- Bandar Alkhorayef, the Kingdom’s minister for industry, says multibillion riyal program underway
DAVOS: The opportunities presented by Saudi Arabia’s mining industry are “mind-blowing,” the country’s minister for industry and mineral resources told Arab News.
Speaking on the sidelines of the World Economic Forum in Davos, Bandar Alkhorayef — who was appointed to the newly created post last summer — said many of the Kingdom’s mineral resources were “untapped,” and that a multibillion-riyal investment program was now underway to find and exploit new sources of natural wealth.
Saudi Arabia has launched a five-year geological survey of its natural resources, hoping to identify and quantify new wealth in the form of gold, phosphates and other valuable minerals.
Some experts believe that the Kingdom could be a source of precious earth metals valued in hi-tech production processes.
If these are found in significant quantities, it could help stimulate domestic high-tech manufacturing processes in Saudi Arabia.
“The government has linked mining with industry. We’ll export raw materials of course, but we’re more interested in the wider value chain,” Alkhorayef said.
A new mining law will soon be enacted, allowing for a revamped regulatory regime in the mining industry, and new investment in mining infrastructure that could reach tens of billions of riyals, he said, adding: “It shows you how serious we are about the mining industry.”
He joined the government after 26 years at the top of private sector business, with the Alkhorayef Group industrial conglomerate.
“The core of the Vision 2030 strategy is to diversify the economy, and industry and mining are key parts of that. My view as a minister is to be an enabler for the transformation of those sectors,” he said.
A key agency is the Saudi Industrial Development Fund, which aims to distribute funds to the private sector to encourage expansion.
Its available capital has been increased from SR65 billion ($17.3 billion) to $100 billion, and its mandate has changed to cover new industrial and technological sectors, Alkhorayef said.
“Both industry and mining are capital intensive and need long-term stability and visibility. Our aim is to be profitable in order to compensate investors for the risk they take,” he added.
“Investors always look at risk and return, and they make decisions based on that. Our vision is to open up opportunities for local and foreign investors.”
His ministry is also closely involved in the rollout of the National Industrial Development and Logistics Program, the big strategy to transform the Saudi economy launched a year ago by encouraging investment in economic growth via the creation of special economic zones across the Kingdom.
“It’s going great,” Alkhorayef said. Two zones have already been opened in Riyadh and Jeddah, and there are further projects under review.
He met with investors in the logistics sector while in Davos, and further investment is expected.
He said in Saudi Arabia’s case, the advantages presented to investors by the Kingdom’s natural resources, demographics and geographical location outweigh any geopolitical risk.
Alkhorayef added that it is relatively risk-free in terms of currency fluctuations because of the dollar peg and freedom of capital. “I worked in a global company, so I understand those kinds of risks,” he said.