Saudi Arabia has nearly doubled the estimated value of its mineral resources and is seeing lucrative deals signed during its Future Minerals Forum in Riyadh this week, ministers told CNBC.
Estimates for the kingdom's untapped mineral reserves have risen to $2.5 trillion from $1.3 trillion in a 2016 forecast, according to Saudi Minister of Mineral Resources and Industry Bandar Al Khorayef. Resources include gold, copper, phosphate and rare earth elements, providing new sources of underground wealth in addition to Saudi Arabia's vast oil reserves.
“We're very pleased with this news … it's really the result of what we've done over the last four years,” Al Khorayef told CNBC's Dan Murphy on Wednesday.
The Saudi government announced the signing of contracts worth $20 billion at the annual Minerals Forum, and the mining minister hailed recent reforms to the kingdom's laws and business practices as crucial to this windfall.
“The revision of our investment law has helped many investments come to light. The number of licenses we have issued in the last two years is around 4,500,” Al Khorayef said.
“Plus the amount of money we put into our geological survey program; these two things alone allow us to access information and data on various reserves. And the nice thing about the number… is that it is actually a combination of new findings, especially in rare earth metals, but also in other deposits of what we already know in the form of phosphate, gold, copper, zinc and so on. So it’s a combination of all of that.”
The minister pointed out that the figures were “based on only 30% of exploration of the Arab Shields… which will hopefully continue to reach 100%.” The Arabian-Nubian Shield is an extensive block of rocky crust that extends across the western Arabian Peninsula and northeast Africa and is believed to have been the site of mining activity and exploration for millennia.
Saudi Arabia has developed 33 new mining exploration sites and aims to award more than 30 mining exploration licenses to foreign investors in 2024, it announced at the forum.
The concerted effort to invest in mineral exploration and mining and to license foreign investors is part of Saudi Arabia's Vision 2030 program, a multi-trillion-dollar initiative launched by Crown Prince Mohammed bin Salman was called 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 free its economy from dependence on hydrocarbons.
When asked where the country stands in relation to the goals of Vision 2030, the mining minister was optimistic.
“You know, sectors like tourism show quick results, we may be a slower sector. But when I see the pipeline, the different projects that we are doing, the pipeline of private investments, the pipeline infrastructure, then to me that is really proof that hopefully we will achieve our goals.”
“Our job today in the ministry and in the ecosystem is actually to help push and advance projects much faster,” he said, emphasizing the importance of working with investors to respond to their needs. Part of that is the kingdom's new mineral exploration incentive program, announced Wednesday and with a budget of more than $182 million.
“In general, I’m really happy with the progress,” said Al Khorayef. “I mean, in terms of policies, it's all set in terms of enablers, it's all set in terms of infrastructure. As far as budgeting and financing of all infrastructure is concerned, we have been empowered. So it's, you know, our job.' Now I have to do it.