The mining industry in the sultanate is changing in a number of positive ways. Most notably, output has increased substantially for laterite and several minerals, including gypsum. According to data released by the Ministry of Culture and Industry (MoCI) in 2012, laterite production climbed by over 92%, from around 375,000 tonnes in 2010 to over 720,000 tonnes in 2011. The MoCI calculates that total laterite output was worth more than OR2m ($5.2m) in 2011–an increase of roughly 80% when compared to 2010. Similarly, gypsum production rose from about 650,000 tonnes in 2010 to over 1.25m tonnes the following year, recording an annual growth rate of almost 92%. Nearly OR1.2m ($3.13m) worth of gypsum was mined in 2011, according to MoCI statistics. Marble, copper and limestone all registered high rates of growth over the same period, while one new mineral, manganese, was commercially mined in Oman for the first time in 2011. The MoCI valued total mining output for the year at over OR167.7m ($437m).
Revamping The Rules
As the mining industry expands in new directions, the government is taking steps to strengthen the sector through regulatory changes. The current mining law in the sultanate was issued in 2003 and is in the process of reform. Several motives lie behind the adjustments. First, government authorities want to ensure local factories are given priority over the distribution of raw materials. The government is also interested in exploring ways to give priority to Omani companies when issuing mining licences. Increasing safety and environmental standards within the sector is an additional objective. To this end, Brenk Systemplanung, a German environmental engineering and consulting firm, won a contract in 2011 to assess the sultanate’s mining and mineral industry. The company will advise the Omani government on regulatory reform as well as suggest best practices for the segment. The Directorate General of Minerals (DGM), a division within the MoCI, is playing a valuable role in the expansion of Oman’s mining sector by developing a geological database which can be accessed by firms interested in investing in the sultanate.
Set up in 1974, the DGM also carries out pre-feasibility and feasibility surveys of minerals and rocks with potential to be mined. Comprehensive studies conducted by the DGM of silica sand, for example, have found Oman contains significant deposits of the resource. Equally important, there are huge export possibilities for silica and silica-based products both in the region and elsewhere.
Oman’s sizeable silica sand deposits are not the only reason the sultanate is well-suited for mining. Oman’s mountain ranges contain exposed ophiolite rocks, where gold, copper, zinc, silver, chromite and lead can be found. Oman also contains many nonmetallic minerals, such as limestone, gypsum, dolomite, quartzite and silica sand, various clays, marble and iron oxide, all of which exist in substantial quantities.
The sultanate’s mineral-rich land has not gone unnoticed by investors. The locally incorporated Sun Metals, for example, aims to source Omani iron ore for a planned steel mill plant. With construction set to begin around mid-2012, the facility will be located at the Sur Industrial Estate and will likely use iron ore mined from the nearby Ibra site.
While Ibra-mined ore has been known to be of lower quality, a recent series of studies has classified the material as suitable if processed through a beneficiation plant. Sun Metals plans to refine the iron ore into steel grade feedstock.
Further efforts are focused on the sultanate’s gypsum deposits. In early July 2012 the Zawawi Group, a local holding company, formed an agreement with Chicago-headquartered USG Corporation. The agreement is made up of two phases, with the first being a joint venture set to help develop infrastructure and mine gypsum from a quarry near the southern city of Salalah. USG has said it will acquire a 55% stake in the enterprise.
The second phase of the partnership will also involve a joint venture – a manufacturing project between USG and Zawawi Minerals, a subsidiary of the Zawawi Group and a local mining and minerals processing firm. Ownership will be split 50:50. The new firm will construct and operate a wallboard plant in the Salalah Free Zone nearby the gypsum mine. In its first phase the plant is expected to have a production capacity of 8m sq metres of gypsum board and 200,000 tonnes of plaster of paris (also known as gypsum plaster) per year. A second stage could increase annual capacity to as much as 16m sq metres of gypsum board. The fourth quarter of 2013 has been set as a tentative date of commencing operations.
One significant mining firm operating in the sultanate is Mawarid Mining, a subsidiary of the multinational MB Holding Company. Originally launched in 1997 as the National Mining Company, Mawarid was the first mining firm from the private sector to operate in Oman. The company is involved in both mining and processing, and Mawarid operates a number of open pit copper mines and a copper concentrator facility in the Al Batinah region near the northern border.
Mawarid began development of its Shinas Pit, a copper mine north of Sohar, in mid-2008. The firm reported that the site should provide more than 1.5m tonnes of copper ore at a grade of 0.72% Cu – a substantial amount of which the firm has already extracted. Feasibility surveys of Mawarid’s Mandoos Mine were finished near the end of 2009, and the firm calculated that volcanogenic massive sulphide copper-gold deposits at Mandoos totalled over 8.2m tonnes at a grade of 1.48% Cu. Mawarid obtained a mining licence for the Mandoos site in mid-2011.
Located around 35 km inland from Sohar, the firm’s copper concentrator is built to upgrade ore of around 2-3% copper – the typical grade of mined ore – to a much higher grade of 18% to 24%, according to Mawarid figures. As of September 2011, the concentrator was operating with a throughput of 130 tonnes per hour. Mawarid sells the copper concentrate to international buyers for additional processing as well as to the Oman Mining Company (OMCO) which has a smelter and refinery next to Mawarid’s facility.
Established in 1979, the government-owned OMCO was set up to extract copper from three sites in the Sohar region. The firm operates concentrator, smelting and refining plants which are capable of producing some 20,000 tonnes of copper per year. Production started in 1983, and in 1994, when the firm had depleted its copper deposits, OMCO began to use its facilities as a toll smelting operation, taking in copper concentrate from other firms and processing that into copper cathode. While OMCO’s processing facilities have done well, the firm did not abandon its mining operations. In 1994 the company obtained a block in an area relatively near Sohar known as Yankul. OMCO mined gold at the Yankul site for 15 years and in 2011 noted plans to begin mining for copper at Yankul in the near future.
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