In January 2025 Oman exported its first shipment of copper concentrate in 30 years, a major symbolic step in the revitalisation of the sultanate’s mining sector. Government-owned mining company Minerals Development Oman (MDO) is overseeing 12 concession areas to grow domestic production of in-demand minerals such as iron, copper and silica. In addition, MDO is expanding existing production capacity for building materials including limestone and marble.
Oman’s geographic location means the mining sector is well-placed to serve the growing needs of neighbouring GCC economies, such as the UAE and Saudi Arabia. The sultanate is also positioned to meet increasing demand from India and China for minerals to fuel their green energy industries. Oman’s primary aim is to quickly ramp up production and make itself an indispensable link in global supply chains as the world enters an era of increasingly challenging trade relations.
Oversight
The key sector regulation is the 2019 Mineral Wealth Law. Its 70 articles lay out sector regulations, local employment conditions, environmental protections and the regulatory investment framework. When enacted, the law designated the Public Authority for Mining as the primary regulator, however, this entity was merged into the Ministry of Energy and Minerals (MEM) in 2020, giving regulatory responsibilities to the ministry. The law lays out administrative rules as well: exploration licences are granted for one year, but are renewable for up to three years; exploitation licences are for five years, renewable in five-year increments; and concessions for large deposits are for 20-30 years. Companies have to submit quarterly reports on monthly extractions, inventory and sales numbers, employees, processing, development and operations. Royalties are a minimum of 5% of annual output, and 1% of the value of annual output should be invested to support communities surrounding the mining site.
The law has been amended several times since 2019, with amendments in 2022 clarifying licensing, licence waivers and handling legal disputes. The law itself does not contain foreign ownership specifications, but with the Foreign Capital Investment Law, issued in 2019, 100% foreign ownership in the sector is permitted.
The MEM is the main regulatory entity for the sector, and has been led by Salim Al Aufi since June 2022. Next to its regulatory duties, the MEM collects and publishes data on Oman’s resources, certifies operators in the sector, carries out health and safety investigations, and conducts policy research and feasibility studies. To maintain control over the supply chain and create more value-added industry domestically, the MEM created the Industry Development of Energy and Minerals in July 2021. The department is charged with expanding Oman’s downstream resource processing capacity to minimise the export of unprocessed raw materials.
Oman Vision 2040
Mining is a target sector of Oman Vision 2040, the national economic diversification plan. The sultanate’s political stability and its proximity to Asian markets translates into it being well-positioned to draw substantial benefits from its non-oil resource wealth. The mining sector benefits from one of the key initiatives under Oman Vision 2040, the National Programme for Enhancing Economic Diversification, or Tanfeedh, which focuses on backing from additional institutional and the provision of financial incentives – to target non-oil sectors. Mining is also mentioned in Oman’s 10th five-year plan (FYP) – which runs from 2021 to 2025 – as one of seven sectors targeted for diversification. The FYP aims for the mining sector to constitute 0.7% of Oman’s economic output by 2025, from a base of 0.5%, with a minimum annual growth rate of 9% required in order to achieve that goal. However, according to the 2023 annual report of the National Centre for Statistics and Information (NCSI), the GDP contribution of the mining and quarrying sector has remained steady at 0.5% of GDP from 2021-23.
Mineral Wealth
As of January 2025 Oman had 17 mining concession areas, 14 of which were hosting active operations led by MDO and affiliated companies across an area of 23,763 sq km. The concession areas with metallic minerals are largely concentrated in the Al Batinah North Governorate, with smaller areas in Al Dakhiliyah, Al Dhahirah and Al Buraimi governorates. Non-metallic minerals are spread out over Oman, with concession areas near Al Shuwaymiyah in the Dhofar Governorate and near Al Khaluf in the Al Wusta Governorate. According to MDO’s 2023 annual report, the sultanate has around 51m tonnes of copper ore, of which 25.7m tonnes, or 50.4% are reserves. Chromite resources are estimated at 213,000 tonnes, of which 133,000 tonnes are reserves. Limestone resources are approximately 2.9bn tonnes, dolomite with 2.4bn, gypsum at 936m and silica at 210m.
