Move to cancel dormant chromite mining licenses

The Public Authority for Mining (PAM) is weighing a decision to either renew or cancel dozens of chromite mining licenses that have remained “inactive” for inordinately long periods of time without being developed or exploited by their licensees.

The move comes amid a growing crunch being faced by, among others, ferrochrome smelters operating at Sohar Freezone that require high-quality grades of Omani chromite ore as feedstock for their operations. With much of the country’s current output of chromite ore currently being exported under existing supply commitments, the government has been compelled to consider more strident measures to ensure adequate supplies of locally sourced chromite ore to the nation’s fledgling, but promising, ferrochrome smelting industry.

One such measure being contemplated by the Public Authority for Mining (PAM) is the revocation of chromite mining licenses that have not been acted upon for five years and more.  The initiative has the backing of the Implementation Support & Follow-up Unit (ISFU) – a task force operating under the auspices of the Diwan of Royal Court to fast-track approvals of projects deemed imperative to fuelling Oman’s economic diversification.

Explaining the rationale behind the review of inactive chromite mining licenses, the Unit said: “Many Omani lands contain valuable chromite ores that have not been exploited yet, although many factories need it to cover their expansion plans, and thus increase revenues of the Sultanate. Therefore, in order to make the best use of such raw materials, the initiative aims to review previous and inactive licences to be classified, as well as exploiting the sites that still have mineral resources.”

A team comprising officials of the Public Authority for Mining and ISFU reviewed as many as 50 chromite mining licenses that were dormant for extended periods of time.  Of this number, 38 licenses that were issued prior to 2015 were cancelled following due process. Barring two other licenses which are the subject of ongoing litigation, the others – particularly those issued during 2015 and later — were submitted for the consideration of the licensing committee of PAM for renewal.

An estimated 670,000 tons of chromite ore valued at around RO 19.6 million were produced at various sites across north Oman during 2019.  This compares with an output of 836,000 tons of ore, worth over RO 30 million, produced in 2018.

China is among the biggest markets for Omani chromite ore exports, but increasing quantities are being channelled towards a cluster of ferrochrome smelters that are in various stages of development and operation at Sohar Freezone.

Chromium extracted from chromite ore is used in chrome plating and alloying for production of corrosion resistant superalloys and stainless steel. Chromium is also used as a pigment for glass, glazes, and paint, and as an oxidizing agent for tanning leather.