The Saudi Cabinet recently approved a mining investment law to help attract local and international investors to the sector.
The law, which includes 63 articles, is aimed at boosting the untapped mineral industry in Saudi Arabia as part of the Vision 2030 reform plan to diversify the economy and public financial resources.
Vision 2030 has focused its attention on growing the mineral sector in the Kingdom, which is blessed with rich resources such as aluminum, phosphate, gold, copper, uranium, and other raw materials.
Although the Saudi mining sector has already undergone improvements, its contribution to the country’s gross domestic product has yet to meet expectations.
As such, the new mining law and its strategy is not only expected to bring about a quantum leap in the industry but also increase the sector’s contribution to non-oil GDP by more than SR240 billion ($64 billion), reduce imports by about SR37 billion, and create at least 200,000 new direct and indirect jobs for Saudi nationals.
Also, the new law is set to draw an ambitious national mining industry capable of attracting and activating mineral wealth in the Kingdom worth around SR5 trillion. The regulations will also facilitate and back the establishment of a mining fund to provide sustainable finance for the sector as well as to support geological survey and exploration programs.
In addition to the economic benefits of the law, it is expected to enhance mining-sector governance and transparency while increasing investor confidence, which in turn will help to localize the mineral industry and attract foreign investment.
There will also be environmental benefits through the protection of soil from contamination and the preservation of groundwater from chemical pollution. Cities are expected to be built adjacent to mining projects and as such this will help the Saudi government to sustain development in the Kingdom on an equal footing.
I believe that the new mining law will not only help to stimulate private-sector investment, but also enhance the mining exploration process which will assist in protecting and growing Saudi Arabia’s national mineral wealth, while creating jobs for locals, and so reducing unemployment in the Kingdom.