Saudi Arabia aims to increase revenue from mining sector three times by 2030

The energy minister for Saudi Arabia, Khalid al-Falih told reporters at a conference in Jeddah that the kingdom plans to increase the contribution of its mining industry to national wealth three times by 2030 as measured by gross domestic product.

Saudi Arabia is working on finalising a mining strategy that aims to raise annual mining revenues from 64-billion riyals ($17-billion) to 240-billion riyals by 2030.

"The ministry will develop this vital sector... double the number of work opportunities in the sector and boost exploration activities," Falih said.

Saudi Arabia has been making an effort to diversify its economy from oil to other resources. State subsidies are shifting towards mining untapped reserves of bauxite to be used in making aluminium, one of the fastest growing metals at present. Efforts are also going on in order to extract minerals like phosphate, gold, copper and uranium.

The new mining strategy is expected to be implemented early next year. The state wants to make some highly needed structural reforms in the mining sector. State owned Saudi Arabian Mining Co (Ma'aden) has said mining will generate 97-billion riyals per year and create 90 000 jobs in next five years.

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Ma'aden Aluminium is a joint venture between Ma'aden and US aluminium major Alcoa which is under fundamental pressures due to low global prices of aluminium cause by over capacity of aluminium in China which is flooding the international markets. Saudi companies' cost advantage due to easy availability of cheaper energy was partially offset by rises in energy and gas feedstock prices after the state cut subsidies last December to cope with a nearly $100-billion state budget deficit.

Recent discovery of gas reserves on Saudi's Red Sea coast where many of the country's mineral reserves are located would help in mining expansion and energy availability will not be an obstacle anymore, the minister further said.