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Oman to offer 110 new mining blocks for investment

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The Public Authority for Mining (PAM), the nodal agency for regulation and policy-making governing all mining and mineral related activities in the Sultanate, has identified as many as 110 new mining blocks for investment in key locations around the country.


Efforts are currently underway by the Authority to secure the requisite permits from an array of government ministries and agencies whose approvals are mandatory under existing statutes before exploration and developmental work can commence at any of these sites. It is also focused on delineating the boundaries of each block.


This process of securing pre-approvals for mining blocks before they are auctioned off in a competitive tendering process is one of several key initiatives proposed by the Mining Labs to help accelerate investment in Oman’s mining and mineral processing industry. The sector has been ranked alongside Fisheries, Tourism, Manufacturing, and Transport & Logistics as pivotal to driving Oman’s economic diversification.


The Mining Labs, which were hosted by Tanfeedh (The National Programme for Enhancing Economic Diversification) early last year, have called for an overhaul of procedures governing the issuance of mining licenses and permits. Current procedures have been described as protracted, cumbersome and out-of-date.


A modern licensing system advocated by the Mining Labs moots the establishment of a licensing mechanism whereby the Authority identifies promising mining blocks based on its geological studies and maps. The Authority then obtains the requisite approvals from the relevant authorities before offering them for investment in a public tender.


Currently, as many as eight government bodies have to give their consent before mining exploration and development can commence anywhere in the Sultanate. These organisations comprise the ministries of Environment and Climate Affairs (MECA), Interior, Defence, Health, Tourism, Transport and Communications, Heritage and Culture and Regional Municipalities and Water Resources, as well as the National Centre for Statistics and Information (NCSI).


“The current licensing framework allows the private sector to identify the sites the companies wish to explore or mine, requiring a lengthy and complex eight-point approval process,” a report by the Implementation Support & Follow-up Unit (ISFU) of the Diwan of Royal Court explained. “This is often unsatisfactory and discourages investors in case of (approvals not coming through despite the long wait). In order to enable more targeted investments, the Public Authority for Mining sought to identify promising mining blocks based on its existing geological studies and maps. Then, approvals for these blocks from the eight relevant authorities shall be obtained, provided that mining blocks shall be introduced in a public tender.”


The Lab mooted an integrated mechanism for securing the requisite approvals from the government stakeholders within 30 days. It also stressed the importance of clarity and minimal bureaucracy in application procedures in order to speedy up the licensing process. Under the revised framework proposed by the Mining Labs, the approval process is limited to 30 days for exploration licenses, and 55 days for mining licenses.


Significantly, Minerals Development Oman (MDO) — the Sultanate’s mining investment flagship — is expected to play a key role in the development of a number of pre-approved mining sites. Backed by four sovereign wealth and national funds, MDO is seen as well-positioned to accelerate investments in the mining sector, as well as develop competitive business models that will serve as a template for investment in this key industry.


Established in January 2016, MDO’s shareholders comprise the State General Reserve Fund (SGRF), Oman Oil Company SAOC, Oman Investment Fund (OIF) and Oman National Investment Development Company SAOC (Tanmia).


The new Mineral (Wealth/Resources) Law promulgated by Royal Decree 19/2019 earlier this month is expected to address many of the regulatory shortcomings that have constrained the growth of the sector, say experts.


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