Meed | Oman’s mining ambitions take a leap forward

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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Yemen’s Houthis have placed Saudi Arabia’s civil aviation infrastructure at the centre of their campaign against the kingdom. Two strikes on King Khalid International airport in Riyadh over the weekend killed 13 people and injured 320.

The deadlier attack hit a passenger terminal on the afternoon of 10 October. The General Authority of Civil Aviation (Gaca) said it killed 12 people, including four Saudi citizens, and injured 309. Airport operations were suspended pending a damage assessment.

A second strike hit Terminal 4 on the afternoon of 11 October, sparking a fire that killed a Pakistani resident and injured 11 others, according to Gaca. The Saudi-led coalition reported intercepting a cruise missile near the airport that afternoon. Gaca also reported an attack on King Fahd International airport in Dammam that evening, following a coalition report of a projectile falling near the facility the previous night.

The weekend strikes followed attacks on Abha International airport on 6 October and on King Khalid International airport on 7 and 8 October, the last of which included a strike on a Saudia aircraft. Gaca figures put the toll from the week’s attacks on Saudi airports at 19 dead and more than 350 injured.

The Houthis said they would continue operations inside the kingdom and that all Saudi airports were potential targets, with the exception of those serving the holy cities. The group says it is acting in response to Riyadh’s support for Yemeni government forces and a Saudi air strike on Sanaa airport. It has also claimed attacks on Saudi oil facilities, which Saudi authorities have not confirmed.

Aviation exposure

The attacks strike a sector central to the kingdom’s diversification plans. King Khalid International airport’s existing terminals are to be absorbed into King Salman International airport (KSIA), a 57-square-kilometre development with six parallel runways targeting a capacity of 120 million passengers by 2030 and 185 million by 2050.

Procurement on KSIA has gathered pace this year. In July, a joint venture of China Civil Engineering Construction Corporation and Dammam-based Mofarreh AlHarbi & Partners won an estimated SR800m ($213m) contract for enabling and substructure works on Terminal 6, which will add capacity for 40 million passengers. Turkish contractor IC Ictas and Saudi Arabia’s Al-Rashid Trading & Contracting recently secured a SR800m ($213m) contract for the airport’s Private Aviation Terminal.

Government-owned Saudi Royal Aviation set 8 October as the bid deadline for an estimated SR3bn ($800m) contract to build an aviation complex within the KSIA masterplan, the same day the Houthis struck King Khalid International airport and a Saudia aircraft.

Airlines have already adjusted. Flydubai cancelled flights to Riyadh and Yanbu up to 10 October and to Abha up to 11 October, and Etihad Airways reported extended delays on its Abu Dhabi to Riyadh service after the airport closed on 8 October. The UK Foreign Office has advised against all travel to areas within 10km of the Yemeni border.

Market reaction

The Saudi stock market’s response has been muted so far. The Tadawul main index fell 15.54 points to close at 10,360.74 on 11 October, the first trading session after the Saturday attack, with turnover of SR2.6bn ($693m). The session closed before the second strike on King Khalid International airport and the attack on Dammam, and Monday’s trading will be the first to reflect the full weekend.

The weekend also brought a separate maritime incident. UK Maritime Trade Operations said an oil tanker was struck by an unidentified projectile in the Strait of Hormuz on 11 October, with its crew reported safe.

Diplomatic response

The coalition described the 10 October attack as a war crime and said it would respond decisively. It said on 10 October that it had destroyed 136 military targets in Houthi-controlled areas and was working to dismantle the group’s ballistic missile network.

Egypt, Pakistan and Turkiye joined Saudi Arabia in an R4 group statement condemning the attacks and supporting measures taken by the kingdom in response. The Arab League also voiced its support for Saudi Arabia. On 11 October, Iran’s foreign minister spoke by telephone with his Saudi counterpart, Prince Faisal Bin Farhan, to discuss the escalation. The US and UK have also signalled the possibility of further support for the kingdom.

The escalation comes against the backdrop of the regional conflict, which has drawn Saudi Arabia into a renewed Yemen front after several years of relative calm following the 2022 ceasefire. The extent of the damage at King Khalid International airport, which Gaca is still assessing, and the speed at which international carriers resume full schedules will determine how far the attacks disrupt the kingdom’s aviation programme.

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The memorandum of understanding (MoU) was signed in Riyadh by Karim Badawi, Egypt’s minister of petroleum and mineral resources, and Abdulaziz Bin Salman, Saudi Arabia’s minister of energy.

Under the agreement, both sides will enhance cooperation in trading, transporting, storing and distributing crude oil, petroleum products and natural gas.

They will also expand cooperation on developing the infrastructure and logistics services that support these activities.

In its statement, Egypt’s Ministry of Petroleum & Mineral Resources said: “These efforts will contribute to improving energy market efficiency, enhancing the resilience and reliability of supply chains, and strengthening energy security.”

The MoU also provides for expanded cooperation in exchanging expertise and best practices in operating and developing fuel stations, as well as in transporting and tracking petroleum products and liquefied petroleum gas cylinders.

