MENA mining sector sees bonanza in coming years

The mining sector in the MENA region is expected to witness a strong growth over the coming years. (File photo: Reuters)

The mining sector of the Middle East and North Africa is projected to see a strong growth over the coming years, Business Monitor International said in its MENA Mining Report Q3 2013.

With low base effects, governmental will to increase non-oil revenues and significant resources it appears the region is set for strong growth.

Turkey and Northern Iraq were identified as key areas for growth. That said, the region will remain peripheral in the global mining sector as it continues to underperform due to political instability in much of the region, the report noted.

The majority of capacity additions in phosphates coming years will be coming from Saudi Arabia and Morocco. Ma’aden in Saudi Arabia began diammonium phosphate (DAP) production in 2011 and will reach the steady-state production rate of 3mnt (million tons) DAP by 2013.

The Office Cherifien des Phosphates (OCP) will also be adding significant new capacity to the market between 2013 and 2015.

As producers from Saudi Arabia and Morocco generally sit on the left side of the cost curve, some high-cost capacity (typically Chinese producers) who do not have access to lower-cost rock, may be displaced, the report further said.

Bucking the trend in mined minerals and metals, the fertilizer market was strong in 2012 as food and agriculture remain key needs in the global economy. Despite the sharp downturn in Chinese demand for bulk and base metals, strong demand for fertilizers, delayed expansion projects and announced plant closures led to a strong year for phosphate producers, the report further said.

“We do not expect this market tightness to continue though as additional supply from Saudi Arabia and Morocco ramp-up to full capacity,” it pointed out. Global phosphoric acid production is expected to reach 43 million tons by 2015.

This article was first published in the Saudi Gazette.

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Last Update: Wednesday, 20 May 2020 KSA 09:41 - GMT 06:41
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