Petroleum & Mineral Resources Minister Ali Naimi has announced that the kingdom's new mining code will be issued by the end of the year. The code, which is expected to liberalise investment procedures in the sector, will replace legislation introduced in 1973. The mining sector is a key target for expansion in the kingdom's seventh five-year plan, contributing to the government's goal of economic diversification. The code is being prepared by the Petroleum & Mineral Resources Ministry in collaboration with the Deputy Ministry for Mineral Resources (DMMR) and the Saudi Arabian Mining Company (Maaden - MEED 11:1:02).
'We are now in the final phase of preparing the new strategy, which has been subjected to extensive studies over the past months,' said Naimi on 31 March in Riyadh. 'Just two days ago we had a meeting at the ministry headquarters in Riyadh, where the plan was reviewed with the consultancy firm hired for this purpose. It involves the ministry, the DMMR, Maaden and the SGS [Saudi Geological Survey]. The new mining law is in its final stages and we expect it to be formally issued before the end of the year.'
The code is eagerly awaited by investors. 'It will be a very positive step when it is implemented,' says Hatem el-Khalidi, chief executive officer of the US' Arabian Shield Development Company, which is looking at a zinc and copper project at Al-Masane in western Saudi Arabia. 'I think it will speed up the process of applying for a mining licence, allow a swifter transfer of leases and look at opening up gold mining to foreign firms too.' But El-Khalidi says that mining will continue to be a challenge for investors until the price of metals rises.
The kingdom has large commercial quantities of zinc, copper, bauxite and phosphates, as well as gold and silver. Maaden was formed in 1997 through the transformation of the former government General Petroleum & Minerals Organisation (Petromin) in an attempt to encourage private sector participation in mining. It will be privatised over the medium term. Maaden is now looking at a major phosphate project in northern Saudi Arabia with Saudi Oger, which will require the construction of a rail link to transfer the mineral to Jubail for processing (MEED 29:3:02, Transport).
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