Oman - Mining and Materials Oman - Mining and Materials
Overview
Although numerous quarrying and mining operations are underway in Oman, the Sultanate’s mineral resources are still relatively untapped, with large deposits of metals and industrial minerals waiting to be unearthed. Oman’s mountains host intact and exposed ophiolites, which could contain metal deposits such as chromite, cobalt, copper, gold, lead, magnesium, manganese, nickel, palladium, platinum, silver, vanadium, and zinc. Oman’s mining industry has attracted increasing interest from both foreign and local operators, being the first GCC producer and exporter of ferrochrome.
In September 2014, the government established the Public Authority for Mining (PAM) to regulate the sector, and two years later it established Minerals Development Oman (MDO) as a new holding company to serve as the executive arm. PAM has helped in drafting a new mining law, which is still under review. Once the law is enacted, the mining authorities will need to adopt implementing regulations, environmental and safety standards, and delineations of concession blocks. Per Omani law, before submitting an application to obtain a mining license from the PAM, a company is required to get approvals from eight different ministries first.
Gypsum: Oman is reportedly the world’s largest gypsum exporter. Domestic gypsum resources are estimated at more than one billion tons, and Oman is well-placed to meet rising Asian demand for this commodity at a time when traditional exporters are grappling with depleting resources or other challenges, according to media reports.
Potash: In February 2018, Gulf Mining Group, one of the largest privately owned mining corporations based in the Sultanate, announced that it had received a license to explore for potassium chloride deposits as raw material for its Sulphate of Potash (SoP) project. Officials disclosed that the company is looking at a production capacity of around 500,000 tons per annum (tpa) of SoP, rising to 1 million tpa in the next phase of its development.
Chromite: Approximately 30 million metric tons of chromite ore is located in Oman, according to a company that exports chromite ores from Oman. Oman started mining and exporting chromite ores in the early 1980s. In July 1991, the government established the Oman Chromite Company, and it was later listed on the Muscat stock market. Metallurgical grade chromite ores started to be exported in the last few years primarily in response to rising demand from China and general shortages of ferro chrome worldwide in the production of stainless steel.
Copper: In 2018, Australia-based mining firm Alara Resources announced that it received the mining license from Omani authorities for its joint-venture Al Hadeetha copper project in the Sultanate. Savannah Resources also reported receiving “no objection” from all eight Ministries for both the Mahab 4 and Maqail South copper mining license applications. Other substantial activity in the sector includes the copper mining operations of Oman Mining Company and Mawarid Resources in the Sohar and Shinas areas, which have reached around 35 million tons of ore exploited. A joint venture between Oman Mining Company, Mawarid, and Oman Oil Company is investing in five separate copper deposits in Yanqul in the Al Dhahirah Governorate. In 2018, the international mining investment firm EXO signed an agreement for the exploration and development of copper and gold reserves in Block 10, also near Yanqul.
Other Materials: Limestone for cement production is mined in both the northern and the southern areas to supply the Oman Cement Company's plant in the Rusayl Industrial Estate near As Sib and the Raysut Cement Corporation's plant near Salalah. Tile and marble are also produced for local construction. Surveys have indicated deposits of numerous other materials, including asbestos, coal, iron ore, lead, manganese, nickel, silver, and zinc. Large deposits of metal ores are located at the Sayh Hatat area (northeast of Izki) and the Al Jabal al Akhdar area. Substantial deposits of zinc and lead are known to exist in Dhofar, Jalan, and Hawshi Huqf (southwest of Al Ghabah).
Leading Sub-Sectors
Main Metallic Minerals: Copper, Chromite, Laterite, Manganese
Industrials Minerals and Rocks: Limestone & Marble, Dolomite, Gypsum, Silica sands and Quartzite, Clays and Shale, Salt, Coal, Olivine, Kaoline, Salt, Aggregates
Opportunities
The mining and minerals sector has been identified as one of the focus sectors for diversification, though there remains room for greater transparency. Key concerns remain difficult regulations; delays in licensing and issuing of permits; and the doubling of the royalty rate from 5 percent to 10 percent in 2016. Through the Tanfeedh initiative, the government has been outlining initiatives in regulatory reform and infrastructure development, which are much needed for the sector’s development.
Along with the discovery of sizeable reserves of minerals such as gold, copper, and rare earth, there could be significant opportunities for U.S. companies in the mining sector once the new mining law is enacted. The law is expected to ease procedures and attract more investments in the sector. Key projects within the sector include mineral processing and refining facilities in the Port of Duqm’s industrial zone.Oman is focusing on the development of an internal rail network for the transportation of minerals from the southern interior to the Port of Duqm. ASYAD is exploring the development of a PPP for the mineral line railway operation. MDO is still planning to go ahead with its Initial Public Offering (IPO). 60 percent of its equity is owned by four government entities and the remaining 40 percent is planned to be offered for public subscription via the IPO.
Web Resources
Public Authority for Mining
Minerals Development Oman
Oman Minerals & Mining Exhibition & Conference
Oxford Business Group