Saudi Diversification into Mining

This is the first of what will be a weekly summary of mining industry announcements that have implications for equipment suppliers, the service sector and the global financial community. It will include new resource announcements, feasibility studies, mine openings and expansion projects.

Nov 20, 2018
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This is the first of what will be a weekly summary of mining industry announcements that have implications for equipment suppliers, the service sector and the global financial community. It will include new resource announcements, feasibility studies, mine openings and expansion projects.

Saudi Arabia is about to unveil a US$22.7 billion mining project in the country's northern region. Energy Minister Khalid al-Falih said in an interview with Al Arabiya TV that the Waad Al-Shamaal complex hosts 500 Mt of phosphate ore and is projected to create 10,000 jobs. The initiative is part of the country's efforts to diversify the economy away from oil.

Saudi Arabia's plan to reduce its dependence on oil involves the mining of untapped bauxite reserves, as well as phosphate, gold, copper and uranium. The country plans to treble the sector's contribution to its economic output by 2030, with foreign investment being welcomed upon the introduction of a new law.

Meanwhile, the CEO (and largest shareholder) of PJSC Norilsk Nickel Co., Vladimir Potanin, has announced that the company aims to expand output over the next five years to take advantage of growing demand for nickel, copper and palladium from electric vehicle makers. Potanin announced long-term production growth targets for Norilsk's existing mining assets, comprising a 15% increase in nickel and copper, and a 25% boost to platinum group metals output by 2025 as compared with 2017 output.

Australian Mines Ltd has issued a bankable feasibility study on the Sconi cobalt-nickel-scandium project in north Queensland. The company has outlined a net present value of A$697 million, a 15% internal rate of return, and a 5.2-year payback period.

Antofagasta Plc has approved an US$1.3 billion expansion of its 60%-owned Los Pelambres joint venture in Chile. The project will result in an additional copper production of 60,000 t/y over the first 15 years. Construction is expected to begin early next year, with first production expected in the second half of 2021.

SolGold Plc has updated the indicated and inferred resources at its Alpala project in Ecuador to a total of 2,950 Mt at 0.52% Cu equivalent for 15.4 Mt of copper equivalent metal. This is more than double the amount announced for the maiden resource in December 2017.

S&P Global Market Intelligence's Metals & Mining database listed 15 resource announcements in the first half of November, as listed in the table below.

 

All material taken from S&P Global Market Intelligence's Metals & Mining database.

Chris Hinde

Chief Commentator, Mining Beacon

Previously editorial director of Mining Journal, and more recently head of S&P Global Market Intelligence's metals and mining team, Chris is now Mining Beacon's editor-in-chief and lead commentator. He posts two blogs every week, one on Monday reviewing market conditions over the prior week, and a second on Thursday looking at issues on the global mining scene. There is also a quarterly blog on business opportunities in the sector.

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