Comprehensive Economic Partnership Agreement (CEPA) during a virtual ceremony. WAM
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UAE, Costa Rica Sign Trade Deal

The UAE and Costa Rica signed a Comprehensive Economic Partnership Agreement (CEPA) during a virtual ceremony. WAM
The UAE and Costa Rica signed a Comprehensive Economic Partnership Agreement (CEPA) during a virtual ceremony. WAM

The United Arab Emirates and Costa Rica have signed an agreement that will help improve bilateral trade and investment ties, UAE President Sheikh Mohammed bin Zayed Al Nahyan said on Thursday.

The Gulf and Central American countries signed a Comprehensive Economic Partnership Agreement (CEPA) during a virtual ceremony, the president said in a post on social media platform X.

CEPAs signed by the UAE are broad free trade agreements that typically also include clauses covering investment and services.

“The agreement, which was signed by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, and Manuel Tovar, Minister of Foreign Trade of Costa Rica, heralds a new era of bilateral cooperation between the two countries. It will also enhance trade flows, increase private-sector collaboration, and provide new opportunities for investment, particularly in priority sectors such as logistics, energy, aviation, tourism, and infrastructure development,” UAE's state news agency (WAM) said.

Bilateral non-oil trade between the two countries was worth $65 million in 2023, up 7% on the previous year, according to the report carried by WAM on the CEPA signing.

Sheikh Mohamed welcomed the agreement as a new chapter in UAE-Costa Rican economic relations.

He highlighted the importance of trade to international cooperation, particularly in the pursuit of secure, resilient supply chains and solutions to pressing global issues such as climate change and food security.

Business

Oil Stabilizes after Sharp Drop on Demand Concerns, Easing of Middle East Tension

Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato
Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato
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Oil Stabilizes after Sharp Drop on Demand Concerns, Easing of Middle East Tension

Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato
Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato

Oil prices were little changed after a 3% drop in the previous session as the market remains concerned about demand this year and on signs that a wider conflict in the key Middle East producing region could be avoided.
Brent futures were up 13 cents, or 0.15%, at $87.42 a barrel, while US West Texas Intermediate (WTI) crude futures traded 6 cents higher, up 0.07%, at $82.75 a barrel at 0636 GMT.
The two benchmarks slid 3% in the previous session on signs that fuel demand this year is lower than expected amid flagging economic growth in China and as oil inventories in the US, the world's biggest crude consumer, rose.
Analysts at JP Morgan highlighted in a note late on Tuesday that worldwide oil consumption so far in April has been 200,000 barrels per day (bpd) below its forecast, averaging 101 million bpd. From the start of the year, demand has risen by 1.7 million bpd, down from its forecast in November of 2 million bpd.
At the same time, investors are discounting the chance that Israel will strongly retaliate against Iran's missile and drone attack on April 13, which was prompted by Israel's alleged killing of Iranian military leaders at a Syrian diplomatic site on April 1.
Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries, according to Reuters data, and an easing of its conflict with Israel would reduce the potential for supply disruptions in the Middle East.
"Brent is now back to levels before the April 1 attack on the Iranian consulate, suggesting that the latest bout of risk premium from heightened Israel-Iran tensions has eroded," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Surging US crude inventories also kept a lid on prices. Oil inventories rose by 2.7 million barrels to 460 million barrels in the week ending April 12, the Energy Information Administration said, nearly double analysts' expectations in a Reuters poll for a 1.4 million-barrel build.
Stockpiles built as refinery utilization declined at a time when processing typically rises ahead of summer driving demand in the US.
Gasoline stocks fell by 1.2 million barrels in the week to 227.4 million barrels, the EIA said
Distillate stockpiles, which include diesel and heating oil, fell by 2.8 million barrels to 115 million barrels, versus expectations for a 300,000-barrel drop, the EIA data showed.
"A bearish EIA inventory report appears to have been the perfect opportunity for investors to lock in profits after the recent gains," Daniel Hynes, the senior commodity strategist at ANZ, said in a note on Thursday.

