Mining Industry Equipment in Saudi Arabia

A Hot Tip about Coal and Lignite in Saudi Arabia

Posted on: 27 May 2010


Saudi Arabia contains significant industrial minerals beside the oil and gas fields. The Deputy Ministry for Mineral Resources (DMMR) has located 1,273 sites of precious metals, and 1,171 sites of non-precious metals. Over 30 minerals have already been identified in the Kingdom, with at least 15 industrial mineral that could successfully be exploited by investors. Feasibility studies have shown that many of the industrial minerals indentified in the Kingdom would have a return on investment close to 30 percent. Despite of mineral wealth, Saudi Arabia is still in the preliminarily stage, particularly in the metallic minerals. The government established Saudi Arabian Mining Company (Ma’aden) in 1997, and Saudi Geological Survey Agency in 2000 to survey, identify and explore mining resources and prepare them to be attractive for local and foreign investors.


The government aims to diversify the economy and become a leading exporter of minerals beside oil and gas. There are, however, many challenges and obstacles facing the mining sector, which in the turn may require a long period of time before the government’s goal is achieved. At the top of these challenges is the fact that most of mining resource are in remote areas and lack basic infrastructures. This has made mining very costly to develop, not only for the government but also for the private sector.


Data on the potential market size are extremely difficult to estimate. The mining industry in Saudi Arabia is at the beginning of a large expansion, as the country begins to exploit large mineral resources identified some time ago. The country is simultaneously implementing several large-scale transportation infrastructure projects, requiring much of the same equipment as the mining projects.


In recent years, the Saudi government has recognized the potential of the mining and minerals sector to become the third pillar of the Kingdom’s economy, behind oil and petrochemicals. Geological surveys carried out over the past 53 years have proven that the Kingdom has large mineral deposits that are commercially viable for exploitation. The government is committed to fully realizing the potential of the mining sector, and is seeking to attract investors, partners and suppliers. A new mining law adopted in 2004 to allow greater access for foreign companies to the kingdom’s mineral resources is beginning to bring results.


Ma’aden’s aluminum project includes the development and construction of a bauxite mine near Al-Baitha with a mine life of over 30 years at an annual capacity of 4,000,000 metric tons as well as facilities for handling raw materials. It also comprises the development, design, construction and operation of an integrated aluminum operation at Ras Az-Zawr about 90 km north of Jubail Industrial City. Facilities there will include an alumina refinery with a capacity of 1,800,000 metric tons per year, a 740,000 metric ton per year aluminum smelter and an aluminum rolling mill with a capacity of 250,000 tons per year.


The Bauxite will be transported from the mine site located between Hail and Qassim provinces, via the north-south railway to Ras Az-Zawr where it will be refined to produce alumina, which in turn will be processed in the aluminum smelter to produce aluminum. The mine plan has been prepared based on the planned capacities of the refinery and smelter and reviewed in comprehensive technical studies.


Saudi Arabian Mining Company (Ma’aden), a 100 percent state owned entity, dominates the mining sector. Ma’aden is in the process of creating individual companies for its gold, industrial minerals, phosphates and aluminum interests. The Saudi minerals giant is also establishing an infrastructure development company to build and operate the prestigious Ras Az-Zawr project.


Best Prospects/Services

The Kingdom has the largest known deposits of mineral resources in the Middle East. The main minerals are gold, phosphates and bauxite. Saudi Arabia is home to some of the largest phosphate deposits in the world. Reserves stand at 3.1 billion tons, with 1.6 billion tons of indicated phosphate resource and 1.5 billion tons of inferred resource.


By 2011, in addition to the Ras Az-Zawr development, there will be new bauxite production from Al-Zubeira, phosphates from Al-Jalamid and the Ras Az-Zawr Aluminum Smelter.


Ma’aden recently has signed a US$240 million deal with a consortium to build three sulfuric acid plants in Ras Az-Zawr. The plants will have a daily capacity of 13,500 tons. The project, which will be ready within three years, is described as the largest in the world. The new sulfuric acid plants are part of a US$ 2.6 billion di-ammonium phosphate complex.


Ma’aden on December 20, 2009 signed a US $10.8 billion Joint venture with Alcoa, the world leader in Aluminum, for the development of fully integrated world-class aluminum industry in the Kingdom. In it is initial phase, the joint venture will develop a fully integrated industrial complex including a bauxite mine with an initial capacity of 4 million metric tons per year, an alumina factory with an initial capacity of 1.8 million empty, an aluminum smelter with initial ho-mill capacity of between 250,000, and 460,000 mtpy. The mil will focus initially on the production of sheet, and tab stock for the manufacture of aluminum cans, and potentially other products to serve the construction industry. The refinery, smelter and rolling mill will be established within the industrial zone of Ras Az-Zawr on the east coast of the Kingdom (Ras Az-Zawr is 90 km north of Jubail on the coast of the Arabian gulf).



In the next five years, some $18 billion will be invested in mining projects in the Kingdom, much of it by the Ma’aden. While an aluminum smelter and some fertilizer plants will add value, perhaps the biggest value will come with the new freight rail network to carry minerals to the coast for export.


The government recently approved the construction of a US$4 billion aluminum smelter plant, a Ma’aden project with an annual capacity of 623,000 tons. The plant will be located in the Ras Az-Zawr Industrial Zone in eastern Saudi Arabia. Ma’aden believes the Ras Az-Zawr mineral industrial complex will attract more than US$18 billion in investment for the phosphate and aluminum projects, a power plant and a port on the Gulf.


Ma’aden plans to develop five gold projects and a complete mining system at the Ras Az-Zawr industrial area linked by railways with the company’s industrial utilities and a port for exporting phosphate and aluminum.


Ma’aden has also finalized plans to set up phosphoric acid plants, which is under construction at Ras As Zawr for the Ma’aden phosphate project it will be ready within 8 months. The plant will produce 4,380 tons of phosphate a day, making it the largest facility of its kind in the world.



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Posted: 27 May 2010

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