Oman Minerals & Mining

Exhibition & Conference

16-18 JANUARY 2017 I Hall 5, Oman Convention & Exhibition Centre

Under the patronage of His Excellency
Nasser bin Khamis Al Jashmi Under secretary of the Ministry of finance

Oman set to become world's largest gypsum exporter by 2018

Muscat:June 25: Oman is on track to being crowned as the world's largest exporter of gypsum by 2018 on the back of surging output that underscores the immense potential of the Sultanate's mining sector to fuel the nation's long-term economic development. Exports are projected to surpass 10 million tonnes per annum in 2018, up from 5.85 million tonnes at the end of 2015 - a phenomenal increase that industry experts say will position the Sultanate as a global supplier of gypsum in the coming years. Oman's growing prominence as an exporter of gypsum - a basic raw material for cement and gypsum board manufacturing - comes against a backdrop of soaring demand from a number of Asian, African and Far Eastern nations.

At the same time, major suppliers, notably Thailand, are faced with limited reserves and are drastically cutting down on exports to feed their own domestic industries. Currently ranked the seventh largest producer in the world, output is projected to jump to around 7 million tonnes by the end of 2016, rising to around 9 million tonnes by 2017 before topping 10 million tonnes a year later."These export projections are ground-breaking for Oman's mining sector," commented Ramachandran, Director of Oman-based USG Boral Zawawi joint venture, a major producer and exporter of Omani gypsum.

"They're a vindication of the great importance accorded by His Majesty the Sultan to economic diversification aimed at developing non-oil activities. Gypsum exports have the potential to drive GDP growth through non-oil exports, create employment opportunities, enhance revenue growth for the government through royalties, as well as to ports and the future railway network, and fuel economic development in general."

"Export volumes have jumped a phenomenal 20-fold over the past five years, from a mere 0.30 million tonnes in 2010 to 5.85 million tonnes last year. This increase has been driven primarily by galloping demand in India, Japan, Taiwan, Indonesia, Vietnam, and Bangladesh. For all the known reasons, Oman has emerged as the single most important source for high grade natural gypsum for cement and gypsum board manufacturers across Asia and South and East Africa," Ramachandran added.

Cement manufacturing accounted for roughly 61 per cent of the 252 million tonnes of gypsum produced globally in 2015, with gypsum board industries consuming 33 per cent of the total. Global gypsum demand is projected to burgeon by an average compound annual growth rate of 10 per cent to reach 870 million tonnes by 2026. Much of the demand is driven by India and the Asean countries.

With gypsum resources estimated in excess of one billion metric tonnes, Oman is well-placed to meet the rising global demand for this commodity. The potential for further domestic value addition of gypsum, notably through the establishment of gypsum board projects is quite limited commercially, it is pointed out, as both Oman and the United Arab Emirates currently boast a sizable surplus manufacturing capacity.

Also, boding well for Omani exports are the dynamics driving global gypsum demand and supply over the 2016- 2030 timeframe. India, just across the Arabian Sea from Oman, has a requirement estimated at over 300 million tons of imported gypsum over the next 15 years.

Source: Oman Daily Observer, 25 June 2016

MDO to catalyse investment into Oman's mining sector

Muscat: Minerals Development Oman (MDO), the newly established executive arm of the Public Authority for Mining (PAM), envisions a major role for itself in attracting international investment and technical know-how in the monetisation of the Sultanate's prodigious mineral resources.

The goal, according to officials of the wholly government owned entity, is a key part of its strategy to unleash the potential of the Omani mining and minerals processing sector to ultimately help drive employment generation, economic development and GDP growth.

"Minerals Development Oman will be the catalyst that aims to fuse together Oman's mineral wealth, with the necessary investment and talent, to give strong impetus to economic diversification of the Sultanate," a senior official said. As part of its strategy for supporting the commercialisation of the minerals sector in Oman, MDO aims to join hands with "global strategic partners", as well as competent local players, in establishing subsidiaries for developing the nation's mineral assets.

