Tuesday, April 22, 2014

MENA Mining (III): Saudi Arabia (II)




THIS POST WAS ORIGINALLY PUBLISHED JUNE 25, 2011


MENA Mining (III): Saudi Arabia (II)

In my Blog posts I frequently touch the issues of investments in mining
·                  Mining Companies: Where to Get Money?
Here I would like tor reproduce this slide from my earlier post:
2011 Africa - Investment Destination for Miners (Part I) this helps to understand existing risks for investors in mining.



According to the latest World Bank’s publication Doing Business in the Arab World 2011, Saudi Arabia is No.1 in Arab World as to ease of doing business. Indeed, it holds the top ranking position in the ‘protection of investors’ ratings. 

In 2010 the Saudi Council of Ministers adopted a Ninth Five-Year Development Plan (2010-14) – here an important role is allocated to development of mineral resources. Alongside with detailed analysis of the previous years, the plan lists the goals for 2010-14. In particular, on the issue of foreign investments, it sets, among the others, the following tasks:
·                  Increasing investment opportunities in exploring and manufacturing mineral wealth and providing all possible incentives and support for such activities.
·                  Providing a safe, attractive, efficient and transparent investment environment.
·                  Incentivising national and foreign investors to set up mining projects, especially those closely related to existing projects in other productive sectors.

Looking at investor attraction issues, here I would like to divide it into two components: 
(i) Country Specific; and (ii) Industry Specific.

Country Specific
Financing.
The Kingdom is a member of the Multilateral Investment Guarantee Agency (MIGA) and SAUDI ARABIAN GENERAL INVESTMENT AUTHORITY (SAGIA) provides all necessary assistance to foreign investors. SAIGA’s Website is the first thing that any investors should visit, before making any moves. There is a comprehensive set of all relevant information – starting from the process of obtaining a license,  cost of doing business, and download center that has very useful documents.
 Another valuable for investors organization is the Saudi Industrial Development Fund (SIDF). SIDF provides financial assistance in the form of short term loans to investors, plus offers technical, administrative, financial and marketing advice. The loans are medium and long-term for up to 50 percent of the total cost of the project. The payback period is up to 15 years, with a two-year grace period from the start of production. As the previous, the Website is meticulously worked out and has a very detailed information for investors.

Legal.
The Kingdom has established a highly supportive legal and regulatory framework. Under Foreign Investment Code foreign investors can own 100% of a business with or without a Saudi partner. Comprehensive information, including numerous links is provided on this Webpage: A Brief Overview of Saudi Arabian Legal Systemwhile some other links include Legal considerations for new InvestorsSaudi Arabia Investment guide 2010 by Al-Ghazzawi Professional Association and Herbert Smith LLP. There is a certain issue with investors’ anxiety on specific legal aspects of doing business. Here what the actual investor says: “The legal system of Saudi Arabia, Shariah, is sometimes viewed as an area of concern in the West and among major investors. In Bariq’s experience, although all dealings are Shariah compliant, there is no differentiation in practice at all.” (Saudi Arabia: A destination of choice for investors  Arab News, January 25, 2011)

Material Assistance.
Industrial projects get electricity, water, and other fuels to at low prices. The Kingdom’s industrial parks feature a variety of public utilities: high quality roads, electricity supply systems, desalinated water plants, sewage, communications facilities and services, as well as all necessary utilities infrastructure (mosques, fire stations, medical facilities, restaurants, post offices and police stations). Available land is located throughout Saudi Arabia in different industrial cities at nominal charges. Land for other uses is available on lease or sale. For development of industrial projects Saudi Arabia has advanced, state-of-the-art engineering supply and construction/contracting companies (equipment suppliers, maintenance, etc.)

Industry Specific

Leading position in world industry. Saudi Arabia is one of the Top 20 Emerging Mining Countries as cited by Business Monitor International.
Advantageous geographic position. Ample domestic, regional and neighboring markets in the Middle East and Asia for high grade, industrial raw materials from the Kingdom.
Third Pillar.  Mining sector is advancing as the third pillar of the Saudi economy at a projected rate of 9.1%.
Industrial Minerals is an essential segment of Saudi Arabia’s Non-Oil Mining sector, and its Saudi Diversification Plan
In its current Ninth Development Plan “calls for intensification of efforts to maximize exploitation of discovered mineral deposits and promote appropriate regulatory frameworks in order to attract investment into this promising sector, thereby increasing its contribution to GDP”.
Practical incentives for miners. Flat corporate tax rate of 20% ; absence of mineral royalties; highly competitive energy costs; import duties exemptions for approved mining equipment - 5% on other imported equipment. This all affects mine production costs, as it is shown on the following slide:
 

Substantial Developments in Infrastructure. As an example, an extensive rail network that benefits mining projects (see map in the previous post).The North-South railway is only one element of a national rail and road building program that drastically changes the accessibility to mining sites.Moreover, it is expanding continuously, as it is seen from the recent news: “… King Abdullah has ordered the linking of the new Hazm Al-Jalameed-Ras Al-Zour rail with Dammam through Jubail Industrial City… new rail will connect the major industrial facilities in Jubail, Ras Al-Zour and Northern Border Province with King Fahd Industrial Port and Commercial Port in Jubail and the King Abdul Aziz Port in Dammam.”

