Saudi Arabia's Ministry of Industry and Mineral Resources said on Tuesday that favourable mining laws have led to an exponential boom in companies seeking exploration permits in the Kingdom. 

The Ministry also announced a new incentive package worth SAR685 million (US$182 million), aimed at reducing the risk for exploration firms and encouraging investment in the country.

These moves are in line with Saudi's Vision 2030, an outlook based on diversifying away from oil and gas as fossil fuels fall in demand.  

In 2021, the Kingdom updated its Mining Investment Law to streamline the process of obtaining mining licenses. 

The new law saw the country establish a national geological database, provide a 'mining fund' to support the sector, improve licensing by increasing the maximum duration and mining area for permits, and introduce financial incentives, such as the ability to mortgage an exploration permit. 

In an update this week, the Ministry said that since its implementation, the number of exploitation licenses granted has grown by 138%, rising from eight in 2021 to 19 at present. 

Exploration licenses have also surged, increasing by 347% from 58 in 2021 to 259 in 2023. Similarly, building material quarry licenses increased 241%, to 538 in 2023 from 158 before. 

"According to the ministry, the Mining Investment Law has significantly streamlined the process of obtaining mining licenses, attracting both local and international investors (...) It also said that the mining strategy initiatives, such as the Accelerated Exploration Program, have led to more licenses being issued. These initiatives have reduced the time required to obtain necessary approvals, which before used to take several months," Saudi's press agency said in a statement. 

A new incentive 

On Tuesday, the ministry announced a new incentive package worth SAR685 million (US$182 million), which aims to reduce risks for companies seeking to explore minerals in Saudi Arabia. 

The program offers financial support to companies with valid exploration licenses for less than five years, with each licensee potentially receiving up to US$7.5 million. Each company can receive support for up to 15 licenses, leading to a potential maximum benefit of a whopping US$112.5 million. 

Among the sites up for grabs are four exploration licenses in the Ras Al-Qaryah complex in Eastern province, the ministry said in a statement on X while inviting companies to compete for the permits. 

The total licenses cover 5 sq.km in a region that is 4km away from the coast with salt-ore closely exposed at the surface. 

The area is also known as a 'sabkha', a flat coastal region that is covered in a crust of salt and minerals. 

A sabhka is formed when semi-arid to arid climates cause seawater to evaporate rapidly, leaving behind deposits on the surface, according to the Encyclopedia of Engineering Geology. 

While the raw materials differ by sabhka, they often consist of evaporite minerals with industrial applications, such as salt, gypsum and calcium carbonate. 

Companies have until April 18 to apply for the four licenses, after which the tender will go through four stages before the permits are awarded. 

Permits in each province 

While the Kingdom has yet to reveal where the newly issued licenses are located, a July 2023 report said that out of the 2348 active mining-related permits, 610 were in the Riyadh province, while 384 were in the Makkah region and 380 in the Eastern region. 

One of the most significant projects is state-owned miner Ma'aden's Mansourah-Massarah gold project, which cuts across the Riyadh and Makkah regions. The mines, which will use a combination of open-pit and underground methods, are expected to produce 7t of gold per year over a 12-year mine life, according to the company.

The site is located in the 'Arabian Shield', a geologic region known for its gold deposits. 

Speaking with Mining Magazine, Rana Maristani, chief executive at R consultancy, a London-based firm specialising in international expansion to the Gulf, said that the Arabian Shield region, which lies in the country's west, "is rich in metals and minerals, including gold, silver, copper, zinc, tin, and many others. This region is the primary focus for mineral exploration activities."

According to Maristani, another area being explored is in the Northern and Eastern regions.

"These areas are also being explored for phosphate and bauxite deposits, crucial for the Kingdom's growing industrial sectors like aluminium production and fertiliser manufacturing," she said. 

"When we looked at mining as a sector to be developed in our Vision 2030, to be a real contributor to the diversification of our economy, it was very clear that it's a sector that we can't do alone. We need to have collaboration to other countries, definitely we need to have private sector engagement (...) We have all of the ingredients that can make us a hub for the global community," said Bandar Alkhorayef, Saudi Arabia's  Minister of Industry and Mineral Resources during an interview at the Future Minerals Forum.