An internal rail network for the use of the mining industry is the new focus of the Oman Global Logistics Group (OGL) even as the joint GCC rail project has come to a stop, the OGL chief has said.
Abdulrahman Al Hatmi, the CEO of OGL, said they will focus on setting up two rail networks internally for the mining industry.
“We were ready to connect with the GCC network but unfortunately, due to certain development issues related to our neighbour, work on this has been suspended and it has affected the contracts we had. Also, the employees have lost jobs as a result,” said Al Hatmi.
“Therefore, we are now focused on an internal network for the mining industry which will have two routes. The first will connect the Sohar Port and Dank, while the second will connect Thumrait, Shuwaimiya and Duqm,” he added.
He said if the neighbouring GCC states resume work on the Gulf rail network, Oman will be ready to commence the connection from Sohar.
Al Hatmi explained that the rail project for the mining industry will be viable if it focuses on the trade in Gypsum stones which accounts for 6 percent of the Indian market. The gypsum stone is produced in Salalah.
“We studied the markets in some of the countries and found that gypsum and geely were not in high demand. Experts said the global market is slow, which is true. However, we are aiming to corner 6 percent of the Indian market trade,” said Al Hatmi.
“This will make the rail project economically viable and it would not need support,” he added.
Discussing the future of the rail project, Al Hatmi said they needed a mechanism to highlight a strategy to push forward.
“The only thing the rail network needs is a clear development strategy in the mining sector,” he said.
“One needs to ensure that mining reserves are available and documented and a mechanism to extract these reserves is in place,” Al Hatmi explained. It is unclear when the rail project will commence but Al Hatmi stressed that the group is in talks with responsible authorities to expedite it.
Source: Times of Oman, 13 February 2017
Oman’s Ministry of Environment and Climate Affairs (MECA) has initiated steps to revamp its environmental licensing and permitting procedures with a view to making them more “facilitatory” to mining development and mineral processing investment in the Sultanate.
The move, according to a high-level official, is the centrepiece of a new policy framework that aims to address a broad swathe of environment-related issues associated with mining and extractive industrial activities in the Sultanate.
On the anvil is an all-encompassing regulatory framework underpinned by, among other things, amendments to existing environmental legislations, potentially new statutes, planning controls, a new liability regime, and greater clarity on the roles and responsibilities of stakeholder agencies, said Prof Steve Halls, Senior Environmental Expert, MECA.
“It is clear that the challenges the mining industry faces, particularly from the standpoint of the approvals and permitting processes, have perhaps not impeded, but neither have been facilitatory in moving projects forward. At MECA, we are trying to adopt a different approach; we are trying to be more pragmatic and find solutions by working together with the industry to address the environmental challenges that may arise as a result of mining projects,” the expert stated.
Speaking at the Oman Mining & Minerals Exhibition & Conference last week, Prof Halls said the proposed regulatory framework will stipulate measures to prevent pollution and contamination of land, as well as guidelines for the closure and rehabilitation of mines. Additionally, it will set out mechanisms to identify, record, investigate, manage, remediate and report on pollution, he pointed out.
Importantly, the credo ‘The Polluter Pays’ will remain a key guiding principle of MECA’s approach to environmental conservation and safety, the expert stressed.
“Where you can’t prevent pollution, you must minimise the impact through management procedures; And if you fail to comply, then the polluter pays; and (depending upon the gravity of the offence) it could be minimal or a substantial financial fine or even a suspension of the permit.”
Alongside a proposed ‘hierarchy of penalties’, the new framework will also weigh a range of incentives for investors and operators, said Prof Halls.
These are likely to take the form of bonds, reduction in the bond requirements, mechanisms for profit enhancement, financial sops for remediating mine sites for other purposes, and so on.
Long a demand of the mining industry, the drive to revamp environmental licensing processes comes against the backdrop of efforts spearheaded by Tanfeedh (The National Programme for Enhancing Economic Diversification) to zero in on mining, among four other non-oil sectors, as promising alternatives to Oman’s predominantly oil-dependent economy.
In this regard, Prof Halls affirmed MECA’s desire to become an “enabler” of this strategic national goal. “We want to look at how MECA can work with industry to find appropriate solutions to some of the challenges we currently face. It’s only by having an enabling regulatory environment can these economic and social benefits (associated with the mining sector) be accrued.”
