Mining is new pillar of the Saudi economy

Meanwhile the site of a huge new industrial centre designed to serve the Kingdom's emerging solid minerals sector is being cleared on the Gulf coast, 60 kilometres north of Jubail.

Main elements of the centre at Ras Al-Zour will be a 3 million tons-a-year di-ammonium phosphate (DAP) plant and a 640,000 t/y aluminium smelter as well as a dedicated port. In addition a 1,800 MW power station is to be built along with an ammonia plant, alumina refinery and facilities to produce sulphuric and phosphoric acid.

Observers see the projects as creating a new pillar of the Saudi economy making the Kingdom an important global player in the phosphates and aluminium industries. Saudi Arabian Mining Company (Maaden) expects the fertiliser project to cost $1.9 billion to implement and the aluminium smelter another $4.4 billion.

Phosphate mines

A crucial element in both projects is a $2 billion new 1,500 kilometres railway to carry raw materials from phosphate mines in the north at Al Jalamid near the Iraq border and bauxite from Al-Zabira in the northeast

The Al Jalamid deposit is estimated to contain 313 million tonnes of phosphates able to provide sustained production for at least 27 years. Other major phosphate deposits have been identified in the area. The Al-Zabira bauxite deposit is said to contain more than 240 million tonnes of bauxite.

Some $25 billion of investment is projected for the new city at Ras Al Zour which is planned to accommodate a range of downstream small and medium scale industries utilising both processed minerals production and petrochemical inputs from Jubail. Ras Al-Zour could also become a centre for processing other locally available minerals such as silica, magnesite, dolomite and many others.

WTO impact

Now that Saudi Arabia has joined the WTO and reached agreement on feedstock prices with the global body Saudi production advantages have been confirmed with low-cost energy inputs making projects such as those planned for Ras Al-Zour highly competitive in global markets.

Maaden plans to begin fertilizer exports by 2008 and aluminium shortly after that. When the di-ammonium phosphate plant reaches peak production in five years time it will produce a quarter of the world's DAP production.

There is substantial potential in Saudi Arabia for a vast range of mineral extraction and processing operations which the Mining Investment Code issued last year is designed to encourage.

Concessions are available for thousands of square miles of mountainous and hard rock areas containing both industrial minerals and precious metals.

The Ministry of Mineral Resources says it has detailed maps and some 2,800 technical reports available for potential investors. No rental is made for exploration while mining rates are limited to a maximum of $2,666 per square kilometre.