Key Companies
MDO was established in 2017 to streamline the development of the mining and minerals sector, and is its main operator. It is 76.8% owned by the sultanate’s sovereign wealth fund, the Oman Investment Authority (OIA), and 23.2% by government-owned TANMIA. MDO dominates the mining landscape through its portfolio of companies, which are divided into three divisions based on their activities: companies in the metals division that mine copper, gold, chromite and ferrosilicon; companies in the industrial minerals division that focus on salt, silica and construction materials, including limestone, gypsum and gabbro; and companies in the downstream division that refine minerals and produce mineral-related products.
Metals
There are three key entities in the metals subsector, all with full or partial MDO ownership. Mazoon Mining is wholly owned by MDO and is overseeing the development of the vast Mazoon copper project in Al Dhahirah Governorate, Oman’s largest integrated copper concentrate venture. Spanning 20 sq km, the project encompasses five open-pit mines with estimated reserves of 22.9m tonnes of copper ore. An advanced processing plant, covering 56,000 sq metres, is designed to process 2.5m tonnes of ore annually, with the aim of producing 115,000 tonnes of copper concentrate per year at a purity of 21.5%. Construction of the processing plant is slated to begin in the first quarter of 2025, with production expected to commence by the first quarter of 2027. This strategic initiative aligns with Oman’s economic diversification efforts, positioning the sultanate as a key player in the global copper market. Oman Mining Company (OMCO), wholly owned by MDO after its assets were transferred from OIA, also operates in the copper sector.
The landmark export of copper concentrate in January 2025 originated from Lasail mine concession in Sohar, which has an annual production capacity of 500,000 tonnes of copper ore and produces highgrade copper concentrate with purity levels of 18-22%. Copper exports reinforce the sultanate’s position as a reliable supplier throughout global markets. MDO is evaluating the economic and technical feasibility of using OMCO’s copper smelting furnaces and other infrastructure for ferrosilicon production. Lastly, Oman Chromite Company, the only active mining company on the Muscat Stock Exchange, has 25.4% MDO ownership, and operates in chromite prospecting and exports, primarily to east Asian markets.
Industrial Minerals
There are six companies in the industrial minerals division. Wafra Mining is 100% MDO-owned and operates limestone quarries in Sohar, with reserve estimates at 15m tonnes and an annual production target of 1m tonnes, primarily serving domestic customers. Naqa Salt, also 100% owned by MDO, runs the Naqa Salt project, launched in December 2024. Through evaporation ponds, the project targets 1.5m tonnes of annual production with the intention to create feedstock for local downstream industries. Al Wusta Mining Company, 75% owned by MDO, is developing an estimated 40m tonnes of silica ore reserves in Al Wusta Governorate, known as the Mahout Silica project. The silica will be used in local glass manufacturing and in the production of solar panels. Kunooz Oman Holding, with 20% MDO ownership, and Ahjaar Mining Company, with 40% MDO ownership, both produce gabbro, with Kunooz also producing marble and limestone. Ahjaar’s production capacity is 1.2m tonnes per year. Meanwhile, Duqm Quarries, 70% owned by MDO, produces construction aggregate materials, primarily supplying Omani infrastructure projects.
Downstream
The nascent downstream segment has seen major developments in recent years as part of the government’s efforts to promote value-added projects in the minerals sector. Sohar Titanium, a strategic partnership between MDO, Dubal Holding and Stork International Group, via Gulf Titanium Company, is expected to commence operations in August 2025. At a cost of OR43m ($111.8m), its annual processing capacity will be 150,000 tonnes of titanium oxide. MDO has a 14.8% stake in Oman Synergies Casting, a company located in Sohar that produces aluminium alloy wheels. Lastly, the Al Shuwaymiyah Industrial Minerals project is a major piece of Oman’s mineral strategy. The project comprises three principal quarries with a combined production capacity of 40m tonnes of limestone, dolomite and gypsum. It aims to establish a new export centre and industrial zone in the Dhofar Governorate to promote growth within the downstream minerals subsector. Plans for the project include a deep seaport with direct transport connections to several mining concessions, and a potential railway line linking the project to the Special Economic Zone at Duqm. The project is slated for completion in 2027, although by March 2025 planning studies were still ongoing.
