Thursday, April 24, 2014

MENA Mining (x): Oman - 2




THIS ORIGINAL POST WAS PUBLISHED August 05, 2011

MENA Mining (x): Oman - 2



This is a continuation of the previous post.

Copper/Gold


Around the third millennium BC Oman appears in various documents as “Majan” a land whose seafaring people carried the commodity precious at the time: copper. Copper was in great demand in Sumerian cities, which referred to Majan as “The Mountain of Copper”. The country has copper reserves of around 4.3 million tons at 2.2% Cu and resources of 21.6Mt at 1.8% Cu.  Despite copper mining in Oman for about 5,000 years, only recently it was discovered that some, but not all, copper deposits in Oman additionally contain gold.  The average size of the Oman copper deposit is about 8 MT each, and a gold-rich deposit of this size would contain about 150,000 tons of copper and 6-8 tons of gold.  Thus, gold has remarkable potential in Oman, which is the only Gulf country with substantial gold reserves other than Saudi Arabia.

Modern copper mining started in 1983 at Lasil, Aarja and Bayda with fully integrated mine, smelter and refinery. It totaled production of 14,000 tons of electrolytic copper annually.   The Wilayat of Yanqul contains copper ore in commercial quantities and large deposits are expected on the Batinah coast. Many other mountains are sitting on huge copper reserves, awaiting better extraction techniques. This June it was reported that recent survey in Mahab 4 and Maqail South Blocks of Sohar area revealed the possibility of substantial deposits of copper – which is a new page in development of mineral.
 
Mawarid Mining  was established in 1997 as National Mining Company and is the first private sector mining company to engage in the exploration and development of copper/gold.
Operates several open pit copper mines and processes ore at its Copper Concentrate facility in the Al Batinah region;
Major mining and processing operations are located in the Al Batinah region
Ore occurs as shallow open pit copper massive sulphide deposits. Mines have a cut-off grade of 0.3% copper and average grades of 2-3% copper.
Copper ore is hauled by trucks to Mawarid’s Lasail concentrator (20 km West of Sohar): upgrades mined ore (2-3% copper content), to 18% - 24% copper grade;  throughput of 105 tons/hour with 90% availability.
Concentrate is sold for further processing to the international market for export and to Oman Mining Company LLC  that operates the Lasail smelter and refinery complex adjacent to the concentrator.

In 2010 an US-based Gentor Resources Inc, started a program to develop copper deposits in the in the Samayil Ophiolite, northern Oman. It has initiated initial drilling program at copper/gold properties near Sohar.

A Muscat-based Al Thuraya Mining LLC is a joint venture with Indian Jindal Aluminium Ltd. operating since 2008 is presently in the process to find out the potential on the eastern side of the Northern Mountains of Oman for copper.


 Australian mining Alara Resources Limited explores two projects: Daris Copper-Gold in the Sohar area in a Daris Resources LLC joint venture with Al Tamman Trading Establishment LLC.  Alara will invest up to a total of $7 million for 70% shareholding. Alara also secured rights to earn-in up to a 70% interest in the Awtad Copper-Gold Project that is adjacent to Daris.
Alara is also forming a new joint venture company, Alara Resources LLC (AlaraCo) with Sur United International Co LLC, to identify, secure and commercially exploit other resource projects in Oman.



Manganese

Manganese production in Oman is conducted on a low scale with modest demand. As it was reported last June the mainstream price of manganese ore 30% (28% rejection) is in the range of USD4.4-4.5/dmtu CFR China. The same source cites two producers with monthly production of 1,000 -2,000 tons of manganese ore 30%(28% rejection).

Potentially promising deposits are located in the Sharqiya region of Oman – they are developed by  Al Tamman Trading Establishment LLC on concessions in Al Mintirib Wilayat,  Mintirib, Al Qabil, Al Mudhaibi and Jaalan. A beneficiation plant is slated to be established in the Sohar Industrial Estate. This page describes the manganese operations of the company.

Minerals City

Takamul Investment Company, a majority Omani government owned investment vehicle, plans to establish a Minerals City in the Sultanate to serve as a hub for a number of minerals-based processing projects. The Mineral City will have three major minerals derivatives projects: a magnesium-ferrosilicon project (estimated cost: $250 million); a 40,000-tonne capacity silicon carbide processing facility ($40 million - in partnership with SNAM Abrasives of India); and a $450 million project for a salt/soda ash project (in partnership with the Tata Group).

Vale in Oman


Considering strategic location of Sultanate, and abundance of gas, the world top iron ore miner Vale established a special relationship with Oman.

 The first Vale's production unit  line in started its operations last June at Sohar Industrial Port and the integrated steel complex of Jindal Shadeed Iron and Steel is scheduled to soon begin using Vale's iron ore pellets in iron casting for structural work, automobiles, airplanes and ships. The second unit will begin production by the end of 2011; two units will have an annual production of 9MT. Vale owns 70% of Vale Oman Pelletising Co, Oman Oil Company – 30%. The pellet plants are located in an area where Vale has a distribution center with capacity to handle 40 Mtpy.


Source: WOMP. The Mining E-Journal.

Due to the lack of basic iron ore in the Sultanate, the project imports basic raw iron materials from Brazil, while benefiting from locally produced limestone and natural gas. This June it was announced that Vale has set up a new company in Oman to explore mining opportunities in the Sultanate - Vale Oman Minerals Exploration; that is scheduled to conduct geophysical tests for potential base metals.

Doing Business and Mining Investments

The Oman Chamber of Commerce and Industry provides a special page for the subject matter and you may download this Doing business in Oman



Oman is in the top 30 ranking list as to its legal provisions for doing business:


 
Source: Investment Climate & Opportunities by The Omani Centre for Investment Promotion and Export Development (OCIPED)

Mining activities in Oman are governed by the Mining Law (Royal Decree 27 of 2003) that covers all major issues. As an example, for establishing joint ventures:
Ministry of Commerce and Industry issues a mining concession/license to an Omani company or individual
Local license holders can partner with foreign investors if the license holder lacks the technology/resources to develop business
A mine exploitation agreement is executed.
 The Oman Law Blog has this useful explanation: Company Formation FAQ’s

This slide summarizes incentives for miners in Oman:


 Source: Gentor Resources - Copper in Oman TSX-V Listing - July 2011

Useful links:

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