Mining the 'new oil'

In a recent article published on the very pages of the Oman Daily Observer, my distinguished friend and colleague Conrad Prabhu, shared the strategy and the numbers behind the leading position of the Sultanate of Oman in the global export of gypsum.

Today I want to reflect on the enormous opportunities that Oman is experiencing within the global minerals market. Probably not everyone knows that Oman’s mountains host intact and exposed ophiolites, which could contain metal deposits such as chromite, cobalt, copper, gold, lead, magnesium, manganese, nickel, palladium, platinum, silver, vanadium, and zinc.

In a report published in late 2021 by the US International Trade Administration, it was revealed that Oman identified large-scale copper mining as a strategic project, and that several foreign mining companies were and are active in Oman. Especially, a joint venture with an Australia-based mining firm planned to construct a copper concentration plant that could produce one million metric tonnes per year. In September 2020, British firm Savannah Resources sold its mining permits for two copper blocks in Oman to Australia-listed mine development company Force Commodities.

In the current geopolitical turmoil, Oman has a rare opportunity to grab. The supply of oil and gas, we very well know, has been hit by a “tsunami” in the past weeks. But beside the same old commodities, the Sultanate of Oman can now gain the spotlight as a mineral rich global supplier. The global demand for copper, for example, has grown from 23.6 million metric tonnes in 2019, to the current estimate of 25.1 in 2022. Oman can start climbing the production ladder, despite competition being tough. Currently, Chile is the undisputed leader in Copper extraction, with 5.6 million metric tonnes a year, supplying nearly a fifth of the international market.

The mining sector is certainly one of the Omani government’s main focus areas as part of the Sultanate of Oman's economic diversification programme. Oman’s mining industry has attracted growing interest from both foreign and local operators. Also, Oman has become the top GCC producer and exporter of ferrochrome. The government established the Public Authority for Mining (PAM) in 2014 to regulate the mining sector, and two years later it established Minerals Development Oman (MDO) as a new holding company.

In August 2020, a royal decree dissolved PAM and transferred its powers to the newly renamed Ministry of Energy and Minerals, which could increase transparency and competitiveness in Oman’s mining sector. In July 2021, the Ministry of Energy and Minerals (MEM) created a new unit, Industry Development of Energy and Minerals, to focus on the downstream processing of minerals and value addition in-country instead of exporting unprocessed raw materials.

Additionally, Oman has the strategic advantage of a pristine location. The proximity to India, and the new port of Duqm, makes a perfect combination for a trade highway. The port was officially inaugurated in early February under the auspices of HH Sayyid Asaad bin Tarik al Said, Deputy Prime Minister for International Relations and Cooperation Affairs, Personal Representative of His Majesty the Sultan in the presence of their Majesties the King and the Queen of the Belgians.

With a growing global demand for minerals, the right investments on land to extract accordingly, and the logistic routes in place, the Sultanate of Oman could experience a new economic renaissance in the very near future.