Vision 2030
The blueprint that puts mining at the forefront
The truth is, while in this story, mining in the The Kingdom of Saudi Arabia (KSA) is the key subject, the plot and theme are all about Vision 2030, the unifying force and thread that runs through every interview, every conversation, and every insight shared by more than 60 executives that we met with while researching this report.
But what exactly is Vision 2030, and why does it matter so much? In essence, Vision 2030 is a social and economic blueprint proposed in 2016 by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud with a clear purpose: to diversify KSA’s economy and open the country up to the world. This ambitious plan is unfolding in phases, and one of its key goals is to position the mining sector as the third pillar of KSA’s industrial economy, after oil & gas and petrochemicals.
What exactly was the wake-up call that set this vision into motion? For much of its modern history, Saudi Arabia’s economy has been and continues to be heavily reliant on oil. However, depending so heavily on a single commodity presents challenges, especially when the cyclical nature of commodity markets causes volatility. Without going into the causes, from 2014 to 2016, oil prices collapsed. After peaking at US$107.95 per barrel on June 20, 2014, prices plummeted to US$44.08 per barrel by January 28, 2015.
In 2016, according to a World Bank report, oil accounted for more than 80% of KSA’s government revenues. Just think about how that price drop would have affected this revenue. With these factors in mind, Vision 2030 started to take shape. The question was not whether KSA could keep relying on oil but whether it could actually thrive without it. The search for new pillars of economic strength began and mining was placed at the forefront of that vision. The third pillar of the economy At its core, Vision 2030 rests on three pillars, each with its own KPIs: a Vibrant Society, a Thriving Economy, and an Ambitious Nation. All three shape the country’s aspirations at different levels, but we will focus on the “Thriving Economy” pillar, which encapsulates the mining industry our scope.
On the economic front, KSA’s ambition is to diversify government revenue streams by raising non-oil revenue to US$267 billion by 2030 from US$43 billion today, increasing women’s participation in the workforce to 40%, and raising local participation in the oil and gas sector from 40% to 75%. But what about mining?
Vision 2030’s goals expect the mining sector’s GDP contribution to grow from US$17 billion in 2015 to US$75 billion. Estimations are not only for economic contribution. In terms of mineral endowment, the Kingdom’s estimated value of mineral reserves has increased by 88% from SAR 5 billion (around US$1.33 billion) in 2015 to SAR 9.4 trillion (US$2.5 trillion) by 2023.
So far, those are expectations, but what are the real advancements? According to the latest governmental figures, the mining and metallurgical industries have experienced substantial growth since 2015, with their GDP contribution increasing by 88% to SAR 120 billion (US$31.96 billion) in 2023. Investments in the sector now total SAR 170 billion (US$45,27 billion), and mining licenses have surged by 554, with 1,465 licenses anticipated by the end of 2024.
The Kingdom’s advancements in this sector may have gone un-noticed, however, projects like NEOM a flagship of Saudi Arabia’s giga-projects are impossible to ignore. Spanning 26,500 km2 and powered entirely by renewable energy, NEOM is best known for THE LINE, a 170-km long city. This, and other giga-projects (14 in total, including Qiddiya and Red Sea Global), will have a significant impact on the mining industry. They are expected to multiply the demand for metals and minerals, and even with operations running at full capacity, KSA will face challenges in meeting this demand.
Vision 2030 is one of the most comprehensive and well-thought-out plans out there. The level of commitment behind it, especially in terms of how it is translated into the mining sector, is something you just do not see in other mining regions right now. As Graham Dallas, head of business development EMEA at the Toronto Stock Exchange & TSX Venture Exchange, said: “Seeing such an important country evolve at this speed is exciting. It feels like they are navigating a unique moment in history; it is refreshing to see a major new player fully embracing this reality. The more people adopt this mindset, the better for the global economy, especially with the growing demands of the energy transition.”
Can KSA build up an industry based on the buzz it has created? In the upcoming articles, we will detail everything the Kingdom has already done and continues to do to make Vision 2030 a reality.
Article header image by Anton Balazh at Adobe Stock