The journey of mining in the Kingdom from the era of foundation to the era of vision
The journey of exploration and exploitation of mineral resources in the Kingdom began in 1997, as the Ministry of Petroleum and Mineral Resources developed a strategy to develop the mining sector between 1996 and 1997, to search for opportunities in the mining sector, and efforts continued to reach a qualitative shift in the mining sector. After the launch of the Kingdom’s Vision 2030, which aims to diversify the economic base in the Kingdom, and for mining to be the third pillar of the national industry, three strategic initiatives were launched as a start to develop the sector, which requires working on geological surveys for the Kingdom, identifying investment opportunities in this sector, in addition to studying incentives possible for its development.
One of the most important recommendations of the strategy was the issuance and development of the new mining investment system, which takes into account stimulating the development of the sector, which enhances foreign investment by reducing the tax rate to 20%, and thus the Kingdom became among the most competitive mining regions in the world after reducing the rate of The tax, which differed very significantly from the previous tax rate of 45%, and there were no changes to the financial system after the implementation of the system, but the system focused largely on protecting investors in line with international standards.
Among the recommendations that came out of the strategy is the establishment of a specialized unit consisting of a team responsible for directing the method of promoting investment in the mining sector, which undertakes several main tasks, most notably:
- "Strategy" to develop the mining investment path by enhancing qualitative investment, and ensuring the investment of the largest number of companies.
- "Added value" Monitoring the impact of the sector's initiatives on the competitiveness and integration of the sector.
- "Go to market" Create marketing content, investment tasks, and communicate with investors.
- "governance and regulation" improving and maintaining tools and systems, including the website of the Ministry of Industry and Mineral Resources, sectoral standards, developing a Career plan system, and hiring and training employees for specific jobs.
- "Determines process" maps and KPIs for investment enhancement, investor journey integration, and continuous improvement.
- Enable investment stimulation by monitoring, enhancing and improving the value proposition and competitiveness of the Kingdom, structuring investment opportunities conducive to the growth of investment opportunities, and working with existing entities and initiatives to facilitate empowerment efforts in the sector.
- Development of mineral supply chains to make mining the third pillar of the Saudi industry by taking advantage of the Kingdom's mineral resources, domestic demand, and taking advantage of global markets to diversify the GDP and job growth.
Ambitious goals and a comprehensive strategy for the mining sector were defined through Saudi Vision 2030 in cooperation with the National Transformation Program.
Saudi Vision 2030
- Development of ambition and support for the development of the Saudi economy - Raise the competitiveness and productivity of national companies. - Encouraging major Saudi companies to expand globally to become regionally and globally advanced.
- Focus more and set expectations for the mining sector - Expand the exploration and development of mineral resources. - The mining sector's contribution to the GDP has reached 97 billion Saudis. - Review licensing procedures.
- More focus on sustainability and human capital development - Focus more on non-oil exports - Improve innovation and technology, reduce pollution, stimulate water conservation, combat desertification - Develop the local value chain, attract and develop talent
The National Transformation Program
- Prioritize the adoption and implementation of the comprehensive sector strategy - The development of the mining sector has been identified as a priority initiative
- Several initiatives aimed at developing the broader industrial ecosystem and business environment - Development of the Education System for Applied Technology - Local Supply Chain Development - Improve Port Efficiency - Implementation of the National Investment Strategy - rely on hydrocarbon and mineral resources to develop remote areas, and connect the electricity grid to those areas