Business

US to Reimpose Oil Sanctions on Venezuela

FILE PHOTO: El Palito refinery of the Venezuelan state oil company PDVSA is seen, in Puerto Cabello, Venezuela February 10, 2024. REUTERS/Leonardo Fernandez Viloria/File Photo
FILE PHOTO: El Palito refinery of the Venezuelan state oil company PDVSA is seen, in Puerto Cabello, Venezuela February 10, 2024. REUTERS/Leonardo Fernandez Viloria/File Photo
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US to Reimpose Oil Sanctions on Venezuela

FILE PHOTO: El Palito refinery of the Venezuelan state oil company PDVSA is seen, in Puerto Cabello, Venezuela February 10, 2024. REUTERS/Leonardo Fernandez Viloria/File Photo
FILE PHOTO: El Palito refinery of the Venezuelan state oil company PDVSA is seen, in Puerto Cabello, Venezuela February 10, 2024. REUTERS/Leonardo Fernandez Viloria/File Photo

The Biden administration will reimpose oil and gas sanctions on Venezuela after President Nicolas Maduro failed to comply with a US-backed agreement to allow free and fair elections this year.

Barring any last-minute concessions by Maduro, the US has made clear it is not likely to renew a six-month license that granted the OPEC member partial sanctions relief from October, following an election deal reached between the government and the Venezuelan opposition. It expires just after midnight EST (0400 GMT on Friday).

Washington had repeatedly threatened in recent months to reinstate punitive measures on Venezuela's vital oil and gas sector unless Maduro made good on his promises, including allowing the opposition to run the candidate of its choice against him in the July 28 election.

Maduro's government has complied with some of the terms of the deal, signed in Barbados. The Venezuelan President on Tuesday accused Washington of blackmail over sanctions.

The withdrawal of the most significant element of US sanctions relief would mark a major step back from US President Joe Biden's policy of re-engagement with the Maduro government.

But the Biden administration is expected to stop short of a full return to the “maximum pressure” campaign waged under former US President Donald Trump, according to people familiar with the matter.

Weighing on the US decision have been concerns about whether reimposing sanctions on Venezuela's energy sector could spur higher global oil prices and increase the flow of Venezuelan migrants to the US-Mexico border as Biden campaigns for reelection in November.

“We have made very clear that if Maduro and his representatives did not fully implement their agreements under the Barbados agreement, we would reimpose sanctions, and I would just say stay tuned,” US State Department spokesperson Matthew Miller told a daily briefing in Washington on Tuesday. He declined to elaborate.

Maduro's government has repeatedly reacted with defiance the Washington's warnings.

“International companies continue coming to Venezuela,” Venezuelan Oil Minister Pedro Tellechea said in Caracas. “With or without sanctions, Venezuela will be respected.”

Venezuela's oil exports in March rose to their highest level since early 2020 as customers rushed to complete purchases ahead of the possible return of sanctions, Reuters reported this month.

Deliberations on Sanctions Options

Deliberating on how far to go, Biden's aides had discussed a range of options ahead of the expiration of the US Treasury license that has allowed Venezuela to freely sell its crude, US sources said.

Among the steps they considered was allowing Venezuela to continue shipping oil but reimposing a ban on the use of US dollars in such transactions.

Failure to renew the current license would not rule out the possibility that the US could at some point issue a new version to replace it if Maduro starts to give ground on electoral commitments.

Without a general license, however, most foreign partners of Venezuela's state-run oil firm PDVSA may have no other option but to increase pressure for individual US authorizations, which they have been seeking for years.

The Biden administration initially re-engaged diplomatically with Maduro when the US was looking for ways to get more oil on world markets to offset the rise in crude prices from Western sanctions imposed on Russia over its 2022 invasion of Ukraine. Those contacts led to a deal for easing some of the harsh Trump-era sanctions on Caracas.

