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Oman’s mining ambitions take a leap forward

10 December 2024

 

While Oman is at a disadvantage in terms of hydrocarbon reserves compared to its Gulf neighbours, when it comes to mineral resources, the sultanate, with its considerably large geographical area, enjoys benefits that its Gulf peers – barring Saudi Arabia – do not.

Exploration for mineral resources and mining activities for metals production are fundamental pillars of Oman Vision 2040 – a socio-economic strategy designed to diversify the sultanate’s economy away from oil and gas revenues and harness the potential of non-hydrocarbon industrial sectors.

At the forefront of this ambition is Minerals Development Oman (MDO), which was created in 2017 to explore the country’s mineral resources base and develop the mining sector.

Minerals exploration and production

MDO, a subsidiary of Oman Investment Authority, continues to advance its exploration campaigns across a range of minerals, including copper, chromite, gypsum, limestone, dolomite and silica.

The company had a major success recently when its subsidiary, Mazoon Mining, broke ground on a copper concentrate production project in Yanqul in northwestern Oman.

The Mazoon copper project site, located in the wilayat of Yanqul in Al-Dhahirah Governorate, covers 20 square kilometres (sq km) and comprises five open-pit mines. It is estimated to hold copper ore reserves of 22.9 million tonnes.

The project includes the construction of a processing plant spanning 56,000 square metres, with the capacity to process 2.5 million tonnes a year (t/y) of copper ore.

The Mazoon copper project will have the capacity to produce 115,000 t/y of copper concentrate, at a 21.5% copper grade, making it the largest copper concentrate production project in the sultanate.

Mazoon Mining was granted exclusive rights by Oman’s Energy & Minerals Ministry in 2022 to explore, develop and produce copper concentrates in concession area 12-A1, with gold as a secondary by-product.

Following feasibility studies, Australian/Canadian firm Lycopodium was appointed as the engineering, procurement and construction management contractor for the Yanqul project.

Construction of the processing plant is planned to begin in the first quarter of 2025, and production of copper concentrate is set to commence in the first quarter of 2027.

In addition to the Mazoon copper project, MDO has also initiated the redevelopment of copper mines in Sohar and Liwa, aiming to produce 800,000 t/y of copper ore annually, with confirmed reserves of 2.78 million t/y of copper ore.

In October, the Omani Ministry of Energy & Minerals awarded MDO a concession agreement to explore and develop silica resources in Block 51F in the wilayat of Mahout in Al-Wusta Governorate. The block covers 2,156 sq km and is estimated to hold silica, limestone and dolomite deposits.

Steel production investments

Several other metal production projects in Oman, particularly steel schemes, have also made progress in recent months.

In late October, Brazilian mining major Vale and China’s Jinnan Iron & Steel Group entered a joint venture (JV) to establish an iron ore concentration plant in Oman’s northern city of Sohar.

The Brazilian-Chinese JV intends to invest more than $600m in the iron ore concentration plant project, which will be the first such facility in Oman.

Vale will invest $227m to connect the plant to its agglomerate facilities in the region, while Jinnan will invest about $400m to build, own and operate the plant.

The planned complex, to be located within Sohar Port and Freezone, is scheduled to start operations by mid-2027.

The plant will be able to process 18 million t/y of iron ore and produce 12.6 million t/y of high-grade concentrate.

The proposed iron ore concentration plant project in Sohar is understood to be the second-biggest foreign investment in Oman’s steel industry. As such, it will contribute to the sultanate becoming a key player in the global supply chain for direct reduction grade iron ore (DRI).

Vulcan Green Steel (VGS), the steel arm of Vulcan Green, which is owned by India’s Jindal Steel Group, is developing the largest green steel project in Oman. VGS broke ground on the estimated $3bn project in December 2023.

The planned facility, which covers 2 sq km in the Special Economic Zone at Duqm (Sezad), will have two 2.5 million t/y production lines, comprising DRI units, an electric arc furnace and a hot strip mill. 

The planned facility, set for completion by 2026, will primarily use green hydrogen to produce 5 million t/y of green steel. Once commissioned, it will be the world’s largest renewable energy-based green steel manufacturing complex.

Sezad could also host another large-scale green steel project if Japanese steel manufacturer Kobe Steel and Tokyo-based Mitsui & Company can reach the final investment decision on a preliminary agreement they signed in April 2023 to develop a low-carbon iron metallics project.

The two Japanese firms agreed to conduct a detailed business study in line with the goal of commencing low-carbon dioxide iron metallics production by 2027. The project is expected to produce 5 million t/y of DRI using a process called Midrex, where DRI is produced from iron ores through a natural gas or hydrogen-based shaft furnace.

Polysilicon production

Oman is also set to become a key regional producer of polysilicon once private player United Solar Polysilicon completes the construction of its estimated $1.35bn production facility in Sohar Port and Freezone in 2025. 

The polysilicon plant will have the capacity to produce 100,000 t/y of high-quality metallurgical silicon. United Solar Polysilicon broke ground on the factory, which will be spread across 160,000 square metres, in March this year.

United Solar Polysilicon made further progress with the project in July when it awarded a contract to provide water services to Sohar-based Majis Industrial Services, a subsidiary of Omani state energy conglomerate OQ Group. 

Polysilicon is a high-purity form of silicon, which is a key raw material in producing solar photovoltaic panels. Polysilicon production involves pouring the liquid metallurgical silicon from the furnace into moulds and then cooling it through mould or continuous casting. After cooling, the metallurgical silicon is ground and packaged for global export.

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Indrajit Sen

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