Saudi Arabia has nearly doubled its estimate of the value of its mineral resources and has seen lucrative deals signed during its Mineral Futures Forum in Riyadh this week, ministers told CNBC.
Estimates of the kingdom’s untapped mineral reserves have jumped from $1.3 trillion in a 2016 forecast to $2.5 trillion, according to Saudi Minister of Mineral Resources and Industry Bandar Al Khorayef. Resources include gold, copper, phosphate and rare earth elements, offering new sources of underground wealth on top of Saudi Arabia’s mammoth oil reserves.
“We’re very excited about this news … it’s really the result of what we’ve been doing for the last four years,” Al Khorayef told CNBC’s Dan Murphy on Wednesday.
The Saudi government has announced that $20 billion in deals will be signed at the annual minerals forum, and the mining minister credited recent reforms to the kingdom’s laws and business practices as key to the windfall.
“The revision of our investment law has helped many investments come to light, the number of licenses we have issued in the past two years is close to about 4,500,” Al Khorayef said.
“Additionally, the amount of spending that we do in our geological exploration program; those two things alone give us access to information and data on various reserves. And the beauty of that number … is actually a combination of new insights.” especially with rare earth metals, plus also other deposits of what we already know in phosphate, gold and copper and zinc and so on. So it’s a combination of all that.’
The minister noted that the figures were “based on only 30% of the Arab shield survey… which will hopefully continue to reach 100%.
Saudi Arabia has developed 33 new mining exploration sites and aims to award more than 30 mining exploration licenses to foreign investors by 2024, it announced at a forum.
The concerted effort to invest in mineral exploration and production and issue licenses to foreign investors is part of Saudi Arabia’s Vision 2030 program, a multi-trillion dollar initiative launched by Crown Prince Mohammed bin Salman to diversify the kingdom’s economy away from oil and attract foreign investment. and provide more jobs for its growing young population. Mining is seen by the Saudi government as the third industrial pillar that will shift its economy away from dependence on hydrocarbons.
When asked where the country stands with respect to these Vision 2030 goals, the mining minister was upbeat.
“You know, sectors like tourism are showing quick results, maybe we’re a slower sector. But when I see the pipeline, the different projects that we’re doing, the pipeline of private sector investment, the pipeline infrastructure, that’s really true for me. proof that we’re also hopefully going to meet our goals.”
“Our job today in the ministry and the ecosystem is to help accelerate and move projects much faster,” he said, stressing the importance of working with investors to address their needs. Included is the kingdom’s new incentive program for mineral exploration, announced Wednesday, which has a budget of more than $182 million.
“Generally speaking, I’m really very happy to see the progress,” Al Khorayef said. “I mean, in terms of the politicians, it’s all set up in terms of funds, it’s all set up in terms of infrastructure. In terms of budgeting and funding all the infrastructure, we’ve been enabled. So, you know, it’s our job now to do it. “