Sector monetisation: 40pc of MDO's equity to be offered for public subscription via an IPO before the end of this year
Muscat - Minerals Development Oman (MDO), a new holding company set up earlier this year with a share capital of RO 100 million, has plans to invest in, among other things, large-scale commercial mining and downstream processing schemes, as well as transport and logistics infrastructure to underpin the growth of this promising sector.
According to a key official of the public sector entity, MDO will serve as the executive arm of the Public Authority for Mining (PAM), set up in 2014 as the regulator and policy-maker for Oman's mining and minerals industry.
Eng Ibrahim al Amri, Project Manager, said MDO will complement PAM in driving the growth of the minerals industry through investments and activities designed to create employment opportunities and enhance the sector's contribution to the Gross Domestic Product (GDP), albeit in a commercially-driven manner.
"MDO will perform an operational role in the advancement of the sector and will invest in a number of mining companies and manage them under one umbrella, particularly as development of this sector cannot be done by multiple and scattered groups of companies without proper coordination and commercial control of the sector," he noted.
Sixty per cent of the equity in MDO is owned by four government entities: the State General Reserve Fund (SGRF), Oman Investment Fund (OIF), Oman Oil Company (OOC) and Oman National Investments Development Company (TANMIA).
The balance 40 per cent will be offered for public subscription via an Initial Public Offering (IPO) proposed to be floated on the Muscat Securities Market (MSM) before the end of this year, said Al Amri.
In addition to driving the monetisation of Oman's mineral resources, MDO's wider mission is to support the transfer of know-how, develop local capabilities, build logistics infrastructure, and generally raise industry standards to international levels, the Project Manager said.
Among the many options being weighed by MDO in achieving its strategy are plans to acquire new concession areas or existing companies, explore assets for potential commercialisation, and invest in infrastructure and logistics to accelerate the development of productive mineral sites.
It aims to set up subsidiary companies that are either wholly owned or in joint venture with specialist firms to provide services such as logistics, transportation, energy services, industry-related import and export services, and so on.
These subsidiaries will provide services to MDO owned companies or those independently operated in the Sultanate on a commercial basis.
Also envisioned is a plan to set up a centralised unit for the marketing of mineral commodities produced by local companies, said Al Amri.
The move, he explained, will help local firms save on their individual marketing costs, while also safeguarding their interests from potential monopoly traders operating in the market.
A key objective of MDO is to support value addition through investments in downstream units.
The goal, according to Al Amri, is to support the production of commercially valuable commodities or even intermediate commodities for use as feedstock by local manufacturers. Such initiatives will be pursued in joint venture with specialist partners, he added.
© Oman Daily Observer 2016