Additionally, the agreement seeks to explore investment opportunities in joint projects and promote exports.

The latest agreement comes as Egypt becomes an increasingly important export route for Saudi Arabia.

Due to disruptions and security risks affecting shipments through the Strait of Hormuz, Saudi Arabia has been redirecting crude exports via its East-West Pipeline to Yanbu on the Red Sea.

Meanwhile, the Bab El-Mandeb Strait, at the southern end of the Red Sea, has also become a security concern due to military activity in Yemen. Egypt offers an alternative route through the Sumed pipeline, which runs from Ain Sokhna on the Red Sea to Sidi Kerir on the Mediterranean.

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JGC evacuated its personnel from the site in the southern oil hub of Basra following the start of the regional conflict on 28 February, when the US and Israel attacked Iran.

The evacuation halted work on the project, which was in its final construction stage.

On 14 August 2026, Iraq’s Ministry of Oil announced that it had signed an agreement with JGC to resume work on the fluid catalytic cracking (FCC) project at Basra refinery.

One source said: “Even though the agreement to bring the evacuated workers back was signed about two months ago, there is still no sign of the evacuated workers on the project site.

“It is possible that they will return soon, but it is hard to tell what will happen next in the current security environment.”

Earlier this month, Iraq’s Ministry of Oil said it met with Japanese officials to discuss plans to commission the FCC unit under the Basra refinery upgrade project.

The statement did not say when the evacuated JGC workers would return to the project site.

Strategic project

Iraq’s state-owned South Refineries Company (SRC) sent JGC notice of the main contract award for the FCC package of the Basra refinery upgrade project in August 2020.

JGC was awarded the contract in consortium with South Korea’s Hyundai E&C.

The official contract signing ceremony was held in Baghdad on 1 October 2020.

The contract awarded to JGC, which uses the engineering, procurement, construction and commissioning model, was worth $3.78bn.

The FCC package is part of a broader project to upgrade the Basra refinery.

The project site is located about 12 kilometres east of Iraq’s southern city of Basra.

The wider upgrade project involves installing new facilities on land adjacent to the existing Basra refinery, including a vacuum distillation unit and a diesel desulphurisation unit.

In April 2021, France’s Axens won a contract in Iraq to provide four process technologies to SRC for the Basra refinery upgrade project.

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MEED’s latest report on Iraq includes:

> COMMENT: Iraq’s reform window narrows
> GOVERNMENT: Al-Zaidi takes Iraq’s premiership under US shadow
> BANKING: Financial challenge tests Iraq’s resolve
> ECONOMY: Iraq enters era of resilience, reform and rising risks
> OIL & GAS: Iraqi oil and gas sector in crisis
> POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
> CONSTRUCTION: Momentum builds in Iraq’s post-war construction sector

To see previous issues of MEED Business Review, please click here
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Contractors are preparing to submit prequalification statements on 14 October for a contract to build Jordan’s Al-Hussein Bin Abdullah II International Stadium, located east of the capital, Amman.

The project is part of the first phase of the Amra City development masterplan and is being implemented by Jordan Cities & Facilities Development Company, a Jordan Investment Fund-owned company.

Main works are expected to begin early next year, with the stadium slated for completion in 2029.

The project will cover about 1 million square metres, and the stadium will seat 50,000 spectators.

The stadium is being built within the Amra City development, which is located about 40 kilometres (km) from downtown Amman and 35km from Zarqa and Queen Alia International airport.

MEED reported that preliminary excavation and site preparation began in June.

The project forms part of Jordan’s Economic Modernisation Vision (EMV) 2023-25.

The EMV – Amman’s flagship reform programme – aims to increase real income per capita by an average of 3% annually, create 1 million jobs and more than double the country’s GDP over the next decade.

The strategy envisages a leading role for the private sector, which is expected to account for 73% of the estimated $58.8bn investment required.

READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:

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Abu Dhabi plans Mussafah road upgrades

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Abu Dhabi’s Department of Municipalities and Transport (DMT) has announced plans to upgrade roads in Mussafah, improving links between the industrial area, Mohamed Bin Zayed City and Zayed City.

The scheme covers about 13 kilometres of roads on the E30 and 8th Street. It aims to reduce congestion, improve road safety and cut journey times.

The works include a new three-lane highway in each direction along 8th Street, with parallel three-lane service roads on both sides providing access to local businesses and facilities.

The upgraded corridor is expected to accommodate up to 4,000 vehicles an hour.

Other works include upgrades to four E30 interchanges, improved links to 8th Street and the E20, and modifications to nine junctions.

The DMT also plans to build two bridges connecting Mussafah and Mohamed Bin Zayed City, along with a pedestrian bridge.

Abu Dhabi is planning major investments to upgrade its road network across the emirate.

Last week, it disclosed plans for a major new transport corridor in the capital, comprising a 37km coastal route linking Al-Hudayriyat Island with the E11 at Al-Nouf.

It is planned to have three lanes in each direction and will include a tunnel, about 7km of marine bridges and about 4km of causeways.

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