7 licenses Required in Saudi Mining Sector: A Guide for Investors

Saudi Arabia is poised to attract both local and international investors, with its rich mineral resources, modernised regulations, and substantial government incentives.  The kingdom is rapidly becoming a global hub for high-value industrial and mining investments, with the mining sector surpassing $80 billion in opportunities. The streamlined licensing and approval processes now make it easier than ever to get started, ensuring your investments take off without delay. In this blog, we provide an expert overview of Saudi Arabia’s mining regulatory framework, licensing procedures, and compliance requirements to help investors unlock opportunities in this growing sector.

Government Incentives for Investors:

Saudi Arabia offers a range of incentives to attract investments in its mining sector. These include:

• Tax Exemptions: Reduced corporate tax rates and exemptions on import duties for mining equipment.
• Funding Support: The Saudi Industrial Development Fund provides loans with competitive interest rates for mining-related infrastructure.
• Infrastructure Investments: Development of transport networks, ports, and power facilities to support mining activities.
• Transparent Licensing: A clear and predictable legal framework, complemented by investor-friendly digital platforms.

Mining Licences and Permits in Saudi Arabia:

 Saudi mining sector is regulated by the Mining Investment Law which was implemented in 2020. This law ensures a transparent and streamlined licensing process, offering investors clarity and confidence.

1.Mining License

The mining licence grants investors the right to mine and exploit minerals classified as Classes A and B. It also permits the transfer and sale of the extracted minerals, along with full operational rights.

• Duration:

The licence is issued for an initial period of 30 years and can be renewed for an additional 30 years, with the total duration not exceeding 60 years.

• Fees:

• Application: 10000 SAR
• Issuance: 20000 SAR
• Renewal Fee: 20000 SAR

• Compliance Requirements

Applicants must meet the following requirements to comply with exploration licence regulations:

• Valid Licence Area: The application site must be located within the boundaries of an existing and valid Exploration Licence area.
• Renewal Deadline: Submit the renewal application no less than 180 days before the licence expiration date.
• Environmental and Social Impact Plan: Provide a plan for managing environmental and social impacts, updated when applying for licence renewal.
• Rehabilitation and Closure Plan: Submit an updated plan detailing measures for site rehabilitation and closure as part of the renewal process.
• Economic Feasibility Study: Include a comprehensive study assessing the economic viability of exploiting the ores and minerals.
• Technical and Financial Evidence: Provide proof of technical expertise and financial capability to carry out the proposed activities.
• Financial Guarantee: Submit the required financial guarantee as specified by the relevant authority.

2.Reconnaissance License

The reconnaissance licence permits investors to explore specific areas for targeted minerals. It allows them to visit the selected sites, collect samples from the designated land, and access relevant data and maps provided by the Saudi Geological Survey (SGS).

• Duration:

The license is issued for a duration not exceeding two years, and renewable for one additional period of no more than two years.

• Fees:

• Application: 5000 SAR
• Issuance: 5000 SAR
• Renewal Fee: 5000 SAR

• Compliance Requirements

To comply with the terms of the licence, the licensee must adhere to the following:

• Submission of Studies: Deliver all studies and sample results upon completing the surveying works.
• Sample Limit: Ensure that the total weight of samples collected from the licensed site does not exceed one tonne.
• Timely Renewal: Submit a renewal application at least 90 days before the licence expiration date.
• Administrative Area: Specify the administrative area covered by the licence.
• Exploration Plan: Provide a proposed exploration work plan.
• Competence and Capability: Submit proof of technical expertise and financial capability.

3.Exploration License

The exploration licence grants investors the right to search for specified minerals within a designated area. This includes conducting surface mining activities and performing geophysical and geochemical analyses.

• Duration:

Licence Durations for Mineral Categories

Categories A and B:

• The licence is issued for an initial period of 5 years.
• It can be renewed for additional periods, each not exceeding 5 years.
• The total duration, including renewals, must not exceed 15 years.

Category C:

• The licence is issued for a non-renewable period of one year.
• Fees:
• Application: 5000 SAR
• Issuance: 5000 SAR
• Renewal Fee: 5000 SAR

• Compliance Requirements

To comply with the conditions for licences under categories (A) and (B), the following must be fulfilled:

• Licence Renewal: These licences can only be renewed. Applications must be submitted at least 30 days before the licence expires.
• Environmental and Social Impact Plan: Provide a plan to manage environmental and social impacts, updated when submitting a renewal request.
• Community Development: Include a plan for managing social impacts, with contributions to local community development.
• Minimum Exploration Spend: Commit to meeting the minimum required spending on exploration activities.
• Financial Requirements: Provide evidence of financial solvency and submit a feasibility study.

4.General Purposes License

The license allows the investor holding the mining license or small mining to establish facilities or use lands outside the license site for the purpose of achieving public objectives.

- Duration: It is not stipulated by the ministry of industry and mineral resources.