Earlier, a group of Republican US senators sent a letter to Biden urging his administration not to renew the license. “We must not cede American leverage by lifting US sanctions while the Maduro government deliberately disregards its obligations,” the senators said.

Business

Japan Oil Refiners to Tap Reserves in Case of Middle East Disruption

Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato
Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato
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Japan Oil Refiners to Tap Reserves in Case of Middle East Disruption

Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato
Men work at an oil refinery in Sodegaura, Japan February 8, 2017. Reuters/Issei Kato

Japanese oil refiners see no immediate impact from escalating tensions in the Middle East on their crude procurement, but will use the country's reserves in case of contingencies to ensure stable oil supplies, said the president of Petroleum Association of Japan (PAJ), Shunichi Kito.

“We don't believe that there are any obstacles to the procurement of crude oil to Japan for now,” Kito told a news conference on Wednesday, when asked about the impact of the Iranian counter-attack on Israel over the weekend.

But he acknowledged that if the conflict were to escalate and affect the broader Middle East it would pose a serious problem.

“In case of any disruption in crude oil supply, it is important to be prepared by making flexible use of the oil reserve to ensure that the oil supply will not be disrupted,” he said, noting Japan's public and private sectors have a combined 240-day oil reserve.

Japan relies heavily on Middle Eastern crude, importing over 95% of its oil from the region.

Kito, who is also the president of Japan's No.2 oil refiner Idemitsu Kosan, said his company is looking into possibility of substituting some supply from the Middle East with other sources.

“As alternative sources, we are considering crude from West Africa and North America, if they can be transported and processed smoothly in our refineries,” he said.

But he noted that most Japanese refineries are designed to process crude from the Middle East, and it would not be easy to switch to new supplies as they may not fit with their facilities.

Business

NEOM Hosts Leading Industry Figures for its ‘Discover NEOM’ China Showcase

The tour began in Beijing on April 15, and continued in Shanghai on April 17. (SPA)
The tour began in Beijing on April 15, and continued in Shanghai on April 17. (SPA)
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NEOM Hosts Leading Industry Figures for its ‘Discover NEOM’ China Showcase

The tour began in Beijing on April 15, and continued in Shanghai on April 17. (SPA)
The tour began in Beijing on April 15, and continued in Shanghai on April 17. (SPA)

Saudi Arabia’s NEOM kicked off the China leg of its global “Discover NEOM” tour, in Beijing and Shanghai, with over 500 senior business and industry leaders in attendance.

The tour began in Beijing on April 15, and continued in Shanghai on April 17, said NEOM in a statement on Wednesday.

Organized in partnership with CCPIT Beijing and CCPIT Shanghai, the events included a series of presentations by NEOM’s leadership team showcasing on-the-ground progress and milestones to date, as well as details of NEOM’s various economic sectors.

The events highlighted opportunities for Chinese companies to engage and invest in NEOM. A number of companies expressing interest and discussing tangible next steps with NEOM leadership.

The agenda also included a forum that explored the vast number of opportunities available for Chinese construction companies. Over 100 companies participated in the forum and were briefed about the onsite construction progress across NEOM and its regions.

A private showcase, titled “Discover NEOM: A New Future by Design”, was the highlight of the events. It provided guests with an immersive experience that explored THE LINE, the 170-kilometer-long city that will be the future of urban living; Oxagon, which is redefining the traditional industrial model; Trojena, the mountain resort of NEOM, and finally, Sindalah, a luxury island destination in the Red Sea that will be open to the public later this year.

NEOM CEO Nadhmi Al-Nasr said: “We are grateful to CCPIT Beijing and CCPIT Shanghai for supporting our visit to China and for the opportunity to present NEOM’s vision.”

“To date, NEOM has already engaged with over 15 major Chinese businesses and invested in a number of Chinese startups to support the growth and diversification of NEOM. Collaboration with China will continue to play a vital role in the development of NEOM, and we look forward to strengthening our engagement with the country’s business community.”

