JEDDAH: Petroleum and Mineral Resources Minister Ali Al-Naimi on Sunday signed the first of seven licenses for the exploitation of cement raw materials.
United Cement Company won the first license for mineral exploitation and its director general, Fahd bin Abdullah Al-Harbi, signed the deal on behalf of his company.
“This license is issued as part of the first phase during which two more licenses would be issued to exploit limestone used for Portland and white cement,” said Sultan bin Jamal Shawly, undersecretary at the ministry for mineral resources.
The licensed area is Hurrat Hadhen in Taif, he said.
Shawly also said that the ministry would give the license to the company that makes the largest financial offer.
“We’ll announce the winners of the second and third licenses next Saturday at the beginning of the new Hijrah year 1433H,” he added.
He said the licenses are being issued with certain conditions that should be strictly followed by the winning company.
“One condition is that they should employ and train Saudi workers and the percentage of Saudi workers should be not less than 40 percent by the end of first year after starting production,” he said.
“We have also insisted that the number of Saudi workers in the company should reach 80 percent after the completion of four years,” the official said.
Total annual production capacity should not exceed two million tons.
The company that wins the license should also apply modern and efficient technology in cement industry, leading to better use of energy.
“The company should also abide by safety and security regulations to qualify for the license,” Shawly said. The company should conduct a study on environmental impact before starting operation.
Speaking about the remaining four licenses, he said the ministry had conducted studies on a number of potential limestone regions.
“We’ll call for tenders after receiving approval from authorities,” the official said.
“We have to make sure that these areas do not come under places that are exempted from mineral investment.”
United Cement Company is licensed to exploit limestone in Saadiya mountains in Allaith, about 200 km south of Jeddah.
The licensed area covers about 22 sq km.
Among the 20 pre-qualified companies, five made their offers with United making the highest bid of SR11 million.
Other companies vying for the license were Al-Ahsa Development, Abdul Aziz Al-Amran, Yamamah Trade, and Gulf Cement.
The ministry selected the place for exploitation as it contained high-quality limestone suitable for cement production.
“We expect that the licensing of exploitation of limestone in Allaith would contribute to the development of the region, creating more job opportunities for its people,” Shawl said.
In 2008, the ministry reserved 6 mining locations for the exploitation of limestone, pozzolan, aggregates, crusher materials and sand in Riyadh, Makkah, Eastern Province, Baha and Jazan.
In addition, 7 mining complexes were surveyed with a total area of 8,290 sq.km, including locations for silica sand, phosphate, barite and aggregates in Makkah, Tabuk and the Northern Border Region.
Minister Al-Naimi, meanwhile, said he considered the global oil market as balanced.
When asked how he sees the balance between global oil supply and demand, the oil minister of the world’s largest crude exporter asked the reporter’s view of the market.
The reporter replied he believed the market was balanced, to which the minister said, “I agree with you.”
“Everything is fine now,” Al-Naimi was quoted as saying in a Reuters report.
He was speaking on the sidelines of an energy conference in Riyadh, when asked about the outlook on demand.
He said oil prices are determined by the market and that Saudi Arabia accepted them.
The conference titled “Partnering for a Sustainable Future” is attended by more than 700 delegates from around the world and keynote speakers include Finance Minister Ibrahim Al-Assaf, Saudi Aramco CEO Khalid Al-Falih, and Chairman and CEO of ExxonMobil Rex Tillerson.
It is the inaugural dialogue event of King Abdullah Petroleum Studies and Research Center.
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