- Fees:

• Application: 10000 SAR
• Issuance: 20000 SAR
• Renewal Fee: It is not stipulated by the ministry of industry and mineral resources.

• Compliance Requirements

The following requirements must be fulfilled to meet compliance criteria:

1. Mining Licence: Obtain either a mining licence or a small mining licence.
2. Timely Application: Submit your application at least 90 days before the licence expires.
3. Land Area: Ensure the land size matches the planned facilities and infrastructure to meet the objectives of the licence.
4. Licence Details: Provide all relevant information about the mining or small mining licence.
5. Impact Studies: Conduct assessments of environmental and social impacts.
6. Rehabilitation Plans: Prepare plans for rehabilitation and site closure.
7. Financial Guarantee: Specify the type of financial guarantee and the method of its submission.

5.Building Materials License

The building materials quarry licence grants investors the right to mine and exploit Class C minerals. It also permits the transfer and sale of the extracted minerals, along with full operational rights.

• Duration:

The licence is issued for a period of 10 years and can be renewed for one or more additional periods, with each renewal not exceeding 5 years.

• Fees:

• Application: 10000 SAR
• Issuance: 20000 SAR
• Renewal Fee: 20000 SAR

• Compliance Requirements:

To comply with the regulations, applicants must fulfil the following conditions:

• Location Selection:

• Choose a site within designated mining complexes.
• If the site is outside these complexes, an exploration licence for the desired location is required.

• Timely Renewal: Submit the licence renewal application at least 90 days before the licence expires.
• Environmental and Social Impact Plan: Provide a detailed plan for managing environmental and social impacts, updated as part of the renewal application.
• Rehabilitation and Closure Plan: Submit an updated plan outlining strategies for rehabilitation and closure of the site.
• Economic Feasibility Study: Present a feasibility study assessing the economic potential of exploiting ores and minerals.
• Technical and Financial Evidence: Provide proof of technical expertise and financial capability to carry out the proposed activities.
• Financial Guarantee: Submit the required financial guarantee as stipulated by the relevant authority.

6.Small Mining License

The small mine licence grants investors the right to mine and exploit minerals classified as Classes A and B. It also permits investors to transfer and sell the extracted minerals while retaining full operational rights over the mining activities.

• Duration:

The license is issued for a duration of 20 years, and renewable for an additional 20 years. The total duration of the license and its renewal does not exceed 40 years.

• Fees:

• Application: 10000 SAR
• Issuance: 20000 SAR
• Renewal Fee: 20000 SAR

• Compliance Requirements

Applicants must ensure the following requirements are met:

• Valid Licence Area: The application site must be located within the boundaries of the valid exploration licence area.
• Timely Renewal: Renewal applications must be submitted at least 180 days before the licence expiration date.
• Environmental and Social Impact Plan: Provide a detailed plan for managing environmental and social impacts, updated when applying for licence renewal.
• Rehabilitation and Closure Plan: Submit an updated plan outlining measures for site rehabilitation and closure as part of the renewal process.
• Economic Feasibility Study: Include a study demonstrating the economic viability of exploiting the ores and minerals.
• Technical and Financial Evidence: Provide proof of technical competence and financial capability to undertake the proposed activities.
• Financial Guarantee: Submit a financial guarantee as required by the regulatory authority.

7.Surplus Raw Materials License

The surplus raw materials licence allows the transportation of Category (C) mineral ores from the site to external locations for sale or utilisation. This is permitted only if the materials are located within project sites or on privately owned land.

• Duration:

Issuance the license: One Year

• Fees:

• Application: 10000 SAR
• Issuance: 20000 SAR
• Renewal Fee: It is not stipulated by the ministry of industry and mineral resources.
• Compliance Requirements

Applicants must adhere to the following conditions:

• Ownership: The applicant must own the land or project related to the application.
• Material Classification: The metallic materials must be classified under category (C).
• Site Details: Specify the exact area of the site, including geographical coordinates, from which the materials will be transferred.
• Material Specification: Clearly define the type and quantity of the raw materials intended for utilisation.
• Authorised Permits: Provide all necessary permits from the relevant authorities permitting operations at the site.

Governify takes the hassle out of managing government and HR tasks. It streamlining everything from visa applications to license renewals in one easy-to-use platform.

With its abundant reserves of phosphate, gold, copper, and rare earth elements, Saudi Arabia is strategically positioned to become a global leader in mining. The Kingdom’s reforms are aligned with international best practices, promoting innovation and sustainability. Investors can expect a stable, growth-oriented environment backed by government support.

Operate Your Business in Saudi Arabia’s Flourishing Mining Industry Without hassle!

Incorpify is simplifying your journey! With cutting-edge tools designed to streamline your incorporation process, we take care of everything—from automated document submissions to real-time progress tracking. Stay compliant, save time, and focus on building your vision while we handle the details. Start your hassle-free setup with Incorpify now!