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Oman Mining

The paramount player in Oman’s mining industry is Minerals Development Oman (MDO). Although recent experience shows that foreign firms can acquire mining permits, foreign investors still face bureaucratic and environmental challenges in Oman.

Though the U.S. – Oman Free Trade Agreement removes the requirement to share ownership with a local partner, U.S. companies will likely only be able to enter the market as service contractors or joint venture partners with Omani firms

In February 2019, the government issued the long-awaited Law of Mineral Wealth (“mining law” which increased the minimum mining license period from one year to five years, introduced flexible royalties, and broadened the scope and authority of the Public Authority for Mining (PAM). Coinciding with the mining law’s publication, PAM announced the identification of 110 new mining blocks that it will offer for exploration and investment, and issued new licenses to several companies. 

In mid-February 2020, PAM announced plans to tender 15 to 20 pre-approved mining blocks this year and promised to issue exploration licenses within 14 to 20 weeks of the successful bid. On February 26, 2020, PAM opened public bidding for the first two pre-approved mining blocks in areas known for marble, limestone, and dolomite deposits. While the local press reported on February 23 that public bidding for the blocks would be open to both Omani and international investors, PAM only offered the first two mineral blocks to Omani firms, according to a statement by PAM’s CEO. The article noted future pre-approved blocks for investment hold rich deposits of chromite, silica, gypsum, carbonate, attapulgite, clay, basalt, laterite, and feldspars. 

The paramount player in Oman’s mining industry is Minerals Development Oman (MDO), a state-owned enterprise that is a conglomeration of four Omani sovereign wealth funds and government investment entities. MDO has received multiple mining licenses in the country and is investing heavily in prospective mineral resources, and has been affirmed to be the government’s preferred partner for mineral concessions.

Alara Resources, an Australian-based mineral exploration and development company, is one of the few foreign companies that have received a mining license as part of a joint venture with a local company. In August 2019, British firm Savannah Resources, a major shareholder in Oman-based Al Fairuz Mining LLC, received mining permits for two copper deposits in Oman.

Although the experiences of Alara Resources and Savannah Resources show that foreign firms can acquire mining permits, we assess that foreign investors still face considerable bureaucratic and environmental challenges in Oman.

The U.S. – Oman Free Trade Agreement removes the requirement to share ownership with a local partner, yet the U.S. Embassy Muscat’s Commercial Section assesses it is likely that U.S. companies will only be able to enter the market as service contractors or joint venture partners with Omani firms. 

Other key projects within the sector include mineral processing and refining facilities in the Port of Duqm’s industrial zone. Oman is also considering the development of an internal rail network for the transportation of minerals from the southern interior to the Port of Duqm, and the government is exploring the development of a PPP for the mineral line railway operation. 

 

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