Saudi Arabia in recent years, have witnessed a surge in the demand for mining licenses, and this is a reflection of the country’s effort to diversify its economy from oil dependency. With the Saudi Vision 2030, which is the ambitious plan of Saudi Arabia, spearheaded by Crown Prince Mohammed bin Salman, the country has made mining as the strategic pillar of its economic growth. And this is creating opportunities for both foreign and national investors and businesses to explore and take advantage of the vast mineral resources spread across the Arabian Peninsula.
Are you one among the many planning to start a mining business in Saudi Arabia? Confused about the future of business and how to obtain a mining license in Saudi Arabia? As per the report of SPA, citing the Ministry of Industry and Mineral Resources, implementation of new investment law in 2021, led to a surge in the issuance of a number of mining license in Saudi Arabia. And this liberation in law is a good news to all those dreaming to procure a mining license in the country. Though the main aim of this law is to boost the investment, and enhancement of the development and mineral production in the country, it also means a lot to the investors as well.
The tremendous surge in the issuance of licenses from just 8 to 19 before and after the enactment of law in 2021, representing a growth of 138% is a proof that both the Kingdom of Saudi Arabia and investors are benefiting from the new law passed.
The increase in the number of issuance of mining licenses is attributed to the country’s plan to enhance the mining sector of the Kingdom, and position Saudi Arabia as an ideal destination for global mining activities. This decision is also crucial for the exploration of SAR9.4 trillion ($2.5 trillion) worth of mineral wealth to its full potential.
Passing of new Mining Investment Law has attracted and benefited both the local and foreign investors and has streamlined the entire process. And this has been crucial to the 241% increase of the amount of building material quarry licenses from 158 before the enactment of the law to 538 in 2023 and exploration licenses rose from 58 before the passing of the law to to 259 in 2023, which represents a growth rate of 347%.
The crucial mining strategy initiatives like the Accelerated Exploration Program of the Kingdom has also been a crucial factor for the surge in the number of licenses issued, as these initiatives strategically reduced the processing time of the license and other necessary approvals, which was not the case earlier.
The enactment of the law is also aimed to boost the investment and achieve the goals of Vision 2030 as fast as possible. Launch of the Mineral Exploration Incentives Package, which is valued at about $182 million, aims to boost the investment from both the domestic and international investors. One such investor who has benefited from this is Luxembourg’s Eurasian Resources Group, which entered the Kingdom of Saudi Arabia in 2023 with an initial investment of $50 million.
The incentives package is useful for the companies that had exploration licenses of the Kingdom for less than 5 years, and they are eligible for a support up to SAR 7.5 million that is $2 million and can obtain 15 Saudi mining licenses.
Though the Kingdom has a mineral wealth of about $ 2.5 trillion, from 30% of the mineral region of the country, the country is still a mini player in the metals and mining industry in the global platform, compared to the mining and its production from other countries like Australia, China, Canada, Chile, Russia, South Africa, United States, the Democratic Republic of Congo, etc. So various laws and incentive packages are implemented from the side of the government, so that the mining potential of the Kingdom can be fully explored, thus making Saudi Arabia a global player in the mining industry
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Conclusion
The sharp rise in demand for mining licenses in Saudi mining licenses is a proof of the effort of the Kingdom to diversify its economy and take the mineral wealth of the Kingdom to the global level. Development of the mining sector is also crucial for both the domestic and international investors. With the timely government support, regulatory reforms, and sustainability efforts, the Kingdom is sure to have a prosperous future in mining.
Hope you are clear with why there is a huge surge in the demand for mining license in Saudi Arabia. Do you still have any questions that are unanswered regarding the topic discussed in this blog? Don’t worry, contact us or write your query in the comment section below. Let our experts answer your query and clarify your doubts.
Till then happy reading!