 There are also some challenges for investors, looking for Saudi Arabia – and according to certain analysts – these are: limited availability of drilling and lab facilities; and inadequate quantities of water supply systems. So these are possible areas for urgently required investments.
This ends my brief overview of investment attraction of Saudi Arabia’s mining sector. Comments are welcome
UPDATE. 
The upcoming issue of the 
International Resource Journal publishes the interview with Dr. Abdullah Basodan—the chairman of United Mining Investments Company (UMIC):
“A continent rather than a country” - this discusses opportunities and recent events in non-oil mining in Saudi Arabia. 
READ HERE

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    ReplyDelete
  29. I am a private lender, I grant loans to
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  30. We give out loan With an Interest rate of 2.0%
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  31. We give out loan With an Interest rate of 2.0%
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  32. Do you need Financial Assistance? We can help you?
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  33. Do you need a quick long or short term loan with a relatively low interest rate as low as 3%? We offer Xmas loan, business loan, personal loan, home loan, auto loan,student loan, debt consolidation loan e.t.c. no matter your score, If yes contact us via Email: finance2014911@gmail.com Fill The Loan Application Form Below Name............ Amount Needed........ Duration.......... Country............ Monthly income....... Age............. Phone Number........ Sex ................. Email................Business Plan/Use Of Your Loan:....... Apply now on this email :finance2014911@gmail.com Warm Regards Dr Purva Sharegistry

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  34. Hello Are you looking for a business loan, personal loan, home loan, auto loan, student loan, debt consolidation loan, unsecured loan, venture capital etc... OR Were you refused a loan by a bank or any financial institution for one or more reasons. You are in the right place for your loan solutions! We are Christian loan organization,we give out loan to those that are in need of it positively, and also those that are trust worthy,we also grant out loans to companies and individuals at a low and affordable interest rate of 3% Interest please contact us via email:ecloans87@yahoo.com

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  35. Do you need Financial Assistance? We can help you
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  36. Do you need Financial Assistance? We can help you
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  37. How I Got My Loan From A Genuine And Reliable Loan Company

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  38. Do you need Financial Assistance? We can help you
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  39. DK FINANCIAL SERVICE is a Global Financial Services Firm Committed to helping our customers improve their long-term financial success.

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    ReplyDelete
  40. DK FINANCIAL SERVICE is a Global Financial Services Firm Committed to helping our customers improve their long-term financial success.

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    ReplyDelete
  41. Greetings to you by ADIA.

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    ReplyDelete

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  43. Do you need Financial Assistance? We can help you
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  44. Dear valued customer,

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    ReplyDelete
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  46. Hello Everybody,
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  48. Are You A Business Man Or Woman? Are You In Any Financial Mess Or Do You Need Funds To Start Up Your Own Business? Do You Need A Loan To Start A Nice Small Scale And Medium Business? Do You Have A Low Credit Score And You Are Finding It Hard To Obtain Capital Loan From Local Banks And Other Financial Institutes?. - Intermediaries / Consultants / Brokers Are Welcome To Bring Their Clients And Are 100% Protected. Interested Parties Should Contact Us For More Information Through Via E-mail: CYSCredits@Post.com ( CYSCredits@Asia.com )

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  49. GOOD DAY AND WELCOME TO STANDARD ONLINE FINANCE LTD
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    ReplyDelete

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  59. NEED A LOAN?
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  60. We are a fully registered and certified loan firm, that offers secured and unsecured loans to individuals and companies at a very low interest rate of 2%. We offer long and short term loans.Our company has recorded a lot of breakthroughs in the provision of first class financial services to our clients, especially in the area of Loan syndication and capital provision for individuals and companies. We have brought ailing industries back to life and we back good business ideas by providing funds for their up start. We have a network of Investors that are willing to provide funds of whatever amount to individuals and organizations to start business and operations.We are a group of energetic and experienced loan professionals with thorough knowledge of financial markets.In general we offer mortgages, home loans business loans and bad credit loans commercial loans, start-up- working capital loans construction loans car loans, hotel loans Xmas loans Our interest rate is 2% per annual repaid, our loan takes a maximum of 3 working days to get to all approved customers across the globe.You can contact us via
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  64. Are you a business man or woman? Do you need funds to start up your own business? Do you need a loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offer guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: standardonlineinvestment@gmail.com
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    ReplyDelete

  65. Do you need a quick long or short term loan with a relatively low interest rate as low as 3%? We offer business loan, personal loan, home loan, auto loan, student loan, debt consolidation loan e.t.c. no matter your credit score. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and transferred to the borrower within the shortest time possible. We encourage you to contact us and learn more about the loans service we offered. If you have any questions or want more information about our company, please do not hesitate to contact us: debyfinancingloans@gmail.com Whats-App contact number +918375004762

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