Riyadh turns to remote areas for mining prospects

13 March 2012

Saudi mining giant Maaden has received bids for phosphates city in northeast of Saudi Arabia

The prospect of a new industrial city at Waad al-Shamal in the northeast of Saudi Arabia must have been welcomed by the population of a somewhat forgotten area of the kingdom.

“The project would have been impossible five years ago, but the area is now linked to the railway”

Due to its remote location, there has never been much call for industrialisation in the area, until now. Saudi Arabian Mining Company (Maaden) is developing two phosphate mines in the area and has proven reserves of about 770 million tonnes.

The kingdom’s phosphates reserves are lower than other Middle Eastern countries, but with Maaden driving its mining operations forward, downstream industries are starting to develop.

There are separate strategies for the mines and Riyadh is hoping the plans will create jobs and wealth in two underdeveloped areas.

The phosphates from the Al-Jalamid mine is being transported to Ras al-Khair in the Eastern Province where it is being processed into fertiliser at a new plant and sold to domestic and international customers.

Production at Ras al-Khair started on 1 February and is being ramped up. The second strategy involves the Al-Khabra mine, which is still under development by Maaden. The phosphate reserves at Al-Khabra are low in heavy metal content and suitable for food production. This has prompted Maaden to develop a $6bn phosphates city at Waad al-Shamal.

Maaden plans to build eight processing plants that will use the output from the mine and act as an anchor to attract smaller clusters of conversion industries. The project would have been impossible five years ago, but the area is now linked to the Saudi minerals railway.

Riyadh knows that industrial diversification should no longer just focus on Yanbu on the Red Sea Coast and Jubail in the east. The whole country needs to be given opportunities and that only comes from putting infrastructure in place to provide jobs and skills to local people.

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