01 June 2015
MUSCAT: The Public Authority for Mining in Oman has decided to increase royalty rates from 5 per cent to 10 per cent. The new rates will come into effect from July 1, 2015 in accordance with a decision taken earlier. Established by a Royal Decree last year with financial and administrative autonomy, the Authority is affiliated to the Ministry of Commerce and Industry.

The Authority has asked establishments and companies operating in the mining sector in Oman "to settle all financial arrears relating to revenue submission before the rate rise decision comes into force on July 1".
It may be recalled that royalty payable to the government under the Mining Law was reduced from 10 per cent to 5 per cent in 2010.

Considered as a separate entity, the Authority has wide ranging functions to regulate the country's mining sector, which is attracting increasing interest from both foreign and local operators.

Contribution of Oman's mining and quarrying activities to the GDP in 2013 reached RO 107.7 million, growing faster than the economy at a compound annual growth rate of 23 per cent over a decade. According to BMI Research, Oman is in for a boom in the mining and metals sectors over the years.

"Investment is set to gather momentum particularly in the copper mining sector and the aluminium metals sector. As Oman's government seeks to diversify the economy away from dependence on oil revenue, we expect mining and metals investment opportunities to abound", BMI says in its research report.

In recent times, Oman has attracted considerable investment from Canada, India and other Gulf countries for mining and quarrying projects.

The decision taken by London-based Savannah Resources to buy Canadian company Gentor Resources' assets in Oman is indicative of the promising growth prospects for mining in the country, the report points out.

In April 2014, Savannah announced its $6.3 million investment to fund expansion into Oman's highly prospective copper belt.

Oman's 700 km long and nearly 150 km wide mountains contain the best exposed Ophiolite suite of rocks.
Oman boasts sizeable mineral reserves of copper, gold, silver, chromite, lead, nickel, maganese and zinc.
Oman Oil Company last year announced its first mining venture in Oman with Mawarid Mining and Oman Mining Company to develop the Yanqul Copper Project.

The project is located in Al Dhahira governorate, 50km north of Ibri.

Mawarid is currently operating in the copper sector, with the open pit Shinas mine in production and the Safwa and Mandoos mines under development. Oman Mining refines up to 16 kt of copper ore produced in the country. The remainder is exported in its raw state.

Oman Oil Company's investment will be for an equity stake of 41 per cent upon the completion of a definitive feasibility study, with 49 per cent for Mawarid Mining and the remaining equity belonging to Oman Mining Company.

Mawarid Mining is a wholly-owned subsidiary of MB Holding Company, which is the first private sector mining company to engage in the exploration and development of copper and gold in Oman.

"In the refined metals sector, aluminium production has taken off in recent years and we expect this trend to gather momentum in line with government efforts to boost aluminium production in other GCC states", the BMI report says.

Sohar Aluminium has the world's longest single potline (smelting cell) at 1.2km long and is the first smelter in the world to implement Rio Tinto Alcan's benchmark AP36 smelting technology, which is the most energy efficient and productive smelting technology commercially available.

© Oman Daily Observer 2015