Muscat: In a major initiative to develop the Sultanate’s mining sector, four state-owned investment arms of Oman have come together to promote a OMR100-million mining development company called Mining Development Oman (MDO).
The state-owned agencies — the State General Reserve Fund (SGRF), the Oman Investment Fund (OIF), the Oman Oil Company and Oman National Investments Development Company (Tanmia) — will equally own promoters’ capital of OMR60 million. The remaining OMR40 million will be raised from the investing public through an initial public offering (IPO) in the second quarter of this year.
The four partners signed a memorandum of association for establishing the new firm on Tuesday in presence of Dr Ali Masoud Al Sunaidi, minister of commerce and industry.
Mining Development Oman will carry out both downstream (such as mining) and upstream activities, which include exploration and extraction processes. The company also plans to collaborate with Oman’s private sector, whether as a partner, contractor, supplier or promoter of projects.
Al Sunaidi, who highlighted the importance of the mining sector, said this is one among five sectors identified for driving economic growth during the ninth Five-Year Plan (2016-2020) period.
Besides, it complements two other important sectors — the logistics sector and downstream industries. “Now we have enough facilities in the Sohar and Salalah ports that enable companies to export minerals,” the minister told journalists after the signing ceremony.
Al Sunaidi also said the mining sector might have grown by 20 per cent in the just concluded year, although the contribution of the sector to gross domestic product is small.
“The global markets are promising, our ports are ready to handle materials and the minerals are ready. There is a diversity of minerals in Oman,” explained the minister.
During the next few months, the newly-formed MDO will conduct studies on the financial and technical aspects in a move to offer shares to the public. Once the company gets concession areas from the Public Authority for Mining, it will find strategic partners. All these are expected to be completed in the next few months to get ready for the public offer, the promoters said.
“Great attention accorded to the mining and mineral sectors is in line with the government’s planning in terms of diversification of income sources and achieving optimum utilisation of (resources in) such a vital sector, with a view to boost the national economic development by leveraging the mineral resources of the Sultanate, within an integrated system to develop the mining and logistics sectors’ infrastructure,” said Abdul Salam Mohammed Al Murshidi, executive president of SGRF. The new firm will also help introduce best international practices in the field of mining and associated areas in the country.
Issam Saud Al Zadjali, chief executive officer of the Oman Oil Company, said the establishment of the project would help make qualitative and concrete progress in the mining and mineral industry, which in turn, will drive the development of the non-oil sectors and the diversification of sources of national income.
Khalid bin Ali Al Yahmadi, director general of investment at the Oman Investment Fund (OIF), said this project stood out among other projects carried out by OIF in terms of the prevailing spirit of cooperation among the founding parties of the company, with a view of realising the goal of establishing it, which is to lay the cornerstone for the development of the mining sector and utilisation of the full potential of the mineral resources of Oman.
Sheikh Rashid Said Al Saadi, chief executive officer of Oman’s National Investments Development Company, highlighted the importance of such mega projects in expediting economic growth and surmounting all crisis, through value addition and by contributing to gross domestic product and job opportunities.