CCPIT Beijing Chairman Guo Huaigang said that NEOM and Beijing have significant potential for economic cooperation, and that both are accelerating the development of new modes of productivity, deepening comprehensive reforms, promoting scientific and technological innovation, and working to ensure the protection of the environment. He added that CCPIT Beijing looks forward to the role the cooperation can have in Beijing’s future prosperity.

Deputy Secretary General of Shanghai Municipal Government Zhao Zhuping said: “Shanghai greatly values our relationship with Saudi Arabia. Over the years, we have engaged in extensive cooperation in trade, education, culture and more. We look forward to deepening mutually beneficial engagement with NEOM across infrastructure, renewable energy and technological innovation. The benefits and opportunities for this partnership will only continue to grow.”

“Discover NEOM” China is the latest edition of NEOM’s global roadshow; it follows engagements in key international markets, including Seoul, Tokyo, Singapore, New York City, Boston, Washington, D.C., Miami, Los Angeles, San Francisco, Paris, Berlin and London.

Business

Iraq to Exploit Flared Gas in Cooperation with the US

The Iraqi flag flutters in front of a gas field. (AFP)
The Iraqi flag flutters in front of a gas field. (AFP)
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Iraq to Exploit Flared Gas in Cooperation with the US

The Iraqi flag flutters in front of a gas field. (AFP)
The Iraqi flag flutters in front of a gas field. (AFP)

Iraq and the United States signed on Monday memoranda of understanding (MOUs) to capture flared gas and transform it into electricity, in an attempt to solve the chronic shortage crisis, despite Baghdad’s rich fossil fuel resources.

Iraq aims to achieve self-sufficiency in gas production during the next five years, according to statements by Oil Minister Hayan Abdul Ghani, last month.

The country has gas reserves estimated at 131 trillion cubic feet, ranking 11th in the world according to the US Energy Agency. However, weak infrastructure has reduced daily production capacity by half, recording about 1.5 billion cubic feet of associated gas.

The remaining half is left to burn in the air, causing a loss of millions of dollars and increasing global warming emissions, in a country threatened by a real crisis due to climate change, according to the United Nations.

The largest gas production projects are led by the Basra Gas Company, which is a joint venture between the Iraqi government, which owns 51 percent, Shell (44 percent) and Mitsubishi of Japan (5 percent). In addition to this huge project, the remaining production is carried out through some small stations in the south of the country.

“To allow Iraq to benefit from the US private sector’s leading technology and expertise, the United States and Iraq announced the signing of new memoranda of understanding (MOUs) to capture and process flared gas and turn it into usable electricity for the Iraqi people,” read a joint statement following the US-Iraq Higher Coordination Committee (HCC) meeting.

The press release did not mention a time period for the MOUs.

Iraq needs 40,000 megawatts of electrical energy to meet its needs. It currently produces 27,000 megawatts through stations that operate mostly on gas. But the production capacity sometimes drops to 17,000 megawatts.

Iraq has turned to Iran to fill the remaining gap. It has been importing about 50 million cubic meters since 2017.

However, reliance on unstable Iranian gas, in addition to geopolitical complications, such as US sanctions on Tehran, and internal security such as “sabotage operations” and attacks on the electricity network, cause repeated power outages in the country, which in 2021 led to violent protests.

Business

Saudi Arabia Sets Record for Air Traffic in 2023

Travelers are seen at King Abdulaziz International Airport in Jeddah. (SPA)
Travelers are seen at King Abdulaziz International Airport in Jeddah. (SPA)
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Saudi Arabia Sets Record for Air Traffic in 2023

Travelers are seen at King Abdulaziz International Airport in Jeddah. (SPA)
Travelers are seen at King Abdulaziz International Airport in Jeddah. (SPA)

Air transport traffic in Saudi Arabia in 2023 registered a record number of nearly 112 million passengers through various airports in the Kingdom, with a growth rate of 26 percent compared to 2022, and more than 8 percent compared to 2019.

