Saudi Arabia is looking to update its focus from oil to precious metals. To do this would not be easy, but the county does sit on some of the largest precious metals and natural minerals resources in the world. For Saudi Arabia to become a leader in the gold industry, the country must start by investing in gold mining infrastructure. In time, this would build a new revenue source for the country.
A Brief History of Gold Mining in Saudi Arabia
Gold was first found and mined in Saudi Arabia around 3000 BC in what was known then as Arabia. In modern times, however, bullion mining began during the reign of King Abdul Aziz of Saudi Arabia, when a deposit was discovered in 1932. In 1997, the then government established the mining corporation known as ‘Saudi Arabian Mining Company’ a joint-stock company (MA'ADEN) with SR4 Billion as capital.
How Can Gold Mining Be The Future of Saudi Arabia?
Under Vision 2030, Saudi Arabia plans to ease the kingdom's dependency on oil, and shift its economy away from fossil fuels. For economic development, the governing body in Saudi Arabia has listed mining as a third pillar under the Saudi Vision 2030 infrastructure.
An untapped $1.3 Trillion worth of mineral resources sits in Saudi Arabia at the moment, of which there is an estimated $229 billion worth of gold. The gold mining industry of Saudi Arabia itself can fuel new employment, providing steady job sources for different positions. Furthermore, The Saudi Ministry of Industry and Mineral Resources is said to have received more than 1500 licensing requests in 2021 alone. This makes it accessible for foreign companies to invest in the Saudi Kingdom.
The Future of Gold in Saudi Arabia
Al-Duwaihi, one of the largest gold mines in Saudi Arabia, is known to hold far more than 50% of the kingdom’s gold production. With further development to be aided by the 2030 infrastructure vision, the Saudi Arabian ministry can further push the development of gold production. The area itself has an estimated production of 180,000 ounces of gold a year.
In 2021, the Saudi government, under the application of Vision 2030, made it possible to invest in gold via exchange-traded funds (ETF). Incepted last year and known as the Albilad Gold ETF, it is Saudi's first-ever Shariah-compliant commodity ETF in the region and was established to invest in gold. This is expected to further interest in bullion mining in the region.
Conclusion
For Saudi Arabia to become a leader in gold mining would mean pushing infrastructure further. By implementing the kingdom's Vision 2030 plans and driving economic growth, Saudi Arabia can attract foreign investment from global buyers who are already involved in the gold trade. And with the allure of the oil-rich Saudi Kingdom opening the gates to new forms of trade, it will only be a matter of time.
