Thursday, April 24, 2014

MENA Mining (ix): Oman - 1


MENA Mining (ix): Oman - 1

Oman is a country that is strategically located outside the Persian Gulf, and has a very promising geologic structure.  By 2020 the Sultanate of Oman stems to diversify its economy by means of development of new industries, and among these plans substantial attention is focused on mining. Development of industry would require a lot of materials that are produced from extracted natural resources, thus the Government encourages investments in mining.
This beautiful presentationSultanate of Oman by Gentor gives a short historical and present day overview, while a special Gentor’s Website section provides technical geologic data

Commission for the Geological Maps of the Middle East provides detailed description of the geology of Oman with this map:

Here I will look on some crucial points of non-hydrocarbons mining industry. Surprisingly enough such a small country is endowed with good mineral resources due to its exclusive geologic composition - due to the presence of the world’s largest intact and best-exposed obducted Samail ophiolite. Metallic minerals are represented with gold, chromite, copper, nickel, cobalt, vanadium, platinum, palladium, lead, zinc and other precious metals (An interesting presentation can be found here – although it discusses oil and gas, but gives a good understanding of geology:Hydrocarbon Potential of  Middle Eastern Basins of the Gulf. Geology & Geopolitics mix!). However, the potential of mining sector still remains unlocked and the biggest task now is to find out and exploit what resources are the most feasible and can be exploited to their full potential.

During the past 40 years mining industry in the Sultanate experienced spectacular growth. As to the available data (as of May 2010):
·                  Production of minerals and rocks, increased to RO 168.87 million in 2008 as against RO 95.86 million in 2007; 
·                   Number of quarrying and mining operations going on in Oman stood at 150 for fill material, 71 for chromite, 183 (crusher), 57 (marble), three (sandstone), four (each for gypsum, laterite and clay), two (each for copper and limestone for cement and limestone for export), and one (salt and dune sand)
·                  Copper is planned to be mined in Shinas, Liwa, Ghuzayn, Washihi, Al Ajal, Rakah and Hayl As Safil deposits
·                  Four companies are conducting exploration for manganese.
·                  Several companies have received exploration licenses: five for laterite, four for manganese, three for gyspum, two for dolomite, 12 for copper and one each for silica sand/quartzite and limestone.


At this time chrome ores seem to be one of the leading investor attractions for non-hydrocarbons miners.
The world reserves of chromite ores are estimated to be 1.52 billion MT. About 2% of these reserves (30 million MT) are located in the Sultanate of Oman.  Mining was active since early 1980s, but metallurgical grade chromite ores started to be exported only in recent years as response to rising demand from China and general shortages of ferrochrome worldwide. The country has about 450 chrome deposits and currently 71 mining operations are going on. As the result of low production costs, all year operations due to good weather, and excellent infrastructure present,chromite ores from Oman have the lowest production cost as compared to ores from other countries. According to the Ministry of National Economy, output of chromite ore surged from 407,822 MT in 2007 to 784,082 MT in 2008.

Chromite Ores are mainly located in the mountainous region of Sohar, Somail and Sur. The quality of metallurgical grade chromite ores from Somail is the highest in terms of Cr2O3 content. The grade from Somail region is 32% - 42%. The most abundantly available grade is the 34% Cr2O3 content. Higher grades -  45% Cr2O3 are available in limited quantity.

One of the appealing to investors features of Oman is the presence of abundant mid-grade chrome ore deposits and availability of cheap energy – thus making the Sultanate an ideal spot for location of ferrochrome smelters. This is further enhanced by excellent transport and logistics infrastructure that provides access to the world consumer markets.

Al Tamman Trading Establishment LLC (a wholly owned subsidiary of diversified Omani business house, Muscat Overseas Group) is the biggest producer and exporter of Omani chrome ore, mined from two deposits at Samad A’Shan in Al Mudhaibi wilayat, and at Wadi Rajmi off the Sohar-Shinas road.  The chrome ore is filled into shipping containers and exported out of Port Sultan Qaboos, primarily to Chinese and Indian markets. This page describes the chromite operations of the company. Records maintained by the Port Services Corporation (PSC), which operates and manages the Muscat port, around 1,000 containers filled with lumpy and concentrated chrome ore are shipped by Al Tamman out of PSQ every month. The first ferrochrome smelter in the Sultanate is being constructed in a joint venture between Al Tamman Trading Establishment and  Indsil Hydro Power and Manganese Ltd at the plant at Sohar with estimated commencement in July 2012. This will be a 75,000 MT per annum capacity ferrochrome plant with estimated investment of $70 million. As part of the ferrochrome smelter project, Al Tamman Trading Establishment is also planning to develop a 100,000 MT capacity beneficiation plant for low grade chrome and manganese ores.

Oman Chromite Company SAOG (founded in 1991; based in Sohar) engages in mining chromite deposits - drilling, blasting, excavating, and transporting chromite ore from the mountains near Sohar. The Company produces different types of chrome ore, including metallurgical grade ore and refractory grade ore in different sizes (up to 25 millimeters) and specifications.

Gulf Mining Group has played a major role in establishing Omani chrome ore in the world market. Starting off on a modest scale in 2006, it is now one of the key producer and exporter. The Group offers chrome ore in lumpy and fines form with chrome content ranging 24% - 42%. Oman’s first chrome ore beneficiation plant is managed by the Group at Wadi Mahram in Wilayat Samayil; intake capacity of 15,000 MT per month.

 Hatton FZE operates one of the largest chromite quarry in Somail area, south of Muscat, Oman. The chromite ores are of various grades and ranges from 30% to 42%. The production capacity is 2,000 MT per day or 40,000 MT per month or 480,000 MT per year. Since Oman is a desert and almost never rains, production can continue year round. 

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