The General Authority of Civil Aviation (GASTAT) revealed, in the air traffic performance report on Tuesday, that the number of flights through the Kingdom’s airports during 2023 reached 815,000, with an increase of 16 percent compared to 2022.

Saudi Arabia witnessed record growth in terms of the number of passengers and international flights during the past year, reaching about 61 million passengers, and more than 394,000 flights.

King Abdulaziz International Airport emerged as the Kingdom’s busiest hub, averaging 30 flights per hour. Riyadh’s King Khalid International Airport followed closely with a rate of 27 flights per hour, while King Fahd International Airport placed third with 11 flights per hour.

Domestic flights also recorded a noticeable increase in the number of passengers and flights during the year 2023. Passenger volume on domestic routes climbed to 51 million, facilitated by over 421,000 domestic flights departing from various airports across the Kingdom.

Egypt topped the destinations during 2023 in terms of the number of passengers, with a total of about 10.5 million. The UAE ranked second in international destinations for travelers, with a total of about 9.7 million passengers, followed by Pakistan in third place with about 5.3 million. Other key destinations included India, with about 4.7 million passengers, and Türkiye, with about 4 million.

Air cargo transportation witnessed a steady increase of over 7% in 2023, with a total volume exceeding 918,000 tons compared to 854,000 in 2022.

Business

Saudi Arabia's Mining Boom: Expected Wealth to Top $2.5 Trillion 

The Kingdom's abundant mineral wealth, estimated at SAR9.4 trillion ($2.5 trillion), presents a crucial opportunity to expand non-oil revenue streams alongside the oil and petrochemical industries. (SPA)
The Kingdom's abundant mineral wealth, estimated at SAR9.4 trillion ($2.5 trillion), presents a crucial opportunity to expand non-oil revenue streams alongside the oil and petrochemical industries. (SPA)
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Saudi Arabia's Mining Boom: Expected Wealth to Top $2.5 Trillion 

The Kingdom's abundant mineral wealth, estimated at SAR9.4 trillion ($2.5 trillion), presents a crucial opportunity to expand non-oil revenue streams alongside the oil and petrochemical industries. (SPA)
The Kingdom's abundant mineral wealth, estimated at SAR9.4 trillion ($2.5 trillion), presents a crucial opportunity to expand non-oil revenue streams alongside the oil and petrochemical industries. (SPA)

The mining sector in Saudi Arabia is undergoing a significant transformation that will transform it into a key pillar for the nation's economic diversification efforts outlined in Vision 2030.

The Kingdom's abundant mineral wealth, estimated at SAR9.4 trillion ($2.5 trillion), presents a crucial opportunity to expand non-oil revenue streams alongside the oil and petrochemical industries, reported the Saudi Press Agency on Wednesday.

To accelerate exploration and development, the Kingdom has increased its estimated mineral wealth and invested SAR682.5 million ($182 million) in exploration incentives by the end of 2023. This commitment was reinforced by the issuance of 152 new industrial licenses by the Ministry of Industry and Mineral Resources in January 2024 alone. The licenses include 20 for non-metallic mineral products and 19 for activities related to manufacturing formed metal products, excluding machinery and equipment.

According to a report by the National Industrial and Mining Information Center, the 152 industrial licenses issued since the beginning of 2023 contributed to bringing the total number of operating and under-construction factories in the Kingdom by the end of January 2024 to 11,672. These factories represent a combined investment of SAR1,539 trillion.

Recent discoveries, including significant gold reserves along a 100 km stretch in the Mansoura and Masara mines, further emphasize the vast untapped potential of Saudi Arabia's mineral wealth. These mines boast a projected annual production capacity of 250,000 ounces of gold.

The ongoing transformations in the mining sector reflect progress toward achieving the comprehensive strategy of the sector outlined in Vision 2030, which aims to unlock the full potential of the sector, driving economic and social growth, in line with the Kingdom's ambitious goals for 2030.