He also pledged efforts to speed up licensing and permitting procedures, noting that current delays — extending to over a year in some cases — are unacceptable. “We are trying to help create a supportive yet compliant business environment for the mining sector in Oman that protects and conserves the natural environment,” Prof Halls said.
“It is a process that will take some time, but we want to work with you to find solutions on the way forward. We need implementable strategies, and fair and equitable regulations, and need to improve the approvals process. We are looking to implement a time-limited approvals process.”
MECA, the expert said, is eyeing a roughly two-year timeframe for the roll out of the new environmental regulatory framework. “We are looking at end-2017 and early 2018 for the first phases (of the framework), while amendments and additional legislation will take another year thereafter,” he said. “Our goal is to build a sustainable mining and extractive industries segment in Oman — not one that is reactive and impeded by overly burdensome regulation — but supported and encouraged by regulation.”
Source: Zawya, 25 January 2017
On the back of enhanced activities, the Sultanate’s mining sector registered a significant increase in its revenue for the first half of 2016. According to Hilal bin Mohammed al Busaidy (pictured), Chief Executive Officer of Public Authority for Mining (PAM), there has been 50 per cent rise in the revenue during the first half of this year compared to the corresponding period last year. At the same time, the direct income from the sector to the state coffer witnessed a remarkable rise of 14 per cent to reach RO 12.3 million against RO 10.8 million in the first half of 2015. According Al Busaidy, a total of 53 licences have been given to local companies.
“The new legislation expected to go into effect next year will see a major overhaul in Oman’s mining regulations”, he said in comments to the Observer. According to Al Busaidy, the new law will have local content requirements, incentives for investment and solution to issues relating to licenses. “We want to start creating an attractive investment environment to enable attracting foreign and local investments”, he said. The law also stipulates an Omanisation obligation as a condition of both exploration licenses and extraction concessions. Mining activities in Oman are set to increase considerably in the coming years, following the discovery of significant reserves of mineable minerals, including gold, copper and rare earths.
As part of expediting licensing process, the Authority is coordinating with other government agencies to approve mining blocks, he said. These blocks will then be divided into smaller concessions and allocated to investors. Although these measures have short-term growing pains for the industry, in the long run they will have a positive impact on GDP growth and non-oil diversification, he said. The formation of a public mining development company for the sector is part of a major strategy since mining is expected to drive non-oil income. The massive fall in oil revenue over recent years has put huge pressure on non-oil sectors to fill the gap. Last year the Authority doubled the mining royalty rate to 10 per cent from 5 per cent.
Oman boasts a considerable mineral resource base, concentrated mainly in its 700-km by 150-km mountain range, which offers an exposed ophiolite geological outcrop containing minerals such as copper, gold, silver, chromite, lead, nickel, manganese and zinc, while other regions in the Sultanate offer deposits of dolomite, limestone, gypsum, silica, cobalt, marble and iron.
Source: Oman Daily Observer, 6 December 2016
Buoyed by surging export growth, Gulf Mining Group, one of the largest mining and mineral processing corporations in the Sultanate, plans to boost production of limestone and gypsum — commodities destined primarily for the burgeoning steel and cement sectors of the Indian sub-continent. The production ramp-up is part of an array of ambitious new investments and capacity expansions planned by the wholly Omani owned mining conglomerate on the back of a vigorous push by the government to open up the nation’s mining sector to commercial development.
Gypsum output, currently averaging 86,000 tonnes per month, is proposed to be nearly doubled to 150,000 tonnes by early next year, according to a top official of Gulf Mining Group. “We are one of the largest producers of gypsum in Oman — and perhaps in the Middle East too,” said Mohammed Yahya al Shabibi, Chief Executive Officer. “Our Group has won a number of international trophies, notably from Europe, Asia, the UK, and regionally as well, that recognise our capabilities in this field.” Speaking to the Observer, Al Shabibi said the Group is weighing plans to set up a gypsum value-adding project in Salalah, subject to confirmation of the allocation of natural gas for the venture.
“We are in the process of setting up a processing plant for gypsum board manufacturing and other related products in Salalah, but this is dependent on the availability of electricity and gas for the project. We have been assured by the authorities that our requirements will be met,” the CEO said. Significantly, new investments are envisaged across most of Gulf Mining’s existing portfolio of eight mines. Production of limestone is also proposed to be doubled to 100,000 tonnes per month up from the present output of around 50,000 tonnes, according to the executive.
