08 November 2006
With the re-birth of copper mining in Oman, on the back of high international prices for the mineral, the mining industry is witnessing a boom in activity.
Maqbool Ali Sultan, the minister of commerce and industry, told the local press that after 12 years of inactivity, copper mining in Oman was starting again in view of the high international price of copper.
During the 1990s, global copper production stagnated as inventories were full and mines were closed. Copper commodities were cheap and readily available. This trend reversed in late 2001 when world copper prices began increasing and have since experienced continuous growth. This has mostly been attributed to the spectacular growth of the economies of China and India.
Three companies are involved in copper ore production in the sultanate. The state owned Oman Mining Company (OMCO), the National Mining Company (NMC) founded in 1995 and the newly formed Al-Zahra Mining Company.
The NMC announced a plan to invest roughly $50m in developing its Ghuzayn concession in north-eastern Oman. This will include the cost of building a new copper concentrator which will convert raw ore to a marketable product.
NMC, a subsidiary of MB Holding Company, commenced mining operations in August. Speaking to the local press, Frank Schlosser, CEO of NMC, said the launch of their activity near Shinas was the start of a new era in private led mining in the sultanate.
The NMC concession is estimated to hold 2.5m tonnes of copper ore containing 2.5% of copper. These figures are not final and more drilling is being undertaken. Schlosser said that the extra drilling indicates that the reserves could hold 25% more. The company has also discovered commercially recoverable amounts of gold and silver.
As construction proceeds on the new concentrator, the company will transfer the ore to a concentrator acquired by NMC from the state-owned Oman Mining Company (OMCO), one that had been out of operation for the last 12 years. NMC will be putting up sizeable investment to bring the concentrator back in line with operational standards, and plans to fire it up later on this month.
Both NMC and ONMC hope to extract around one million tonnes of copper ore per year, according to the local press. Al- Zahara Company has been granted a concession but is still in process of evaluating reserves.
NMC aims for an output level of 22,000 tonnes per annum (tpa) of copper and 8000 ounces of gold.
Industry analysts foresee a large growth in investment in the coming years. NMC announced that it was keen on exploring in other parts of the country. Schlosser said that there is a lot of potential for prospecting in the country and that they intend to commit more investment.
Developing the mining sector should not only lure foreign investment, but also provide new jobs. NMC has already announced that it will be hiring 300 workers to handle the different activities associated with copper mining in Ghuzayn.
The mining and quarrying sector will also undoubtedly demand more expatriates. The number of expatriate employees in the sector has risen by 17.5% between December 2005 and August of this year, according to the latest statistics from the ministry of national economy, placing it among the fastest growing sectors in terms of employment. The total at the end of August was 8880 expatriate workers.
This year, mineral products began to play an important role in foreign trade. There was a 50.3% year on year increase in trade in mineral products through the end of May, when total exports totalled OR29.3m, taking the second place among the country's non-petrochemical exports, according to figures released by the ministry of national economy.
The sultanate also has 26 companies operating 40 quarries in the non-metallic sector, which includes a variety of minerals such as limestone and gypsum.
Other mineral projects this year include the joint venture between Oman Oil and Austrian Rauch Ft in setting up a magnesium metal production facility in the Rusayl Industrial Estate with initial production of 10,000 tpa, which will be increased to 30,000 tpa, according to local press. The government has also recently issued three new cement licenses.
The government is participating in stimulating the sector by giving tax incentives to private companies.
Mining industries receive an income tax exemption for the initial five years of the project with a possible extension. Companies are also exempt from custom duties on the import of equipment and spare parts.
With the re-birth of copper mining in Oman, on the back of high international prices for the mineral, the mining industry is witnessing a boom in activity.
Maqbool Ali Sultan, the minister of commerce and industry, told the local press that after 12 years of inactivity, copper mining in Oman was starting again in view of the high international price of copper.
During the 1990s, global copper production stagnated as inventories were full and mines were closed. Copper commodities were cheap and readily available. This trend reversed in late 2001 when world copper prices began increasing and have since experienced continuous growth. This has mostly been attributed to the spectacular growth of the economies of China and India.
Three companies are involved in copper ore production in the sultanate. The state owned Oman Mining Company (OMCO), the National Mining Company (NMC) founded in 1995 and the newly formed Al-Zahra Mining Company.
The NMC announced a plan to invest roughly $50m in developing its Ghuzayn concession in north-eastern Oman. This will include the cost of building a new copper concentrator which will convert raw ore to a marketable product.
NMC, a subsidiary of MB Holding Company, commenced mining operations in August. Speaking to the local press, Frank Schlosser, CEO of NMC, said the launch of their activity near Shinas was the start of a new era in private led mining in the sultanate.
The NMC concession is estimated to hold 2.5m tonnes of copper ore containing 2.5% of copper. These figures are not final and more drilling is being undertaken. Schlosser said that the extra drilling indicates that the reserves could hold 25% more. The company has also discovered commercially recoverable amounts of gold and silver.
As construction proceeds on the new concentrator, the company will transfer the ore to a concentrator acquired by NMC from the state-owned Oman Mining Company (OMCO), one that had been out of operation for the last 12 years. NMC will be putting up sizeable investment to bring the concentrator back in line with operational standards, and plans to fire it up later on this month.
Both NMC and ONMC hope to extract around one million tonnes of copper ore per year, according to the local press. Al- Zahara Company has been granted a concession but is still in process of evaluating reserves.
NMC aims for an output level of 22,000 tonnes per annum (tpa) of copper and 8000 ounces of gold.
Industry analysts foresee a large growth in investment in the coming years. NMC announced that it was keen on exploring in other parts of the country. Schlosser said that there is a lot of potential for prospecting in the country and that they intend to commit more investment.
Developing the mining sector should not only lure foreign investment, but also provide new jobs. NMC has already announced that it will be hiring 300 workers to handle the different activities associated with copper mining in Ghuzayn.
The mining and quarrying sector will also undoubtedly demand more expatriates. The number of expatriate employees in the sector has risen by 17.5% between December 2005 and August of this year, according to the latest statistics from the ministry of national economy, placing it among the fastest growing sectors in terms of employment. The total at the end of August was 8880 expatriate workers.
This year, mineral products began to play an important role in foreign trade. There was a 50.3% year on year increase in trade in mineral products through the end of May, when total exports totalled OR29.3m, taking the second place among the country's non-petrochemical exports, according to figures released by the ministry of national economy.
The sultanate also has 26 companies operating 40 quarries in the non-metallic sector, which includes a variety of minerals such as limestone and gypsum.
Other mineral projects this year include the joint venture between Oman Oil and Austrian Rauch Ft in setting up a magnesium metal production facility in the Rusayl Industrial Estate with initial production of 10,000 tpa, which will be increased to 30,000 tpa, according to local press. The government has also recently issued three new cement licenses.
The government is participating in stimulating the sector by giving tax incentives to private companies.
Mining industries receive an income tax exemption for the initial five years of the project with a possible extension. Companies are also exempt from custom duties on the import of equipment and spare parts.
© Oxford Business Group 2006
