Digging deep

H E Maqbool Ali Sultan, Minister of Commerce and Industry, talks to BusinessToday about the efforts to improve the contribution of mining to the economy


What are the developments taking place in the mining sector?
Currently developments are taking place both in the metallic and non-metallic sectors. These developments are mainly triggered by the high metal prices as well as construction and industrial growth being seen in Gulf and Asian countries, partly fuelled by the high oil prices. National Mining is developing the Shinas gold and copper deposits, while Ghuzayn is being evaluated for development. Oman Mining is developing the Bishara gold and copper deposit and many new chromite mines have been opened up. Omani limestone is in tremendous demand from the Indian steel industry. Two new big mines are coming up in south Oman to cater to India's steel industry needs. These include Al Majan Mining, a joint venture comprising Eastern Energy from Thailand, Alpha Minerals from India and Al Ahqaf International from Oman and Al Rimal Mining, a company formed by India's Tata Group and Al Bahja Group from Oman. Besides, many quarries are coming up for dolomite, clay, marble, silica sand, and construction-material production like aggregates.

What incentives are being offered to encourage private sector investment?
The Directorate General of Minerals, Ministry of Commerce and Industry, is building a huge geological infrastructure in the form of a geological database which can be used by the investors. The DGM also conducts pre-feasibility and feasibility studies of rocks and minerals which have the potential for exploitation and development. These data and studies are available to investors.
What developments are taking place at Oman Chromite and Oman Mining?
The state-owned Oman Chromite is involved in mining chromite and exporting it. They are currently producing about 30,000 tonne per annum of both metallurgical and refractory grade chromite. They signed a contract worth more than US$2.5mn in 2007 to supply chromite to various consumers. They have also invested with two other companies to extract other minerals such as gabbro to produce aggregate. Oman Chromite has modernised its equipment to develop its capabilities in meeting the increased demand for metallurgical and refractory ore. Oman Mining is involved in developing Bishara gold and copper mine and has also applied for an exploration licence for copper and gold in Al Dhahira. They have also diversified into mining limestone.
Can you share your views on the progress and contribution made by private players like National Mining Company and Al-Zahra Mining?
As briefed by National Mining Company, we understand that they are going to invest about US$600mn over the next four years to exploit copper and gold from their Shinas and Hatta deposits, work on which started in 2007. The copper ore here is about 4mn tonnes with a grade of four per cent copper. They have also been granted a licence to explore further and subsequently exploit Ghuzayn copper deposit. The copper grade here varies between 1-2 per cent. Al- Zahra Mining is conducting exploration work and their first report is expected soon. Subsequent steps will be taken by them based on the recommendation in their report. A third company named Pilatus Resources Oman has been granted a licence to explore and exploit copper and gold in Washihi area as well as at Al Ajal prospect.

What is the outlay for the sector in the Seventh Five-Year Plan?
The main work related to geology, minerals and mining in the Seventh Five-Year plan is to build a GIS database, a world-class minerals laboratory for the benefit of both public and private enterprises, an aggressive minerals exploration programme and develop the existing minerals deposits.
What is the sector's contribution to the GDP and employment generation?
The royalty collected in 2006 was RO3.3mn on the total value of the material which was RO65.974mn. This showed an increase of almost 100 per cent over the 2005 mineral production. This mineral-production value does not include value addition. There is a tremendous demand for minerals, particularly in the construction industry.
Over the next few years the sector is expected to witness rapid development. Most of the mining companies are required to meet the 35 per cent Omanisation target set by the Ministry of Labour, which has been met easily.
What is the progress on the three licences that have been issued to set up cement plants?
From our side there is no time limit. The companies are currently involved in characterising the raw material and conducting feasibility studies. Currently power is a constraint for industrial development. But it is being addressed and an alternative source of energy is being evaluated for consideration to overcome this constraint.
Apart from copper and limestone deposits, are there any other ore reserves that can be developed?
Yes, there are many industrial rocks and minerals which are available in commercial quantities for exploitation. These are dolomite, marble, various clays, silica sand, quartzite and low grade iron ore. If the private sector finds the market for these then they can exploit them. Oman has coal deposits as well. Studies are in progress for its utilisation.
Do all the mining projects conform to internationally accepted environment standards in terms of mining activity and disposal of waste?
Yes of course. Sultanate of Oman is very environmentally conscious. Strict rules and regulations have been designed and are being implemented by the authorities concerned to see that proper mining of minerals take place according to international standards.
Can you share some data in terms of revenue generated from exports, quantity of various minerals mined and exported and used internally?
The sultanate is mining and processing the following rocks and minerals: building materials, chromite, shale/clay, gypsum, gold, silver, low grade iron ore (laterite), limestone, marble, salt and quartzite. Mining and processing of building materials group exceeds in value and tonnage compared to all the other rocks and minerals being produced. Sixty per cent of building materials is expor-ted. Similarly, 100 per cent of chromite, gold, and silver mined and processed are expor-ted, whereas 70 per cent of marble mined and processed is exported. Forty-three per cent of laterite, 21 per cent of gypsum and ten per cent of limestone are also exported. In the coming years, limestone production and export are expected to go up considerably. Production and revenue generated in mining and processing of rocks and minerals in 2006 have shown significant increase as compared to 2005.
Which areas have potential to be developed further? Are there any plans to issue new mining exploration licences?
There are two groups of minerals which require different exploration approach. One is the metallic minerals group and the other is the non-metallic group. The exploration approach to these two groups is totally different. Our mountains, which are about 700km long and nearly 150km wide, contain the best exposed ophiolite suite of rocks. These rocks are favourable for copper, gold, silver, chromite, lead and zinc.
The ministry has prepared many concession blocks for investors to come and explore minerals. Metallic minerals exploration, however, is complex. It requires application of many exploration methods, drilling many holes and hence requires substantial capital as well. In addition to ophiolite, rocks belonging to pre-late permian sedimentary basement and late permian to late cretaceous Arabian platform has potential for copper, lead, zinc and iron deposits. These geological settings require further exploration work.
Oman is a country of non-metallic minerals. There are about seven or eight non-metallic minerals which are required in almost every industry. These are limestone, dolomite, various clays, gypsum, silica sand and quartzite, iron oxide, marble and ornamental stones, construction materials etc. All these non-metallic minerals are available in huge quantities.
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Digging deep
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