Saudi Arabia announced on Wednesday that the estimated value of its mineral resources had almost doubled to $2.5 trillion, emphasizing a sector that it believes would aid in the diversification of its economy, which is heavily dependent on oil.
The kingdom’s unexplored mineral reserves are estimated to be worth $2.5 trillion, up from $1.3 trillion in a 2016 estimate, according to Saudi Mineral Resources and Industry Minister Bandar Al Khorayef. In addition to Saudi Arabia’s enormous oil reserves, the resources include gold, copper, phosphate, and rare earth elements. These provide fresh opportunities for underground wealth.
Officials, particularly Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia, had been citing the previous estimate of $1.3 trillion since at least 2017.
Saudi’s minerals’ deal estimates
The mining minister praised recent changes to the kingdom’s legislation and business procedures as being crucial to the $20 billion in transactions that will be completed at the annual minerals summit, which was announced by the Saudi government.
“We have issued approximately 4,500 licenses in the last two years alone, thanks to the revision of our investment law,” Al Khorayef stated. “This has helped a lot of investment to come in the light.”
“”In addition, the investments we have been making on our geological survey program; these two factors by themselves give us access to data and knowledge on various reserves.
The number’s attractiveness lies in the way it combines fresh discoveries—particularly in the area of rare earth metals—with additional reserves of materials that are already known to exist, such as zinc, phosphate, gold, and copper. Therefore, a mix of all of this is involved.
“Only 30% of the Arabian shields exploration… which will continue hopefully to reach 100%,” the minister stated in reference to the statistics. It is thought that mining and prospecting have taken place on the vast Arabian-Nubian shield, which spans the western Arabian Peninsula and northeastern Africa, for thousands of years.
At the meeting, Saudi Arabia revealed that it has created 33 new mining exploration sites and plans to give over 30 mining exploration licenses to foreign firms by 2024.
Prince Mohammad’s vision for Saudi
Under Prince Mohammed, the world’s biggest crude oil exporter seeks to diversify away from fossil fuels, and the government is eyeing the mining sector as a possible source of billions of dollars in foreign direct investment each year.
The mining concentration was “among the more feasible parts” of Prince Mohammed’s Vision 2030 reform agenda, according to a report published last year by risk intelligence firm Verisk Maplecroft. This was made possible by the presence of existing mines, facilities, and infrastructure, such as railroads.
At the conference, Energy Minister Prince Abdulaziz bin Salman stated, “What we are working on is that we would like to be an energy-producing country for all sources of energy,” as opposed to only an oil-producing one.
Even while the valuation increase that was revealed on Wednesday would be beneficial, according to Soltvedt, the current situation “mirrors a broader problem: Saudi Arabia is still seen more as a source of funding than a destination for FDI.”
Delegations from “over 77 countries” attended this week’s meeting in Riyadh, according to the organizers. These included resource-rich African nations, where Saudi Arabia is anticipated to look at mining acquisitions.
In an attempt to seize control of global mining assets, the Public Investment Fund, the kingdom’s well-funded sovereign wealth fund, and state mining company Ma’aden founded Manara Minerals last year.
In July, Manara revealed its first major acquisition: a ten percent share in Vale, a company in Brazil.
One of the best ways to increase foreign investment is still in the mining sector, but Saudi Arabia has not yet succeeded in striking a historic deal with a significant international mining corporation for any of its active mining licenses.
