Riyadh, Saudi Arabia: The Ministry of Industry and Mineral Resources of Saudi Arabia recently announced that 31 local and international companies have qualified to bid for exploration licenses in three major mining zones, including Shandong Gold Group Co., Ltd., a state-owned enterprise in Shandong Province, China, and China Geological Mining Corporation, a central enterprise. The total area of the opened mining belt exceeds 24000 square kilometers, marking an important measure for Saudi Arabia to promote mineral resource development and achieve economic diversification.

Overview of Mining Openness and Bidding

This bidding involves three major mineral belts located in Riyadh and Medina provinces of Saudi Arabia: Nuqrah Belt, Sukhaybarat As Safra Belt, and Ad Duwayhi Nabitah Belt. According to Saudi financial media Argaam, these regions are rich in important mineral resources such as gold, copper, silver, zinc, and nickel. The bidding process will start in January 2025, and the final results will be announced in September. This is an important component of Saudi Arabia's 2025 mining development plan, with the goal of driving economic transformation by developing undeveloped mineral resources worth approximately $1.3 trillion.

Chinese enterprises actively layout

Among the eight consortiums qualified for bidding, Chinese companies have performed outstandingly. Shandong Gold Group International Mining Development Co., Ltd. and Saudi local enterprise Ajlan&Bros Mining Company formed a consortium to participate in the bidding. Meanwhile, Helderberg Ltd., a subsidiary of China Geological Mining Corporation in Saudi Arabia, was also successfully shortlisted.

Shandong Gold Group is the second largest gold production enterprise in China, and its listed company Shandong Gold Mining Co., Ltd. (stock code: 600547. SH) has significant influence in the global mining industry. According to Bloomberg data, the group's operating revenue will reach $11.5 billion in 2024, with operations covering multiple countries and regions such as Argentina and Ghana. As a central enterprise, China National Geology and Mining Corporation has accumulated rich exploration and development experience in such projects as Jiama Copper Gold Mine in Xizang Autonomous Region and Changshanhao Gold Mine in Inner Mongolia Autonomous Region.

Strategic cooperation significance

This bidding is an important practice of Saudi Arabia's 2030 vision, aimed at reducing dependence on the oil economy and building a global key mineral center. The Arab Chinese Industrial Research Institute (ACIEP) pointed out that the deep participation of Chinese enterprises in Saudi Arabia's mining market will not only help to improve the local industrial chain, but also promote the docking of the the Belt and Road Initiative and Saudi Arabia's economic development strategy.

Saudi Arabia's sovereign wealth fund has been making frequent moves in the global mining industry recently, such as acquiring a 10% stake in Vale SA's nickel copper business for $2.6 billion in 2023. The technological advantages and financial strength of Chinese enterprises will provide important support for the development of mineral resources in Saudi Arabia.

Competitive advantages and challenges

The successful development experience of Shandong Gold Group in the Zhaoyuan Laizhou gold belt in Shandong Province has provided technical support for its participation in international bidding. The group has successively completed the acquisitions of the Belladero gold mine in Argentina and Cardinal Resources Limited in Ghana, demonstrating strong international operational capabilities. The experience of China Geological Mining Corporation in projects such as the Kulu Tegerek copper gold mine in Kyrgyzstan and the Soremi copper mine in the Republic of Congo has also laid the foundation for its participation in projects in Saudi Arabia.

However, international competition and geopolitical factors still pose challenges. In 2020, the acquisition of Canadian TMAC Resources by Shandong Gold Group was blocked due to a national security review, reminding Chinese companies to strengthen risk management.

Industry Outlook

With the increasing global demand for key mineral resources, Saudi Arabia expects its annual copper demand to grow to 730000 tons by 2035. The layout of Chinese enterprises in the field of new energy, such as the solar glass factory built by Qibin Group in the the Arab Republic of Egypt, shows a strategic vision in the coordinated development of mining and clean energy.

This bidding is not only an important opportunity for Chinese companies to expand into the Middle East market, but also a reflection of the deepening of economic and trade cooperation between China and Saudi Arabia. In the future, Chinese enterprises need to continuously enhance their technological innovation capabilities and localized operational levels to cope with international competition and achieve sustainable development. (This article is from the official website of Jian Dao www.seetao.com. Reproduction without permission is prohibited, otherwise it will be prosecuted. Please indicate Jian Dao website+original link when reprinting.) Jian Dao website new energy column editor/Yang Beihua