Ministry of Industry discloses main amendments to new mining investment law

Major Amendments to the New Mining Law & Expected Impact

Major amendments

Expected impact

Financial consideration and encouraging investment in value chains

- Determining the financial consideration for exploitation according to the type and categories of minerals as well as the type of exploitation license.

- Motivating investors to process raw materials within the Kingdom by reducing financial consideration for companies that invest in these operations.

- Achieve financial justice for all beneficiaries

- Contributing to increasing the Kingdom’s revenue.

- Encouraging investment in value-added chains for the minerals industry and providing industrial raw materials locally.

- Clarifying the regulatory requirements for developing, operating and closing the mine for the investor to take into account in his investment decisions.

- Providing financial incentives to support sector development and investment in common infrastructure between the public and private sectors.

Sector governance

- Providing technical competencies and modern financial and technical resources.

- Developing the beneficiary’s trip and employing technologies to serve the sector.

- Setting controls to ensure financial commitment and achieve optimum utilization of mineral resources.

- Evaluate all requirements for obtaining licenses

- Increasing Kingdom’s revenue.

- Increasing the coverage of mining operations.

- Ensuring that license holders comply with the best technical and environmental standards.

- Reducing the number of violations which contributes to raising the investment attractiveness for complied companies.

- Raising the efficiency of controlling mining violations using modern technologies.

- Create jobs for local communities.

Sustainability

- Obligating applicants of some licenses to submit an environmental study and plan for the development of local communities, rehabilitation and closures.

- Obligating holders of exploitation licenses to provide a financial guarantee for rehabilitation and closure.

- Reducing law violations by determining the causes of penalties and raising the fines value.

- Developing local communities and providing new job opportunities.

- Increasing the contribution of local content to local communities’ development.

- Protecting rights of local communities and contributing to the economic development of the least developed regions.

-Attracting and encouraging Saudi youth to work in the sector.

- Ensuring that appropriate standards are in place to monitor environmental compliance, health and safety.

-Promote the principle of social licensing and making mining welcome in local communities.

Licenses regulations

- Allowing the issuance of licenses for small mines for some Class A metals, such as gold and precious stones.

- Reducing the procedures and requirements of mining licenses for small investors.

- Amending the periods and areas of some exploitation and detection licenses to improve the mining investment environment.

- Granting the investor the right to mortgage licenses and changing company’s management after notifying the ministry without requiring permission.

-Increasing numbers of local developers and small investors.

-Finding financing channels for mining licenses.

- Providing a safe and attractive investment environment for small and large investors.

- Clarity and transparency of the requirements for obtaining mining licenses.

- Increasing statistics, geological information and developing databases.

- Increasing exploration spending rates.

Powers to grant licenses on the Kingdom’s lands

- Facilitating the process of issuing licenses and reserving mining areas for mining investment as mining complexes.

- Determining the lands excluded from the law and the lands on which approval must be taken before granting licenses for exploration and exploitation or seizing them for mining activities.

- Determining the legal instrument for separating government agencies through a committee to determine the powers of land use.

- Ensuring the stability of mining licenses over the validity of the license.

- Increasing transparency in the Ministry's powers to enhance investor confidence.

- Development of mineral deposits areas.

- Reducing procedures period.

- Eliminating duplication of local land regulations.

- Clear governance to determine land-use powers.

- Reducing the investors’ risk which leads to increased investment and capital spending.

Sustainable Financing

Setting up a mining fund at the ministry

-Granting the ministry a sustainable source of funding to ensure long-term contracting and reduce program costs.

-Support exploration and general geological survey activities.

- Supporting the rehabilitation activities of abandoned mines.

- Providing sustainable financing for Mining Services Co.

- Supporting training and development for cadres in the sector and research studies.