S. Arabia plans to produce 100T of gold in 10 years

JEDDAH — Saudi Arabian Mining Company, known as Maaden, plans to produce 100 tonnes of gold within 10 years as the company is seeking foreign investment to carry out a number of vital projects.

By K.k. Jafarkhan

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Published: Fri 18 Feb 2005, 11:35 AM

Last updated: Thu 2 Apr 2015, 4:25 PM

Dr Abdullah Dabbagh, president and chief executive officer of Maaden, said he was hopeful that the newly revised mining investment law would attract more foreign funds to the sector.

The law, which was passed by the Cabinet on September 13, 2004, is expected to make the mining sector the third pillar of the economy, alongside hydrocarbons and petrochemicals.

The law, which has simplified and streamlined the procedures for obtaining exploration and mining licences, offers local and foreign investors a number of benefits, including tax-free import of equipment and spare parts, the right to obtain multiple licences, and the ability to explore for various minerals in the licensed area.

The law's main objective is to boost production of gold and remove financial restraints on foreign companies. "Maaden plans to produce 100 tonnes of gold within 10 years and this requires SR2 billion in investments," said Muhammad Hani Al-Dabbagh, vice president for precious metals operations. Maaden was established with a capital of SR4 billion in 1997.

The UK-based Tertiary Minerals, the only foreign mining company present, owns the exploration licence for the Gurayyat tantalum deposit, described by Tertiary as the world's single largest source of a metal used in the electronics industry.

The president hopes that $7 billion worth of projects planned by Maaden, which currently employs 600 people, will create tens of thousands of jobs. Its flagship project is to convert bauxite from a planned mine at Zubairah in the north at a refinery and smelter at Ras-Al-Zawr on the east coast.

The company also plans a phosphate fertiliser plant at Ras Al-Zawr, powered by a new oil-fired power station, with exports facilitated by a planned port. Dabbagh puts the cost of the project at $4.6 billion, against the $1.2 billion at Maaden's disposal. Foreign capital is seen as a means of bridging the gap. Maaden has spoken to major international companies, thought likely to include Alcoa and Alcan.

"We are close to India where aluminum consumption is growing, and we have very cheap energy, which is the most important cost for running an aluminum plant," the Financial Times quoted the president as saying.

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