While Saudi Arabia may traditionally have seen the oil fields in its Eastern Province as the source of its wealth, the gold, phosphates and bauxite found in its western and northern regions promise to provide a third pillar of the economy by complementing oil and petrochemicals. Billions of dollars will be ploughed into mining, infrastructure and processing in the next three years, and the plan is to use these developments to create manufacturing industries further down the value chain.

Mining Company

Serious efforts to capitalise on the Kingdom’s mineral deposits began relatively recently, in 1997, when the mining company Ma’aden was formed. In 2008, 50% of the company was floated on the Saudi Stock Exchange, and since then it has entered into joint ventures to expand its activities. The company’s main activities are based around its four gold mines, the extraction of phosphates and the production of fertilisers, and the extraction of bauxite for use in the smelting and rolling of aluminium. “Saudi Arabia is incredibly blessed when it comes to natural resources,” Mohammed Al Assaf, senior partner and board member of United Arabian Mining Company, told OBG. “God has bestowed great wealth upon Saudi Arabia. In the east we have oil, and in the west, in the Arabian Shield, we have an abundance of precious metals such as gold, copper and zinc, which is required globally.”


Ma’aden Gold and Base Metals Company, a wholly owned subsidiary, has produced 4m ounces of gold since 1988, but expects to see a sizeable jump in production in the near future. It currently operates five mines and is developing two more. A key factor in the development of the two new facilities is the construction of a 450-km water pipeline that will carry treated wastewater from the city of Taif to the mines. The company signed a SR464m ($123.7m) contract for the construction of the pipeline in January 2012 and it was due to begin operating in 2015. In 2013 three of the company’s mines produced 99% of its gold, with Bulghah accounting for 51,222 ounces, Al Amar 45,807 ounces and Mahd Ad Dhabab 39,708 ounces. The year’s total production of 138,513 ounces was down 14% on 2012 as the mines’ yields fell, but by 2017 the company says it hopes to be producing 500,000 ounces a year.

The two mines it is planning to open are both open cast. In 2011 an Australian-Saudi joint venture, Ausenco, won a $150m contract to develop As Suq, which is 365 km north-east of Jeddah and Ad Duwayhi, which is 450 km south-west of Riyadh, in what the company calls the central Arabian gold region. In February 2013 Ma’aden awarded a SR1bn ($266.5m) contract to Hanwha Engineering and Construction to build a 2m-tonne-per-year gravity carbon-in-leach gold processing plant for the Ad Duwayhi mine. Ma’aden says the mine is expected to produce 180,000 ounces of gold per year or more than 1.6m ounces over its lifetime. It is scheduled to begin production in 2015.

Ibrahim Alsenaidi, general manager of Advanced Mashreq Mining Company, which was established in 2011 as a mining services company undertaking geophysical and exploratory drilling, believes gold has great potential. “Significant gold deposits remain untapped, which could help develop a strong mining sector,” he told OBG. “In fact, gold offers the best opportunity for growing the mining sector’s impact on the Saudi Arabian economy. Up until now gold has been underexplored. However, the government has now realised the opportunities available and has dedicated significant resources to gold exploration around the Kingdom.”


Ma’aden’s phosphate business is undergoing rapid expansion. In 2007 the Ma’aden Phosphate Company (MPC) was formed as a joint venture with Saudi Basic Industries Corporation (SABIC), and $5.6bn was subsequently invested in a facility at Ras Al Khair, 90 km north of Jubail on the Gulf coast. The integrated fertiliser facility includes plants producing phosphoric and sulphuric acids, an ammonia facility and a phosphate plant producing 3m tonnes per annum (tpa) of fertiliser. MPC also operates a phosphate mine and plant at Al Jalamid, 150 km east of Turaif in the north of the Kingdom, which produces 11.6m tpa of ore that is then transported to Ras Al Khair by rail. However, the company’s biggest ongoing project is at Waad Al Shamal, just 20 km from Turaif. In partnership with SABIC and the Mosaic Company, the largest fertiliser producer in the world, Ma’aden is investing $7bn in an integrated facility that will more than double the firm’s phosphate production capacity when it comes on-line in late 2016.


The 1500-km, north-south railway that will serve Ma’aden’s fertiliser and phosphate plants is also key to the development of its aluminium business. Built and operated by Saudi Railway Company, the railway will carry 4m tpa of bauxite ore from Ma’aden’s Al Baitha bauxite mine 600 km to the deep-water port at Ras Al Khair. In September 2014 Ma’aden announced that commercial operations had begun at the $10.8bn aluminium plant it built in a joint venture with Alcoa of the US, which owns 25% of the facility. The smelter has a production capacity of 740,000 tpa of aluminium. Ma’aden has also built a 380,000-tpa rolling mill and a refinery in an integrated production facility.

Other Minerals

In December 2014 Ma’aden announced it was paying $216m to create a 50:50 joint venture with Barrick Gold Corporation to develop and mine a copper deposit at Jabal Sayid, 120 km south of Medina. The company says it hopes production will start by the end of 2015. According to a report published in 2008, the Ministry of Petroleum and Mineral Resources had discovered precious metals at 1273 sites in the Kingdom and non-precious metals at 1711 sites. Other mineral discoveries in the Kingdom include bentonite, dolomite, feldspar, garnet, zinc, granite, graphite, gypsum, tantalum, high-grade silica sand, kaolinitic clays, limestone, magnesium, marble and silver. “The western regions offer the richest area for mineral exploration, especially in terms of the range of minerals that can be found there,” Alsenaidi told OBG.

Industrial Minerals

Since 2011 a wholly owned subsidiary, Ma’aden Industrial Minerals Company, has been extracting low-grade bauxite (LGB), kaolin and magnesite. The company operates a kaolin and LGB mine in the central zone of Az Zabirah, a high-grade magnesite mine in Zargat and a processing plant in Al Madinah Al Munawarah. LGB is used as an additive in cement industries, while kaolin serves as a filler in paper, paint, plastics, adhesive and ceramics, and is also supplied to the phosphate industry for the production of phosphoric acid. Magnesite is used to line blast furnaces and incinerators, and as a filler in the production of synthetic rubber. In 2013 the Ma’aden Industrial Minerals Company had sales of SR150m ($40m).

The challenge for the government is to use the resources as a platform to launch manufacturing enterprises. “Value-added creation is a must,” Al Assaf told OBG. “We should not just be exporting raw materials, but instead develop the entire downstream industry so that we are creating finished goods.” The aluminium could be used to make drinks cans, but also parts for the car manufacturing or aerospace industries.