Recognised as one of the largest producers of lumpy chrome ore, which is a key raw material in the production of ferrochrome, Gulf Mining has bolstered output of this commodity to between 20,000-25,000 tonnes per month. Roughly half of this output is earmarked for the Group’s ferrochrome smelting subsidiary in Sohar Port, while the balance is exported, Al Shabibi said.
Also in the Group’s sights are the large deposits of laterite (a type of iron ore) in Ibra.
“We have a laterite quarry, but output is modest at present. However, as part of our future plan, we aim to join hands with a local company to invest in one of the largest iron ore mines in Ibra. A processing plant planned as part of this investment will increase the concentration of iron ore to 60 per cent. This is envisioned in our future investments,” the CEO said.
Gulf Mining’s appetite for growth has taken the Group to faraway Albania in East Europe where it has invested in one of that country’s largest marble quarries. Production is pegged at around 300 blocks of marble, with plans afoot to boost output to around 500 blocks. “We also have some concessions for chrome ore mining in Albania, while nickel will be added in the future,” he stated.
Source: Oman Daily Observer, 28 November 2016
Gulf Mining Group, one of the largest mining and mineral processing corporations in the Sultanate, is weighing plans to set up the Sultanate’s first manganese ferroalloy smelter at Sohar — part of the corporation’s strategy to add value to Oman’s prolific mineral resources.
The initiative, coupled with a separate plan to triple the capacity of its existing ferrochrome smelter at Sohar Port and Freezone, will entail a combined investment ranging from $50-100 million, according to a top official of the group.
Mohammed Yahya al Shabibi, Chief Executive Officer — Gulf Mining Group, said the proposed manganese ferroalloy smelter will be constructed adjacent to ferrochrome smelter owned by subsidiary Gulf Mining Ferro Alloy (GMFA) at the free zone. The project will — for the first time — add value to Oman’s manganese ore, production of which has hitherto been exported.
“In the first phase, we aim to start with 4,000 tonnes of manganese ferroalloy, although plant capacity will depend on the size of our manganese reserves. Proven deposits are estimated at 1.5-2 million tonnes of manganese, which will be processed and value-added similar to how we are value-adding our chrome ore resources,” Al Shabibi told the Observer.
Manganese ferroalloys are primarily added to steel to increase its strength and toughness.
Importantly, Gulf Mining also plans to ramp up the capacity of its ferrochrome smelting operations at Sohar to a world-class 150,000 tonnes per annum, up from the present 50,000 tonnes.
Implementation of either initiative is however predicated on the availability and supply of electricity, the CEO stressed. “We have been assured by Majan Electricity Company that new generation capacity is being developed in the Sohar area, upon the completion of which the required allocation of electricity supply will be committed for our project,” Al Shabibi said.
Gulf Mining Ferro Alloy’s two-furnace smelter project was completed in 2014, but for want of adequate power supply, only one of the furnaces was put into operation initially — a supply shortfall that hurt the company’s bottom-line, according to the CEO. “Our project economics are based on a two-furnace operation, and only when both furnaces are in operation can we hope to turn a profit,” said Al Shabibi.
Source: Oman Daily Observer, 27 September 2016
Gulf Mining Group, one of the largest mining and mineral processing corporations in the Sultanate, has plans to set up a major potash mining project targeting prolific reserves in central Oman.
According to the Group’s Chief Executive Officer, Mohammed Yahya al Shabibi , initial investments in the project are estimated at between $300 — 500 million, effectively making it the single largest mining related venture in the Sultanate.
“We have joined hands with international investors — whose identities I cannot reveal at this stage — as strategic partners in the development of potash mines in central Oman,” Al Shabibi said. “Omani wealth funds have also indicated interest in participating, while local banks are planning a syndication to support the financing,” the CEO added in exclusive comments to the Observer.
The initiative comes against a backdrop of heightened efforts by the Omani government to accelerate the development of the nation’s prodigious mineral resources in support of its economic diversification goals. Mining has been identified as one of five strategic non-oil sectors, alongside manufacturing, tourism, fishing and logistics, that have been targeted for aggressive development towards this end.
Potash is a primary raw material used in the manufacture of fertiliser for the global agriculture industry. Its high nutrient concentration and relatively competitive price makes it a highly sought after global commodity.
Underscoring the strategic significance of this commodity, the State General Reserve Fund (SGRF), the Sultanate’s sovereign wealth fund, recently inked a deal with Australian-based mineral exploration company Elemental Minerals Ltd to participate as a strategic investor in the development of a major potash project in the Republic of Congo.
