Is Saudi Arabia becoming a global mining hub?

Last week, I was invited to attend the third Future Minerals Forum, the first major event in the Kingdom in 2024, featuring over 13,000 government and private sector delegates from 145 countries. Since its inception two years ago, the forum has evolved into a global platform shaping the future of minerals by facilitating the creation of sustainable value chains.

What garnered significant attention during the forum was the announcement by Bandar Alkhorayef, the minister of industry and mineral resources, that Saudi Arabia has revised upward its estimates for untapped mineral resources to $2.5 trillion from a forecast of $1.3 trillion in 2016. This represents a 90 percent increase, attributed to the discoveries of rare earth elements and transition metals such as phosphate ore, zinc, and gold.

Also unveiled at the forum were details of the 33 sites available for exploration this year and the first mining belt to be made available for exploration in the region at Jabal Sayid, encompassing an area of 4,000 sq. km. Furthermore, the Kingdom has established a $182 million mineral exploration incentive program to expand its mining sector and tap into phosphate, gold, copper, and bauxite reserves. This program aims to de-risk investments in exploration, securing new commodities, greenfield projects, and supporting junior miners.

It is worth noting that as the world embarks on an ambitious decarbonization journey toward net zero, there are challenges to be faced in supplying the critical minerals required for cleaner energy technologies.

With strategic partners worldwide, deals worth $7.2 billion were signed during the forum. The agreements focused on mining exploration, technology, communications, and the implementation of sustainability standards, localization, qualification, and industrialization in the minerals sector.

We at BMG Financial Group had our share of discussions with several mineral companies from different countries to raise capital for their global expansion, including setting up joint ventures in the Kingdom. Our advisory mandates will include approaching strategic investors from Saudi Arabia and the Gulf Cooperation Council countries as equity investors and structuring fixed-income notes as sukuk, subject to the Capital Market Authority and other authorities' approvals.

One of the core competencies that BMG Financial Group focuses on is advising the mining sector. With $2.5 trillion of untapped mineral resources, Saudi Arabia is undoubtedly becoming the world's most promising future global mining hub.

Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.