Economic Contribution
Mining and quarrying’s contribution to GDP remained stable at 0.5% from 2021 and 2023. Comparing it to the GDP contributions of other key sectors in Oman, mining is 60 times smaller than the crude petroleum sector, 10 times smaller than natural gas, and less than half the size of the fisheries sector. At current prices, output has risen steadily over the same period, from OR182.9m ($475.4m) in 2021 to OR205.8m ($534.9m) in 2023. In percentage terms, the annual growth rate at current prices was -13% in 2021, when the economy was under significant pressure related to the Covid-19 pandemic. In 2022 the sector posted growth of 7.2%, dipping slightly in 2023 to 4.9%. According to the NCSI, the gross value added of the mining and quarrying sector is notably high, at OR15bn ($38.9bn) in 2023, higher than crude petroleum extraction, which sat at OR11.5bn ($29.9bn) the same year. However, momentum seems to have slowed in 2024. According to the Central Bank of Oman’s September 2024 statistical report, mining and quarrying’s contribution to GDP in the first six months of the year at OR108.3m ($281.5m), compared to OR112.6m ($292.6m) the same period in 2023.
Employment
As the government strives to expand employment opportunities for citizens under Vision 2040, the mining sector has emerged as an important source of job creation. According to the NCSI, in 2022 mining and quarrying employed 49,236 individuals. The figure rose by 3.2% to 50,835 in 2023, of which 37,787 were Omanis and 13,048 were expatriates. This makes mining and quarrying as one of four sectors where local employees outnumber expatriates. Additionally, the number of expatriates in the sector is decreasing, falling 4.7% year-on-year (y-o-y) in December 2024, according to the NCSI’s January 2025 statistical bulletin. Based on a total workforce of 2.3m, the mining and quarrying sector employs around 2.2% of the workforce, nearly five times higher than the GDP contribution of the sector.
Performance
Mineral production in Oman dropped slightly between 2022 and 2023, according to the NCSI, from 75.8m tonnes to 70.4m tonnes, due primarily to a drop of 9m tonnes in the production of sand, gravel and certain building materials. Other products like salt, chromite and manganese saw slight declines, while marble block production increased appreciably from 564,000 tonnes in 2022 to 973,000 tonnes in 2023, and gypsum production grew from 10.6m tonnes to 13.3m tonnes over the same period. Despite the overall drop in production, the total sales value of mineral products only declined slightly, from OR115.1m ($299.1m) to OR113m ($293.7m) in this period. According to the MEM, the decline in sales was caused by a 24% drop in the sale of building materials but was largely balanced out by a OR6.8m ($17.6m) increase in the combined value of gypsum, limestone and chromite sold. The MEM also said that the reported decline in production numbers could be partially explained by late submissions of mining company production reports. Silica, salt, sand and laterite production remained steady between 2022 and 2023, but planned projects are expected to lead to production increases in the second half of the decade. The Mazoon Mining project, for example, began development in February 2024 after a final investment decision was made the previous February. The Mawarid Mining-led Al Ghuzayn copper project began production in the second quarter of 2024 with a target capacity of 20,000 tonnes of copper concentrate per year, and exported its first shipment in October 2024.
In 2023 MDO revenue rose substantially to OR9.1m ($23.7m) from OR2.9m ($7.6m) in 2022. In its financial report the company said that due to its heavy focus on exploration and development, it was not expected to be profitable for several years, although the net loss in 2023, at OR2.5m ($6.4m), was 57% smaller than the OR5.6m ($14.6m) loss that was budgeted. MDO’s exploration and evaluation assets increased by 7% in 2023, reaching OR111.9m ($290.9m), and net assets totalled OR136.5m ($354.7m).
