As part of its transformative Vision 2030, Saudi Arabia aims to reduce dependance on oil revenues and diversify its national economy. The mining sector emerges as a critical player in this regard.
The Kingdom boasts massive natural resources, including minerals such as lithium, cobalt, nickel, gold and other rare earth metals. Furthermore, the Saudi government has embarked on several initiatives to boost investment in the mining sector, positioning itself as a major player in the thriving industry, as the global demand is on the rise due to energy transition, according to a report by Mining Technology, an affiliate of GlobalData.
Growing Mining Industry
Saudi Arabia is progressing towards becoming a leading mineral commodity supplier and a key player in the global mining industry, as the GlobalData’s Market Assessment of Mining Industry in Saudi Arabia 2023 report showed.
The Saudi General Authority for Statistics (GASTAT) noted that the contribution of the mining and quarrying industry to the country’s GDP in 2021 accounted for around 35.73%. This figure is expected to grow.
Furthermore, GASTAT revealed that the mining industry recorded a yearly increase of 0.40% in October 2024, while the Kingdom’s mining GDP increased to $58bn (SAR 217.5bn) in Q3 2024, from $56bn in Q2.
In May 2024, a GlobalData research projected that the Saudi mining sector will see substantial expansion in the coming years, owing to the Kingdom’s partnerships and collaborations in the mining industry. In November, Saudi Arabia signed 9 mineral and mining deals, totaling $9.3bn.
Earlier in 2024, the Saudi Ministry of Industry and Mineral Resources signed memoranda of understanding (MoUs) with Egypt, Morocco, the Democratic Republic of Congo and Russia to facilitate knowledge transfer and shared initiatives.
Ambitious Plans
The Saudi National Center for Industrial and Mining Information estimated the Kingdom’s mineral wealth at SAR 9.4trn as of April 2024. Moreover, the non-oil sectors accounted for over 50% of the country’s GDP for the first time in 2023. In statements to a US media outlet in early December, the Saudi Deputy Minister of Industry for Mining Affairs, Khalid Saleh Al-Mudaifer, said: “Mining is a small industry now, but we are looking to quadruple the size of the sector by 2030, and we are already hitting the targets we set for 2025.”
He further added that the “mining and minerals sector will be able to provide the necessary materials for our own domestic needs, under the National Minerals Program, which will drive growth in the mining sector and capitalize on the kingdom’s vast mineral wealth.”
Expanding Mining Investments
During the Resourcing Tomorrow conference in London in December, Al-Mudaifer pointed to the need for substantial investments over the coming years to boost the mining sector and meet the growing demand driven by the energy transition. He said that the mineral sector “requires about $6trn of investment by 2035, or four-times the market capitalization the top 20 mining companies in the sector.”
In order to bridge this gap, Al-Mudaifer noted that the Kingdom intends to “attract significant new capital, potentially opening doors for new players including sovereign funds, and oil and gas companies.”
Additionally, he said that “the energy transition will require minerals, lots more minerals, and to get hold of them, you need more supply, and that requires investment, infrastructure, policy change and innovation”, as this will help “de-risk whatever risks might be.”
To this end, Saudi Arabia has put a lot of effort to attract investments. This includes providing new information to organizations interested in moving to the country. Furthermore, the “Saudi Geological Survey (SGS) has also helped us attract investors, as well as helping us discover new mineral resources, including rare earth metals,” he added.
Massive Mineral Wealth
Saudi Arabia is rich in mineral resources, including minerals used in electric vehicles (EVs) and renewable energy projects, such as bauxite, copper, gold, lithium, magnesium, silver, zinc and several rare earth elements.
In July 2024, Saudi Arabia launched its National Minerals Program to enhance the efficiency of supply chains, ensure their sustainability, and advance economic growth. The program prioritizes de-risking exploration investments in the Kingdom, facilitates new discoveries and promotes greenfield projects, aiming to attract junior miners and forge partnerships with international investors.
Gold Hub
Saudi Arabia has vast gold deposits, and is on track to increase its gold production. According to GlobalData, the Kingdom was the 27th-biggest gold producer in 2023, with an increase by 16% in output compared to the previous year. Estimates project that gold production will see a compound annual growth rate of 6% between 2023 and 2027.
This expected growth will be driven by projects such as Saudi Arabian Mining Company’s (Ma’aden’s) Mansourah and Massarah project. Ma’aden figures showed that, by the end of 2023, the region’s volume of gold reserves was estimated at 7 million ounces, with an annual production capacity of 250,000oz.
According to GlobalData research, gold deposits spread across Saudi Arabia’s Central Arabian Gold Region, stretching from the Red Sea coast to the heart of the country.