According to the official, the size of MDO's shareholding in each of these subsidiaries, as well as their respective corporate structures, will be determined by their managements and boards based on the nature of the projects in question, the added value to Oman, and the technical and commercial expertise offered by the respective strategic partner.

Once these subsidiaries are fully developed, MDO will explore a partial or complete exit from these entities, he said. This would be achieved via one or more of the following options: (i) going public via an offering on the Muscat Securities Market (MSM), (ii) making a dual public offering with global financial markets that are interested in minerals (London, India, Singapore, Hong Kong, and so on), or (iii) through the sale of all or part of the shares to international mining companies and investors.

In the upshot, MDO would stand to gain substantial sale values against these developed concessions or mines from international companies, far more than the value paid for the acquisition of licenses from individuals, the official said. Thus, in addition to the financial return on these exit strategies, the Sultanate will ensure that only serious companies will be able to afford such an exit price and hence these companies will be able to work, produce and develop these assets, the official said.

Furthermore, MDO has the option to reinvest earnings from such exits into new locations and minerals.

It can also increase its investments in downstream and manufacturing projects - actions that in turn will sustain MDO's growth and that of the wider mining sector, he noted.

"In the long term, MDO can make sovereign investments outside the Sultanate after having gained experience and confidence from its achievements, while also having suitably equipped itself with the right staff, expertise and resources," the official added.

Sixty per cent of the equity in MDO is owned by four government entities: the State General Reserve Fund (SGRF), Oman Investment Fund (OIF), Oman Oil Company (OOC) and Oman National Investments Development Company (TANMIA). The remaining 40 per cent will be offered for public subscription via an Initial Public Offering (IPO) proposed to be floated on the MSM before the end of this year.

Source: Oman Daily Observer, 22 June 2016

Oman emerging as key base for world's first seafloor mining

Muscat:Last month's signing of a landmark agreement between an Australian-Canadian mining firm and a prominent Omani engineering services provider effectively positions the Sultanate as an emerging support base for investors behind an unprecedented effort to commercially explore the ocean-floor for high-value minerals, say experts. Nautilus Minerals Inc inked a deal with Oman's United Engineering Services, a wholly owned subsidiary of MB Holding Group, to wet-test an array of gigantic robotic machinery that are proposed to be deployed on the seafloor to mine for ores rich in high grade copper, gold, zinc and silver in the Southwest Pacific.

Weighing several hundred tonnes and designed and assembled specifically for this first ever seafloor mining operation, the machinery - dubbed Seafloor Production Tools (SBT) - will be tested by United Engineering Services in Oman pending their deployment to an offshore location in the Pacific. United Engineering last week signed a deal for the lease of a plot of land falling within Duqm Port's remit as a base for the wet-testing and storage of this multi-million dollar machinery.

Experts see the latest deals as boosting the In-Country-Value (ICV) of a path-breaking venture that is essentially set to take place half-way around the world. They also underscore the Sultanate's notable role in the overall project as investors and service providers.

Oman's MB Holding Group is the largest shareholder in Nautilus Minerals with a 28.14 per cent stake. Also among the company's shareholders are leading global resource companies Metalloinvest Holding (Cyprus) Limited (20.89 per cent) and Anglo American plc (5.99 per cent). Canada-registered Nautilus is currently focused on copper and gold-rich seafloor massive sulphide discoveries in the Southwest Pacific where it holds a package of prospective exploration tenements (granted and under application). Presently in hand for development is Solwara 1, a copper-gold project, in the territorial waters of Papua New Guinea.

According to company officials, seafloor production equipment specially fabricated for the Solwara-1 project is currently en route to Duqm Port for wet-testing and storage. Comprising a trio of remote-controlled vehicles - reputedly the first of their kind in the world - each is around 50 feet long and weighs around 300 tonnes apiece approximately.

Deployed on the ocean floor of the Bismarck Sea, each of the three mammoth machines is designed to perform a specific task. Nautilus explained: "The Auxiliary Cutter is designed as the pioneering machine which prepares the rugged sea bed for the more powerful Bulk Cutter.

