Saudi Arabia Enhances Mining Sector with New Investment Incentives

Saudi Arabia has unveiled a series of incentive packages aimed at attracting foreign investment and bolstering its mining sector. The Ministry of Investment, in collaboration with the Ministry of Industry and Mineral Resources, introduced these initiatives to streamline mining investments and draw leading local and international companies.

These incentives are part of the Kingdom's Vision 2030 strategy, which seeks to diversify the economy and reduce reliance on fossil fuels. The government aims to attract $100 billion in foreign investment annually by 2030. Recent estimates have upgraded the value of Saudi Arabia's untapped mineral resources to $2.5 trillion, nearly doubling earlier forecasts.

In a significant move, the Saudi Ministry of Industry and Mineral Resources awarded mining exploration licenses to several firms, including India's Vedanta and a consortium of local company Ajlan & Bros and China's Zijin Mining. These licenses cover areas such as Jabal Sayid in Madinah and Al Hajar in Aseer, regions rich in base and precious metals like copper, zinc, gold, and silver. The total area covered is 4,788 square kilometers, with an expected investment of approximately 366 million riyals over the next three years.

To further support the mining industry, Saudi Arabia has committed to investing SR120 million this year in mining incentives. These funds are intended to support companies with the appropriate technical expertise. Abdulrahman Al-Belushi, Deputy Minister for Mining Development at the Ministry of Industry and Mineral Resources, emphasized the government's dedication to accelerating the transition from exploration to production in mining projects. He highlighted the importance of providing land, data, and financing to explorers and miners, noting that the Kingdom has been actively listening to stakeholders to address their needs.

In addition to financial incentives, Saudi Arabia has introduced the Standard Incentives Programme, offering funding of up to 35% of the initial project investment, capped at SAR50 million for each qualifying project. This programme initially targets investments in transformative chemical industries, automotive manufacturing and parts, and machinery and equipment. The focus is on developing the manufacturing of products not currently produced in the Kingdom and enhancing national resources and talent. Further phases of funding are expected to be announced throughout the year.

The Kingdom has also signed nine investment deals in the metals and mining sectors, valued at more than 35 billion riyals . These agreements include projects with Vedanta to build copper facilities at Ras Al-Khair and with Zijin Group for a zinc smelter, lithium carbonate extraction facility, and a copper refinery. These projects are expected to contribute significantly to economic growth and ensure domestic self-sufficiency in copper production.