Saudi Arabia announced that it has created an independent Ministry of Industry and Mineral Resources, separating it from the current Energy Ministry.
The shift was part of a series of royal orders by Custodian of the Two Holy Mosques King Salman, reported by the official Saudi Press Agency. The existing Ministry of Energy, Industry and Mineral Resources, led by H.E. Khalid Al Falih, will be renamed the Ministry of Energy.
The creation of the new ministry falls within Vision 2030 and will be fully independent starting on January 1, 2020. Bandar Al-Khorayef, a top executive at Alkhorayef Group, was named to head the new ministry.
Under Al-Khorayef, the ministry’s goals will be to increase the value of mining operations to $64 billion. Currently, the direct and indirect contribution of the sector to the Kingdom’s GDP is estimated to be around $17 billion.
Saudi Arabia has discovered more than 40 commercial minerals reserves, including large amounts of bauxite, as well as silver, zinc, copper, magnesite, and kaolin deposits. The Kingdom has some of the world’s largest reserves of phosphate and tantalum, and of up to 20 metric ounces of gold in known deposits.
With 51 exploration projects underway including 14 gold and 14 copper projects, foreign firms are being encouraged to explore such deposits as Saudi Arabia aims to work with international strategic partners, both as investors and suppliers. Within Vision 2030, foreign direct investment is being pushed to contribute 5.7% of the GDP from the current 3.8%. In parallel, the private sector’s contribution to the GDP is predicted to rise to 65% from the current 40%.
The kingdom also recently expanded the mandate of its $28 billion Saudi Industrial Development Fund to allow the financing of energy, logistics and mining projects. Previously, the fund only provided financing to local manufacturing businesses. The changes allow companies to apply for financing options such as multi-purpose term loans and acquisition financing, while ventures outside the country that have Saudi investors are now eligible to apply for funding.
Saudi Arabia has also invested $3.5 billion to ease doing business and enhance access to geoscience data. There are currently an estimated $16 billion worth of ongoing mining projects in the Kingdom.
The U.S.-Saudi Arabian Business Council will be releasing its Mining Industry Sector Report soon for a more in-depth look.