Licensing
In 2023 the MEM issued 12 new exploration licences and eight mining licences, and an equal number of exploration and mining licences were renewed. Al Batinah North Governorate had the most mining licences issued in 2023, with three for marble, one for chromium and one for building materials, all of which were renewals of existing licences, apart from the new chromium licence. Al Dakhiliyah has four active licences, of which three were newly issued and one renewed in 2023. Al Sharqiyah North also issued two new licences in 2023, while Al Sharqiyah South issued a new marble licence and renewed a building materials licence. Al Dhahirah renewed one limestone mining licence, and Dhofar also issued a new limestone licence.
Regarding exploration licences, Al Dhahirah has the most active ones, with six, of which three were newly issued and three renewed in 2023. Al Dakhiliyah issued four new exploration licences and renewed one that year, and Al Sharqiyah South issued three new licences and renewed one. Al Batinah North had no new exploration licences in 2023 but renewed three existing exploration licences. Meanwhile, Al Sharqiyah North issued one new licence and renewed two more, while Al Wusta issued one new salt licence and renewed another. These licences are overwhelmingly held by Omani companies. According to the MEM there are seven companies operating in Oman’s 17 concession areas. MDO is active in 11 of these, with its subsidiaries, Mazoon Mining and Mawarid Mining, active in five others. Only one foreign entity, UK-based Knights Bay, has an Omani concession, and it is expected to spend $25m-30m on three years of exploration for nickel and cobalt ores within the Al Sharqiyah North Governorate.
Exports
According to the NCSI, exports in mineral products have seen notable growth between 2021, when valued at OR763,000 ($2m), and in 2023, reaching OR2.8m ($7.3m). Sohar Port is the largest export centre for mineral products, which handles 22.8m of the 23.3m tonnes of seaborne mineral exports in 2023. However, NCSI’s January 2025 statistical report indicates that mineral exports have since dipped, with export value down 35.3% y-o-y in January to November 2024.
The GCC is Oman’s largest building stone export destination in 2023, with Saudi Arabia making up 30.8% of exports; the UAE, 20.6%; and Kuwait, 6.1%. South Korea is the third-largest export market in this segment overall, with 11.8% of building stone exports. Indonesia (31.8%), Saudi Arabia (18%) and Thailand (14.7%) are the main export destinations for semi-finished iron, a trade valued at $3.3bn in 2023. Iron ore exports, valued at $1.6bn, primarily went to Saudi Arabia (25.3%); China (16.6%); and the UAE (16.5%) in 2023.
While Oman’s mineral export destinations are reasonably diversified, its overall exports focus on a handful of countries. China made up 42.9% of Omani exports in 2023; India was second at 6.4%; Saudi Arabia third, with 5.2%; and the UAE in fourth position at 5%. It is therefore no surprise that MDO, in its January 2025 investment brochure, emphasises Oman’s geographic proximity to large silica and copper markets in Asia. Exporting minerals to these markets would allow Oman to build upon existing trade links with China, India and South Korea to supply these countries’ technology and green energy industries with raw materials. In October 2024 Chinese steel producer Jinnan Iron & Steel announced a joint $627m investment with Brazilian mining firm Vale in an iron ore concentration plant in Sohar. This is part of a growing trend of Chinese investment in the sultanate, which increased by 8% in 2024.
Other positive indicators are found in the Oman Development Bank lending to the sector, which grew from OR155,000 ($403,000) in 2021 to OR5.9m ($15.2m) in 2023. Private sector lending is also increasing: in December 2022 mining made up 3.5% of credit from Omani banks, rising to 3.8% a year later. In absolute terms, mining and quarrying’s bank credit grew from OR970.3m ($2.5bn) in 2021 to OR1.2bn ($3bn) in 2023 – although it was still below a peak of OR1.4bn ($3.7bn) that the sector witnessed in 2020.
Outlook
The mining sector’s outlook is largely positive. Growing bank activity to the mining and quarrying sector is an encouraging sign, as the capital-intensive nature of mining guarantees high costs before profit is made. Continued exploration and infrastructure improvements, in addition to recent legal changes to the investment environment, should make Oman an increasingly appealing investment destination for foreign companies. Although exports have recently trended downwards – and the sultanate’s large building materials sector will not be immune from the impact of a global rise in protectionism that could stem from the policies of the current US president – Oman is well-positioned to benefit from Asian and European minerals consumers who want to shorten their supply chains.
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