Significantly, exploratory work centring on potash deposits in central Oman has already commenced, according to Al Shabibi. “Our initial studies have shown that the deposits are commercially viable for development. At the moment, we are trying to pinpoint the exact locations where potash concentrations are ideal. This is also necessary because we do not want to come in the way of oilfield activities in this area,” the CEO noted.
The planned investment represents a major step-up in Gulf Mining Group’s business portfolio, which includes investments and activities across mining, mineral processing, minerals trading, shipping and hospitality.
Various group companies, notably its flagship Gulf Mining Materials Company, are currently engaged in the development of industrial minerals, such as chrome ore, manganese, limestone, marble, laterite and iron ore. The Group also has a stake in Oman’s first ferrochrome smelter currently in operation at Sohar Port and Free Zone.
Output from almost all of these operations are targeted for significant upsizing in line with the company’s ambitious strategy to expand its presence nationally and internationally, said Al Shabibi. “Gulf Mining Group continues to play a major role in supporting the government’s vision for the mining sector in driving non-oil economic growth,” he explained.
“We appreciate the support extended by the government, represented by the Public Authority for Mining (PAM) and its CEO, Hilal bin Mohammed al Busaidi, in facilitating our growth objectives. The support of other government bodies, including the Ministry of Environment and Climate Affairs, Ministry of Housing, and so on, is commendable as well.”
“We could however do with more support, especially in the development of the infrastructure necessary to help us add value to Oman’s natural resources through downstream processing,” Al Shabibi added.
Source: Oman Daily Observer, 20 September 2016
On the back of large investments by the private sector, the mining sector contribution to the national GDP is expected to witness remarkable growth in the coming years. "Mining is one of the five sectors acknowledged for driving growth in the long term and helping the government in its economic diversification strategy. The sector is a major contributor to the national GDP as well as employment generation", said Salim Abdullah al Rawas, chairman of Kunooz Oman Holding.
Talking to the Observer on the sidelines of signing an investment agreement with Oman Investment Fund (OIF), Al Rawas said that while GDP originating from other sectors contracted in the previous years, mining and quarrying sector recorded positive growth in 2015.
Although the figure of the amount in the agreement was not announced, OIF, a sovereign wealth fund, acquired 20 per cent of shares in Kunooz on Thursday.
On the occasion, the company also announced its plans to float 25 per cent of its shares on the Muscat Securities Market as part of initial public offer (IPO) in the first half of 2017. Oman Arab Bank has been appointed financial adviser.
Kunooz Oman Holding was incorporated in January 2014 following the consolidation of five subsidiaries and two associates within the mining, quarrying, transportation and construction materials sectors.
Plans are under way to set up mineral processing and refining facilities in the Port of Duqm's industrial zone mining cluster.
Al Rawas said that the new mining law to be announced by the government is expected to provide a major overhaul of the Sultanate's mining regulations.
"A comprehensive strategy with more transparency for the sector will definitely broaden the base of the sector and its contribution to GDP", he said.
GDP from mining in Oman is expected to be RO 147.46 million by the end of this quarter, according to Trading Economics global macro models and analysts' expectations. In the long-term, the GDP is projected to trend around RO 194.05 million in 2020.
Al Rawas said that the government should have a fast-tracking policy which should not be bureaucratic and time-consuming.
The government is strongly committed to diversifying its economy in order to reduce its reliance on oil exports; the mining and downstream capabilities of Kunooz, therefore, are set to play central role in this strategy.
The inclusion of OIF as a shareholder is set to increase investor confidence, and strengthen Kunooz Oman transformation into a public company.
"A successful IPO can improve Kunooz Oman access to capital, new mining opportunities and help contribute to the Sultanate's strategy to reduce dependence on oil", he said.
In the beginning of this year, four state-owned investment branches of Oman have formed a RO 100-million mining development company -- Mining Development Oman to stimulate the country's mining sector.
While the state firms hold 60 per cent of the shares, the remaining 40 per cent shares equivalent to RO 40 million is to be obtaining from the market through IPO.
Oman's mining sector foresees notable growth in the next few years, following the discovery of sizeable reserves of minerals, gold, copper and rare earths, which will significantly boost mining activities and attract investment to the Sultanate.
Source: Zawya, 4 September 2016