Vice Minister of Industry and Mineral Resources for Mining Affairs Eng. Khalid Al-Mudaifer elaborated on the government's initiatives to propel the mining sector forward. The initiatives include implementing programs to create a business-friendly environment for mining development, enacting the Mining Investment Law to streamline the licensing process, minimizing the environmental impact of mining operations, maximizing benefits for local communities, and launching a comprehensive geological survey program to gather important data.

The Saudi Industrial Development Fund plays a crucial role, financing advanced exploration and mining projects, including covering up to 75% of eligible project costs, Al-Mudaifer said.

The fund also provides financing solutions for mid-tier and lower-end manufacturing, small and medium enterprises (SMEs), digitalization efforts, renewable energy projects, and initiatives to increase local sector content.

The Ministry of Industry and Mineral Resources has released its monthly report, providing key industrial indicators that highlight the state of industrial activity in Saudi Arabia.

The report emphasizes the significant changes in new industrial investments and presents data related to the mining sector until December 2023. Notably, it included the number of operating factories, which rose 10% in 2023, to 11,549, compared to 10,518 in 2022.

The report also shows an increase in new industrial licenses (1,379 in 2023) with a total investment exceeding SAR81 billion. Additionally, 1,058 new factories began production last year, representing investments of SAR45 billion.

To achieve economic transformation in the field of mining, Saudi Arabia is taking rapid strides through a comprehensive three-phase approach:

Phase 1: Mining Activities

Entails exploration and survey operations to determine mineral quantities, conducting economic feasibility studies, developing mines and processing raw materials.

Phase 2: Intermediate Industries

Includes refining and smelting operations to produce basic materials, such as aluminum alloys and solid steel blocks.

Phase 3: Conversion Industries

Entails the manufacturing of semi-finished products, such as iron and aluminum sheets, as well as finished products like iron pipes and bars.

The ministry has implemented various other initiatives in the sector, including accelerated exploration programs using reliable methods, thereby boosting investment opportunities in the process. These programs are expected to achieve significant outcomes, including increased spending and investment in mineral exploration, acceleration and expansion of exploration activities, development of a robust exploration sector, the creation of attractive investment opportunities for local and foreign investors, empowering small- and medium-sized companies, to help them participate in the exploration process, and bolstering national expertise in exploration and drilling.

The ministry further boosted the mining sector with the launch of the Saudi Mining Services Company (ESNAD) initiative. ESNAD supports the growth of mining investments by assisting mining directorates and developing robust monitoring and control procedures at mines through the use of advanced monitoring tools and modern technologies, alongside support for collecting revenues and fines.

The benefits of the initiative are multifaceted. The mining sector will see a significant improvement in companies' adherence to environmental, health and safety standards. This will ensure the well-being of workers in the sector and neighboring communities, while also boosting the efficiency of monitoring exploited resources, and subsequently boosting state revenues.

The Saudi Geological Survey drafted a national geological information program that seeks to provide geological information and maps of various scales, and conduct aerial and geochemical surveys for the entire Arabian Shield region in order to accelerate investment in mineral exploration.

The program is expected to have an impact on the sector by providing high-resolution geological information that will lead to attracting and increasing investments in the mining sector so that it becomes one of the fundamental pillars of the economy in the Kingdom, boosting confidence in exploration, identifying evidence of the presence of promising mineral deposits and reserves in the Arabian Shield and developing national competencies in geological surveying.

The logistics sector also contributes to empowering the mining sector by increasing the attractiveness of investment in it through the provision of solutions for transporting raw materials and processed minerals to smelters and factories in industrial cities at competitive prices.

All these successful endeavors will maximize the mining sector's contribution to the GDP, helping it reach SAR176 billion by 2030. They will also contribute to improving the trade balance, achieving the sector's sustainability, improving its legislative and investment capabilities, creating more jobs, creating new exports, increasing non-oil revenues and localizing manufacturing.