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The Saudi Mining Sector |
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By Dr. Salah Zugail, Assistant Dean for Administrative Affairs E-mail: Zugail@uoh.edu.sa |
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Developing the mining sector has been an important aspect of the Saudi government’s plan to diversify the country’s economic base. The Saudi mining sector presents a high-growth potential, according to the Kingdom’s seventh five-year development plan (2001-2004), anticipating the sector to grow at a rate of 8.34% per annum1. The government’s medium and long-term objectives for this sector which was initiated since the implementation of the sixth five-year development plan (1995-2000), include reaching out to private and foreign investors to establish industries for extracting and processing the minerals, and providing the Saudi manufacturing sector with its requirements in raw materials, as well as making Saudi Arabia a leading exporter of minerals. |
The Saudi government views private investment as the engine of growth of the mining sector, and is anticipating more partnerships between local investors and international companies. The incentives it has granted private investors have made investment in this sector highly profitable. Investors in Saudi Arabia’s mining industry recorded $3 billion profits for the year 2003 alone2, and that was mostly achieved by exploiting industrial minerals related mainly to construction materials.
Recent attractions of more private investment involvement are the upcoming efforts to establish a large mineral industrial complex in the eastern Saudi city of Jubail at a total cost of SR22 billion.3
1 http://www.us-saudi-business.org/seventhplan.htm
2 http://www.saudinf.com/main/y6993.htm
3 http://www.saudinf.com/main/y7098.htm