Mining

Suliman Saleh Alothaim, Chairman, Saudi Gold Refinery Company, talks about the company’s resolve to develop Saudi Arabia’s nascent minerals potential and become the second largest mining enterprise in the nation.

A key lynchpin in Saudi Arabia’s ambitious diversification strategy is unlocking the nation’s significant mining potential that consists of large reserves of phosphates, copper, bauxite and gold. In January 2024, the country revised its estimated value of untapped mineral resources from $1.3 trillion to $2.5 trillion, in part through the inclusion of rare earth minerals used for electric vehicles and new technology products. The Kingdom’s larger private players are now rapidly positioning themselves to take advantage of the new impetus towards mining, including new government incentives and a large rise in foreign interest. Saudi Gold Refinery Company is one of Saudi Arabia’s oldest diversified mining companies, with roots back to the 1980s in retail and marketing under the Othaim jewelry empire. “From 1985 to 2000 the Saudi government mandated job localization and we expanded our business backwards to match the government’s Vision 2030 initiative,” said Suliman Saleh Alothaim, chairman of Saudi Gold Refinery Company. “We moved into refining and gold mining to create an integrated company.” The enterprise is now actively growing its local assets with the goal of becoming Saudi Arabia’s second largest mining company behind state-owned mining giant Ma’aden.

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  Chief among Saudi Gold Refinery Company’s assets is the Hamda mine located in the southwest of the country, which houses an estimated 1.83 million tons of gold. The Jabal Samran copper prospect located 75 miles northeast of Jeddah is the company’s second flagship project. The development is part of the mining entity’s drive to diversify its products beyond gold and is currently readying for an appraisal drilling campaign. Outside of the Jabal Samran concession, the company has applied for 30 local exploration licenses specifically in the copper segment. “Currently we have one mine in operation and 10 licenses under exploration,” said Alothaim. “We have applied for 160 locations, and we hope to secure more mines soon.” The chairman noted that while initial data provided by the government’s Saudi Geological Survey was an important start, more exploration data is required to confirm the feasibility of production activities. However, the Saudi Gold Refinery Company remains ambitious in its expansion targets; the company currently produces around 2 tons of gold per year with a set goal of producing 100 tons by 2027.

  

  To meet this substantial boost in operations, the company has undergone an aggressive hiring campaign, with experts procured from international mining hubs such as South Africa, the UK, Turkey and Australia. The business is also taking advantage of incentives offered to local businesses, including covering 75% of mining costs under the Saudi Industrial Development Fund. “We financed our initial mining independently but plan to utilize the [fund] for future projects,” said Alothaim. Outside of Saudi Arabia, Saudi Gold Refinery Company also owns mining locations in Morocco, Uzbekistan and Kurdistan.

Trading

Suliman Saleh Alothaim, Chairman, Saudi Gold Refinery Company, talks about the company’s efforts to cash in on the booming gold trading market and help bolster Saudi Arabia’s position as a top consumer and producer of precious metals.

As the global gold trading market experiences a significant surge, Saudi Arabia's mining sector is simultaneously witnessing robust growth driven by the nation’s strategic focus on diversifying its economy and capitalizing on its vast mineral wealth. The first quarter of 2024 saw gold prices soar to unprecedented levels largely driven by global economic pressures and increased gold reserves, with a peak at $2,350 per ounce in early April. Concurrently, Saudi Arabia's mining sector is embarking on a significant expansion, highlighted by a major gold deposit discovery in the Maakkah region by state-owned Ma'aden in late 2023. Private sector entities, including Saudi Gold Refinery Company, are now positioning themselves to play a crucial role in this burgeoning market.

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  Unlike many new entrants, Saudi Gold Refinery Company boasts a rich history in the gold trading industry, with a longstanding reputation as a designer and manufacturer of precious metals and gemstones. “As Saudi Arabia was developing, we entered the jewelry market because my father owned a building in the gold market center,” explained Alothaim. “He rented space to jewelers and had a real estate office, which we converted into a jewelry shop after his passing in 1980.” This was the beginning of what would become the Othaim jewelry empire. The chairman describes the reasons for the company’s later diversification strategy as being based on the gold trading market: “We created jewelry when gold was $800 per ounce. However, in 1982 the price of gold dropped to $400 per ounce, causing significant losses.” By 1983, the company had bounced back with established manufacturing operations in Italy, Hong Kong, Thailand and Singapore that produced luxury items inspired by celebrities such as Princess Diana.

  

  In 2024, Saudi Gold Refinery Company is now actively helping transform Saudi Arabia into a producer of both raw materials and luxury goods to satisfy domestic demand by becoming a major entrant into the nation’s nascent mining industry. The company has initiated its own exploration projects with a heavy focus on mining precious metals such as gold. By mid-2024, it had applied for 160 new mining permits with the goal of increasing production to 100 tons of gold annually by 2027. “Saudi Arabia consumes 150 tons of gold annually, making it the fifth-largest consumer in the world,” said Suliman Saleh Alothaim, chairman of Saudi Gold Refinery Company. “The country currently produces around 10-12 tons of gold annually, all of which is consumed locally. As production increases, we aim to satisfy local demand without the need for exports.” He also praised the government's emphasis on mining under its Vision 2030 initiative and identified the diversification strategy as the driving force behind his company's recent evolution.

CSR

Suliman Saleh Alothaim, Chairman, Saudi Gold Refinery Company, details the local giant’s social and environmental initiatives and its efforts to attract foreign participation in Saudi Arabia’s mining industry.

Under Saudi Arabia’s ambitious Vision 2030 program, the nation is set to not only substantially increase earnings from non-oil industries but also transform the ease of living of its residents. The government’s detailed social reform plan calls on prominent private sector players to lend a hand in reaching its target of moving Saudi Arabia up to tenth place on the Societal Capital Index by 2030, with a heavy focus on promoting localization, education and social welfare. Saudi Gold Refinery Company is taking advantage of its ambitions to become one of the largest private sector mining companies in Saudi Arabia to support Vision 2030 schemes, including supporting local training measures and minimizing its carbon footprint. “Sustainability is integral to our operations,” said Suliman Saleh Alothaim, chairman of Saudi Gold Refinery Company. “It is crucial we maintain a minimal impact on the environment.”

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  One of the company’s major contributions is increasing local education and knowhow to support a world-class mining hub. Saudi Gold Refinery Company’s recent large-scale hiring drive saw the addition of international expertise in areas such as geology, advanced drilling and drones. To properly upskill its employees, the private entity has developed a series of integrated training programs, including opportunities for locals to train in international settings such as South Africa and Canada. The company’s plans also involve collaboration with Saudi Arabian universities and the scientific community to promote research and development activities related to mining. “In terms of social impact, our mining operations provide jobs and support local communities through various initiatives, including education and sports,” said Alothaim. “We are involved in corporate social responsibility activities to help develop the region and improve the quality of life for residents.”

  The mining entity’s corporate social responsibility activities are also set to attract international participation in one of Saudi Arabia’s most important strategic sectors. To this end, the company’s lab has received an international-grade license from a London-based organization. According to the chairman, the company is also heavily committed to upholding international and national environmental standards: “Our operations include regular inspections and pollution control measures. We plant trees around our mines to maintain a healthy environment.” Moving forward, the mining frontrunner is actively inviting foreign partners to join in its expansion, including plans to launch an initial public offering after bringing five mines on line. The company is currently coordinating with consultants to form significant joint ventures. “All our capabilities combined make us a strong contender in the industry,” said Alothaim. “We invite international mining companies to collaborate with us.”