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Mining The MENA mining sector will see strong growth in over the coming years, especially after the ease of sanctions on Iran. (Photo: NooScapes/Shutterstock)
Battered by price storm, MENA still taps prospects The World Bank believes metals prices will rise more sharply in 2017 than it had forecast in July as a result of fasterthan-expected mine closures. Nnamdi Anyadike reports. LOBAL MINING ACTIVITY is struggling to recover from its downturn at the start of 2015. Last year’s depressed metals prices, combined with falling demand in China and the rest of the key world economies, has led to fears in some quarters that the bottom of the cycle may not be reached in 2016. A recent Ernst & Young report says that this year the mining sector experienced its fifth consecutive year of decline. Overall, capital raised across the global mining sector has been down by about 10 per cent year-onyear since 2015. The decrease was primarily due to a sharp drop-off in loan finance to the sector. This fell to US$44bn in 2015 from US$122bn in 2014. In response to the downturn, Anglo American, Nyrstar, Freeport-McMoRan and Glencore have all announced their intention to divest assets. This bear sentiment has had a negative effect on the Middle East and North Africa’s (MENA’s) mining sector and indeed, its wider economy. The region hosts more than 30 per cent of global mineral reserves. Yet, it lacks exploration and resource development investment. Political unrest, lack of proper governance, limited infrastructure and
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technological advancements have all played their part in stunting growth in MENA‘s nonmetallic minerals market. A case in point are the Khunayfis and Al-Sharqiya phosphate mines in Syria that were operated by Syrian mining company Compagnie Generale des Phosphates et des Mines, where production is now at a standstill. Further west in North Africa, Morocco, the Western Sahara and Egypt remain globally important regions for phosphate production. The US Geological Survey (USGS) estimates a combined output of 30mn tonnes of phosphate rock per year from Morocco and the Western Sahara. But as of November 2016 there was still no sign of a political settlement between the two desert nations, 25 years after a border ceasefire was put in place. And tensions are once again building. Neighbouring Tunisia produces 2.8mn tonnes, less than half the eight million tonnes produced five years ago, although there are plans to increase this significantly. In October this year, secretary of state for mines, Hachemi Hmidi, said he was optimistic about the improvement of Tunisia’s phosphate production. This follows a recovery in activity at four production sites that had been blocked by protest
Technical Review Middle East - Issue Five 2016
movements. The goal is to increase phosphate production three to four million tonnes per year. Egypt produces three million tonnes of phosphate rock per year and there are plans for a US$1bn expansion. In August, a delegation of major Chinese mining firms visited the country’s AbuTartour phosphate plateau to lay the foundation for a project to manufacture phosphoric acid as a primary phase towards producing phosphate cement. Meanwhile, Saudi Arabia and Jordan each produce three million tonnes of phosphate per year. This summer, Saudi Arabia’s Ministry of Energy, Industry and Mineral Resources announced that it was willing to launch more investment licences in the mining sector. Licences are being granted to zinc and other minerals, as well as phosphate. The goal is for the mining sector to contribute up to US$25bn to the kingdom’s economy by 2020. Mining’s current contribution to the country’s GDP is a mere 2.5 per cent. Saudi Arabia’s largest mining company, Ma’aden, is boosting its output in gold and base metals mining, phosphates, aluminium and industrial minerals including magnesite, kaolin and low-grade bauxite. Saudi Arabia’s www.technicalreview.me