Saudi Arabia nearly doubled the estimate for the value of its mineral resources and is seeing lucrative deals signed during its Future Minerals Forum held in Riyadh this week, ministers told CNBC.
Estimates for the kingdom’s untapped mineral reserves have jumped from $1.3 trillion in a 2016 forecast to $2.5 trillion, according to Saudi Mineral Resources and Industry Minister Bandar Al Khorayef. The resources include gold, copper, phosphate and rare earth elements, offering new sources of subterranean wealth on top of Saudi Arabia’s mammoth oil reserves.
“We are very excited about this news … it’s really a result of what we have been doing in the last four years,” Al Khorayef told CNBC’s Dan Murphy on Wednesday.
The Saudi government announced $20 billion in deals would be signed at the annual minerals forum, and the mining minister hailed recent reforms to the kingdom’s laws and business practices as being pivotal to that windfall.
“Revamping our investment law has helped a lot of investment to come in the light, the number of licenses that we have issued in the last only two years is in the neighborhood of about 4,500,” Al Khorayef said.
“Plus the amount of spending that we have been doing in our geological survey program; these two things alone allow us to access information and data on different reserves. And the beauty about the number … is really it’s the combination of new findings, especially with the rare earth metals, plus also more deposits of what we already know, in phosphate, gold, and copper, and zinc, and so on. So it’s a combination of all of this.”
The minister noted that the figures were “only based on 30% of the Arabian shields exploration … which will continue hopefully to reach 100%.” The Arabian-Nubian shield is an expansive block of rock crust spanning the western Arabian peninsula and northeast Africa that is believed to have been the site of mining activity and exploration for thousands of years.
Saudi Arabia has developed 33 new exploration sites for mining, and aims to award foreign investors more than 30 mining exploration licenses in 2024, it announced at the forum.
The concerted effort to invest in minerals exploration and mining and issue licenses to foreign investors is part of Saudi Arabia’s Vision 2030 program, a multitrillion-dollar initiative launched by Crown Prince Mohammed bin Salman to diversify the kingdom’s economy away from oil, attract foreign investment and provide more jobs for its burgeoning youth population. Mining is seen by the Saudi government as the third industrial pillar that will move its economy away from reliance on hydrocarbons.
Asked where the country was with respect to those Vision 2030 goals, the mining minister was optimistic.
“You know, sectors such as tourism show quick results, we are maybe a slower sector. But when I see the pipeline, the different projects that we are doing, pipeline of private sector investment, pipeline infrastructure, that is really to me the true proof that we are also going to hopefully meet our targets.”
“Our job actually today in the ministry and the ecosystem is to help accelerate, move projects much faster,” he said, stressing the importance of working with investors to address their needs. Part of that is the kingdom’s new mineral exploration incentive program, announced Wednesday, that 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 policies, it’s all set in terms of enablers, it’s all set in terms of the infrastructure. In terms of budgeting and financing all of the infrastructures, we have been enabled. So, you know, it’s our job now to do it.”