AMN - Rwanda and Saudi Arabia open for business – comment by Yolanda Torrisi

Among the countries in and around the African continent that recognise the value of mining to the economy and are taking steps to encourage further investment in the sector are Rwanda and Saudi Arabia. In the former, the government is expediting the processing of new mining licence applications while in the latter a new mining investment law has been approved.

Rwanda’s Mines, Petroleum and Gas Board states that the government has made the move to encourage more mining investment as the country moves towards recovery from the impacts of the COVID-19 pandemic. The state agency has also distributed a series of protocols to allow mining companies to resume 100% of their operations with enhanced health and safety measures for their employees.

A release from the agency said: “[The protocols include] adequate tunnel ventilation, de-densification, screening and testing mechanisms, require miners to put in place tracing programs, allow workers to work in shifts and provide relevant PPE, among others.”

With small-scale mining operators, the agency intends to manage them more efficiently by consolidating many of them into collective investment groups. Such groups would get mining licences, which would be open to receive international investments.

The board also plans to formalise regional trade in minerals to support local smelters, refineries and all value-addition and export business. The focus of these measures will be on gold, tin, tantalum and tungsten along with gemstones, rare earths and lithium.

The Mines, Petroleum and Gas Board is seeking to define mining as a priority in the country’s investment code with the goal of attracting international mineral exploration companies and de-risk exploration investments.

In June, the Saudi Cabinet approved a new mining investment law that aims to revolutionise the Kingdom’s mining and metals industry and boost local and foreign investments in the sector. This law will facilitate the establishment of a mining fund to provide sustainable finance for the sector as well as support geological survey and exploration programs. It aims to accelerate foreign investment in the sector as part of efforts to diversify the economy away from hydrocarbons.

Industry and Mineral Resources Minister Bandar Alkhorayef described the law as a strategic initiative that will boost the mining sector’s contribution to gross domestic product by over SR240 billion (US$64 billion), reduce imports by SR37 billion and create 200,000 direct and indirect jobs by 2030.

He said the strength of the mining and metals industry depended on good governance and transparency as these factors boosted investor confidence. “The new law deals with these issues effectively and also aims to achieve sustainability, environment protection, compliance with health and safety regulations.”

The Saudi government aims to more than triple this sector’s contribution to the nation’s economic output and to create more than 200,000 direct and indirect jobs in the sector by 2030.

Government efforts to build an economy that does not largely rely on oil and state subsidies involves a shift towards mining vast untapped reserves of bauxite, the main source of aluminium, as well as phosphate, gold, copper and uranium. The energy ministry estimates the kingdom’s unused mineral resources to be valued at 5 trillion riyals (US$1.33 trillion).

Alkhorayef said the ministry aimed to make the mining sector the third pillar of the Saudi industrial sector by ensuring good governance, clear-cut regulations and a well-defined licensing system.

The new law is in line with the objectives of the National Industrial Development and Logistic Program (NIDLP), which seeks to transform the Kingdom into an industrial power and logistics hub. NIDLP CEO Sulaiman Al-Mazroua said the new law would benefit other major sectors and create job opportunities for Saudi youth.

Other countries in Africa and the Middle East would do well to follow suit so that mining can lead the post-COVID-19 recovery.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com