These two machines gather the excavated material; the third vehicle, the Collecting Machine will collect the cut material by drawing it in as seawater slurry with internal pumps and pushing it through a flexible pipe to the subsea pump and on to a Production Support Vessel (PSV) via a riser system. Following dewatering of the material on the vessel, a state of the art cargo handling system will be used to load the dewatered material into four storage holds. It will then recover the material from the storage holds and transfer it directly to a handymax vessel for shipment of the material to China."

Welcoming MB Holding Group's role in the venture, Nautilus Minerals' CEO Mike Johnston said: "We appreciate the ongoing support from our largest shareholder, MB Holding Company, who is assisting us with the wet testing and provision of storage facilities in Oman. We look forward to the next phase of development to wet test our equipment as we work towards commencing our seafloor operations in Q1 2018."

Wet-testing of the seafloor production tools is expected to commence at United Engineering's new facilities at Duqm Port during the second quarter of this year.

Source: Oman Daily Observer, 13 February 2016

Oman's copper-gold venture revenues projected at $430m

Muscat: An ambitious copper-gold mining project currently under development in Dakhiliyah Governorate has the potential to generate revenues in excess of $430 million over the first 10 years of operations, according to its joint Omani-Australian promoters.

The Al Hadeetha Copper-Gold Project is being developed by Al Hadeetha Resources LLC, a locally incorporated company that is 70 per cent owned by Alara Oman Operations Pty Ltd (a wholly owned subsidiary of Australian based international mineral exploration company Alara Resources) and Al Hadeetha Investments LLC of the Sultanate.

The venture aims to commercialise the potentially prodigious mineral potential - copper deposits with associated gold ore - of three exploration licenses: Washihi, Mullaq and Al Ajal, which cover a total area of around 105 sq kilometres roughly a two-hour drive from Muscat. JORC resources in the Washihi licence alone are estimated at 14 million tonnes based on the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC), according to the company.

Citing the findings of a feasibility study that was completed recently, Al Hadeetha Resources said the copper-gold project is expected to yield healthy financial returns on base case assumptions. Revenues are projected at over $430 million over 10 years, with Earnings before interest, taxes, and amortization (EBITA) estimated at around $141 million over the same timeframe. Project IRR was envisaged at an impressive 21 per cent. In parallel, the company is exploring a number of project financing options, including a rights issue. The findings of the feasibility study, it said, have sparked renewed interest in the project from certain interested parties.

Furthermore, in anticipation of the eventual commencement of operations, a concrete timeframe for which has yet to be disclosed, top officials of Al Hadeeetha hosted a community meeting and luncheon with stakeholders representing local communities in which the mining licenses are located. Also present were officials representing the Public Authority for Mining (PAM), Ministry of Environment and Climate Affairs, Ministry of Regional Municipalities and Water Resources, and offices of the local walis.

Besides updating the gathering on the findings of the feasibility study, project officials also outlined the latest milestones in the development of the venture, as well as fielded questions pertaining to potential impacts to the local communities once mining operations get underway. Boding well for the success of the project is a number of initiatives and developments that promise to impart strong impetus to the growth of mining and mineral processing activities in north Oman. Noteworthy are plans announced in March for the establishment of the Sohar Dry Bulk Logistics Corridor, designed to facilitate the export of mineral products to international markets at competitive rates.

Earlier, the State General Reserve Fund (SGRF), the largest sovereign wealth fund of the Sultanate, announced the creation of ‘Mining Development Oman' (MDO) in partnership with three other state entities. MDO, set up with a capital of RO 100 million, will invest in local mining projects in collaboration with local and international investors.

"The Company recognises the significance of these developments, among other positive steps being taken, as evidence of the Omani government's commitment to the development of the Sultanate's mining industry," it further added.

