Ministry of Industry and Mineral Resources

The Ministry of Industry and Mineral Resources is the authority responsible for managing the industrial and mining sectors in the Kingdom of Saudi Arabia. Its main headquarters is located in the capital, Riyadh. Its responsibilities include issuing regulations and rules that govern the operations of both the public and private sectors, promoting investments in these sectors, and discovering and utilizing the Kingdom's mineral resources.

The Ministry of Industry and Mineral Resources was established under Royal Decree No. (A/472) dated August 30, 2019. This decree led to the establishment of the Ministry of Industry and Mineral Resources and the transfer of responsibilities related to the industrial and mineral sectors to it. The ministry officially started its operations on January 1, 2020.

The Ministry of Industry and Mineral Resources aims to promote the industrial and mining sectors and contribute to achieving sustainable development in line with Saudi Vision 2030. These sectors have been adopted to diversify the national economy and increase their contribution to the gross domestic product (GDP). This is achieved through the implementation of initiatives under the National Industrial Development and Logistics Program, which aims to transform the Kingdom into a leading industrial force and a global logistics hub.

The industrial and mineral resources system in the Kingdom includes the Ministry of Industry and Mineral Resources, the Royal Commission for Jubail and Yanbu, the Saudi Export Development Authority, the Saudi Authority for Industrial Cities and Technology Zones (MODON), the Saudi Geological Survey Authority, the Saudi Export-Import Bank, the Saudi Industrial Development Fund, and the Industrial Center. The industrial and mineral resources system is supported by the National Industrial Development and Logistics Services Program and the Local Content and Government Procurement Authority.

The initiatives of the Ministry of Industry and Mineral Resources, the National Industrial Development and Logistics Services Program, and several related programs and entities have succeeded in increasing the number of industrial establishments from 7,206 factories established over forty-two years to 10,966 industrial facilities as of May 2022. The national industrial strategy aims to propel growth in the sector, targeting reaching approximately thirty-six thousand factories by 2035 and covering twelve sub-sectors to diversify the industrial economy. More than eight hundred investment opportunities have been identified, valued at SAR1 trillion, as one of the sustainable growth objectives for the sector. This seeks to yield economic returns for the Kingdom by 2030, which include roughly tripling the industrial gross domestic product by three times and doubling the value of industrial exports to reach SAR557 billion.

Through its National Industrial Strategy, the Kingdom aims to empower the private sector and enhance the flexibility and competitiveness of the industrial sector. This includes ensuring industrial resilience that guarantees consistent access to essential goods, leading regional industrial integration for value chains, capitalizing on the strengths of the Saudi economy, achieving global leadership in a selection of products, and investing in promising new technologies.

According to the classification of the National Industrial and Mining Information Center, industrial activities in the Kingdom include manufacturing industries, printing, and reproduction of recorded media, water collection, treatment, and distribution, in addition to electricity, gas, steam, and air conditioning supply. The sectors also involve furniture manufacturing, the production of machinery and equipment not classified elsewhere, and computer, electronic, and optical product manufacturing. Moreover, it covers the making of wood and cork products, basic metals, motor vehicles, trailers, and semi-trailers. Electrical equipment manufacturing, leather and related product production, basic pharmaceuticals, pharmaceutical preparations, chemical substances, food and beverage products, textiles, paper, and its products, coking coal and refined petroleum products, other transport equipment, rubber and plastic products, other non-metallic mineral products, and formed metal products, excluding machinery and equipment.

The industrial sector initiatives encompass the development of the non-profit sector, the establishment and acquisition of manufacturing technology, and the Competitive Capacity Program for energy price reform. They also involve the enhancement and improvement of customs exemption mechanisms, combating unfair competition in international trade, industrial cluster standards, manufacturing trade policy, improving legislative frameworks within the industrial sector, ensuring sustainability in industry, the Industrial Capacity Development Center, the Digital Services Platform for the industrial investor's journey, the competitiveness of national construction costs, the Industrial Council, and the establishment and operation of the National Center for Industrial and Mining Information.

The value of mineral resources in the Kingdom is estimated at around SAR5 trillion. The Kingdom aims for the mining sector to become the third pillar of Saudi industry by 2030. The comprehensive strategy for the mining sector is built on four pillars: launching the regional geological survey program to provide and publish geophysical and geochemical data to reduce investment risks; providing a conducive investment environment by developing the legal and regulatory framework for mining in the Kingdom; reviewing environmental and social practices and corporate governance; achieving integrated value chains; and offering support and incentives that reach up to 90 percent for investors.

The comprehensive mining strategy aims to develop integrated value chains to enhance the social and economic impact of mineral resources. This entails accelerating development in mineral exploration and extraction. Concurrently, there's a focus on developing intermediate industries, encompassing refining and smelting processes to manufacture primary materials such as aluminum alloys and steel blocks. The transformative industrial phase involves the production of semifinished products like iron and aluminum sheets and the final products, including iron pipes and rods.

The Ministry of Industry and Mineral Resources launched the Accelerated Exploration Program at the beginning of 2022, with the aim of completing the licensing process in accordance with the mining investment system. This helps attract quality investments in the mining sector and increases spending on exploration operations. During the past decades, several intensive exploration operations were carried out at the Khnaiguiyah site, which contains about twenty-six million t of zinc, manganese, copper, and gold ores.

Three exploration campaigns were conducted in addition to prospecting over an area exceeding one hundred thousand m. A three-dimensional geological model was built in collaboration with SRK Consulting. As a result, four separate mineral bodies rich in copper and zinc were identified at the Khnaiguiyah site. An exploration operation manual was issued in accordance with the adopted international standards. Detailed exploration studies of mineral deposits were provided, along with advanced studies for targeted sites.

The Ministry of Industry and Mineral Resources has allocated fifty-four sites for mining reserves, with an area approaching four thousand km. The first phase of the projects under the Regional Geological Survey Program initiative in the Kingdom was launched, covering an area of more than six hundred thousand km and encompassing the entire geological region known as the Arabian Shield.

The Ministry provides facilities for investors in the sector by introducing a fully digital mining platform. It offers several incentives, including co-financing up to 75 percent of any new investment, a discount of up to 90 percent on sales of local transformational industries projects, support for local content, and increasing employment opportunities for citizens in new mining projects.

The Kingdom holds an international mining conference every January. The second edition was held from January 10 to 12, 2023, at the King Abdulaziz International Conference Center in Riyadh. The topic discussed was Towards establishing reliable and flexible mineral supply chains in Africa and West and Central Asia.

The initiatives of the mining sector included the launch of technical and financial guiding principles for obtaining mining licenses, governance and digitization of government lands, the launch of technical guiding principles for mining industries, the development of the building materials licensing sector, achieving sustainability for the mining sector, developing governance and business models for the mining sector and building the necessary capacities, launching the Saudi Mining Services Company, approving and implementing the comprehensive strategy for the mining sector, amending the mining investment system and regulations, developing the mining platform, studying the impact of energy and water on the mining sector, establishing a professional Saudi mining authority, preparing and operating a technical support team to implement the strategy, establishing a fund to support the mining sector, developing cadres and national forces in the field of mining, launching technical guiding principles for the optimal use of mineral resources in the new project, supporting the requirements of the mining sector for infrastructure and commercial regulations, and establishing an exploration incubator.