MUSCAT, JAN 27 – Investments in harnessing the mineral potential of a tiny segment of copper-gold-rich Block 10 in Yanqul in the western part of the Sultanate could swell to as much as $1 billion, according to a key executive representing the majority investor in the project. Kari J R Haataja (pictured), CEO and Managing Partner of EXO Mining, which is a 51 per cent shareholder in the Yanqul Copper-Gold Project, said a copper smelter could also be part of the ambitious development should future excavations unearth further large-scale commercial finds.
“The copper-gold, and other minerals and metals that are potentially there in Block 10 already represent a huge opportunity for us,” said Haataja. “What we will look to do in the near future is to also to bring other partners, investors and strategic partners for other metals where we don’t necessary need to be a majority shareholder, but we will promote the opportunities in Oman to other investors as well.”
Last Wednesday, EXO-Mining signed an agreement with state-owned Oman Mining Company (OMCO), the licensee of Block 10, as well as the Minerals Development Oman (MDO), the government’s new mining investment and development flagship, for a majority 51 per cent stake in the Yanqul Project Company, a special purpose vehicle that will invest in unlocking the potential of just 10 per cent of the 370 sq km Block 10. OMCO retains a 29 per cent stake in the project, with MDO owning the remaining 20 per cent. The partners are committed to investing around $100 million in the first three years of the project.
According to Haataja, however, the estimated investment in harnessing the full mineral potential of the roughly 40 sq km area falling within the remit of the new project company could balloon to around $1 billion going forward.
“As the known (copper-gold) deposits only cover 10 per cent of the total Block 10 area, we believe by starting further exploration of the larger area, we may find additional deposits of copper which then would give reason to invest in a large processing plant or potentially, together with other operators, in a smelter. This is a longer term view,” Haataja said.
“But right now, for the known deposits, we have estimated that the total investment is approximately one billion dollars, including the exploration, including the mining, including the concentrate plant, pre-production cost, everything!”
EXO Mining — part of EXO Group, an internationally active equity investor through direct investments and joint ventures with established industry players — is set to play a major role in the Yanqul Copper-Gold Project. “We will focus, in the first year, on proper exploration while bringing in the resource base to proven reserves. In the meantime, we will also be doing the mining design, mine plan, process flows, engineering, and so on, which will then define the final investment in the first phase.”
As for whether EXO Mining will be the operator of the Yanqul project, Haataja replied: “That will be decided together with OMCO and MDO. But typically, we either build our own team — and obviously this will also mean tapping into the expertise and experience of OMCO, and their knowledge of past mining activities. We will also consider bringing in a strategic partner as an operator and management for the mining activities and the concentrate.”
EXO Group has invested close to $2 billion across the globe as an equity investor, notably in the Nordic countries and southern Europe. In the Sultanate, EXO Mining has a considerable portfolio of investments through affiliations with EXO Oman LLC and Al Tamman Trading Establishment LLC. EXO Mining has interests in marble and limestone quarries located in Sur, Bahla and Al Khabourah, with an agreement for a fourth quarry in Suhar due to be signed shortly. The company also operates a major state-of-the-art stone processing plant in Suhar Industrial Estate.
Importantly, Oman is set to be an important focus of EXO Mining’s investments and activities going forward.
“We believe that Oman represents a fantastic opportunity in the mining sector, and we want to partner with other players in other metals as well,” the CEO added.