Source: Oman Daily Observer, 14 May 2016

Oman mining venture to start work by year-end

Muscat: The company plans to invest an additional $50 million in commercial mining and it will take a year to start commercial production

Al Hadeetha Resources, a 70:30 joint venture between the Australia-based Alara Resources and Al Hadeetha Investment Services, plans to start commercial development/construction at its copper and gold mine project in Washihi, which is located about 160 kilometres south-east of Muscat, by the end of this year.

However, this will be subject to the company getting a mining licence from the Public Authority for Mining.

The company also plans to invest an additional $50 million in commercial mining and it will take a year to start commercial production, Justin Richard, chief executive officer of Alara Resources, told the Times of Oman. He said the company has found additional mineralisation (ore deposits), which is in addition to the already declared resources of 14.1 million tonnes in Washihi.

"This is the largest single JORC (The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Re- serves) copper deposit in Oman," he said, adding, "Such a large volume will help the company build a copper concentrator there."

Al Hadeetha Resources has invested over $9 million in the development of this project so far and is looking forward to commencing the mine's construction.

Richard also noted that the entire process - mining, concentrating and smelting - can be carried out within the country, which will help retain the entire production process in Oman.

According to an earlier report, the feasibility study found that the project will generate $434 million in revenue over a period of 10 years. Further, exploration targets have been identified, which could double the mining inventory for the project.

Al Hadeetha Resources is committed to the responsible development of these assets and sees great growth potential within the mining sector as Oman continues to implement its strategy of a building a more diversified economy.

Source: Times of Oman, 15 June 2016

Oman's move to tap mining sector hailed

Muscat: Just as the Sultanate of Oman is in the final stages of having an exclusive charter to govern the mining sector, an US geologist and professor in geology has said that the country stands to gain enormously if it taps the mining sector and that a big exploration programme may exploit Oman's huge deposits of copper and chromium. Depending on the prices in the international market, these two metals will be a clear indicator of Oman's growth in the years to come, he said.

"I think there is an amazing scope for copper and chromium here in Oman and a big exploration programme may prove Oman to have huge deposits depending on the prices of these two natural deposits", Christopher M Bailey, Professor of Geology at The College of William and Mary, who was in Oman leading a 15-member student group last week, told the Observer in an exclusive interview.

He further said that in order to ensure that these minerals are explored and marketed properly, they need a long-term vision and that the system prevailing in the country is a clear proof that the nation has a long-term vision as far as minerals are concerned.

"I think the country has a long-term view as far as these natural deposits are concerned and with this, the nation can tap the benefits of its natural deposits in the long run". According to him, the present situation in which oil prices have fallen drastically, the Sultanate wouldn't have to feel the pinch. With remedial measures taken in time, the country would soon overcome the same.

"As far as oil and natural gas is concerned, Oman is going to have a very steady course ahead. With calculated steps, this nation needs to have a diversified focus such as mining and other fields which will give it a steady income. I know that they are finding newer avenues for differentiating the income sources and it will not have to feel the pinch in the near future even if the oil prices go further down".

Oman's mining sector is envisaged as one of the five key drivers towards GDP during the 9th Five Year Plan as the country is divesting its income sources from oil to other sectors including industry and tourism. Oman is taking major strides in mining identifying it as a sector with high potential as it can also complement the logistics as well as downstream industry sectors. The recent statistics show that this sector has been growing leaps and bounds and the present rate of growth is 20 per cent over last year, however, smaller its contribution to the GDP is.

To this effect, an MoU (Memorandum of Understanding) to form a company with RO100 million paid-up capital was signed by State General Reserve Fund (SGRF), Oman Investment Fund (OIF), Oman Oil Company (OOC) and Oman National Investments Development Company (TANMIA) at the CMA (Capital Market Authority) recently.

"The market for minerals around the world is big and there has been a growing demand for minerals and we expect a steady demand for the same. This company will not only drive the mineral sector of Oman but there are two other sectors that will identify key areas for the 9th five year plan - logistics and downstream sector".

Source: Oman Daily Observer, 17 January 2016

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