While Australia is often discounted when discussing APAC economies, it is part of the official APAC region. Consequently, investors in the area may be interested in the Australian mining sector with significant potential to export skills and services to Saudi Arabia. However, before we delve into this subject in more detail, it is essential to note that Australia is the fourth largest mining country in the world, behind China, the United States, and Russia. It also has an economy that has performed better than most in recent times.

 

Australian economic background

 

It would be foolish and misleading to suggest that the various financial challenges have not impacted the Australian economy in recent years. However, this is a country which has been extremely well-managed going back more than 50 years.

 

Looking back to the 1960s, Australia's only negative GDP growth years were 1983 at -2.2%, 1991 at -0.4% and 2020 at -0.1%. Moreover, you will notice that the Australian economy managed to avoid recession in light of the US financial crisis brought on by the collapse of the subprime mortgage sector in 2008. Against this relatively stable economic background, it is easy to see why investors looking towards the APAC region would consider Australia.

 

History of mining in Australia

 

The mining sector we see today in Australia can be traced back hundreds of years:-

 

• Late 18th to mid-19th century, the gold rush
• Late 19th century, the addition of copper, silver, lead and zinc mining
• 20th century, Australia became a significant producer of coal, iron ore and bauxite
• The 1950s onwards, mining began for uranium

 

Modern-day Australia is a leader in mining for iron ore, coal, bauxite, alumina, gold and nickel. Recent regulatory changes have prompted huge investment across the industry to reduce the environmental impact and create sustainable business models.

 

Exporting skills and services to Saudi Arabia

 

Many people will be surprised to learn that Saudi Arabia has a blossoming mining industry, with growing demand for equipment, technology and services. This plays into the hands of the Australian mining sector, which has all of these elements in abundance. Australian companies are now involved in the development of smart cities as well as mining for battery metals, which are central to enhanced efficiency and reduced emission targets.

 

Recent laws introduced by the Saudi Arabian government have reduced some of the previous red tape, allowing overseas companies to apply for licences to operate in the Kingdom. Particular areas of interest include:-

 

• Exploration
• Drilling
• Extraction
• Land and air surveying

 

We then move on to the enormous potential for infrastructure development in areas such as:-

 

• Mineral processing
• Mineral consultancy
• Education
• Training

 

In the longer term, the adoption of environmentally friendly and sustainable business policies will also see the emergence of new sectors such as:-

 

• Digital technology
• Quality and safety solutions
• Environmental services
• Mine safety equipment and services

 

The Saudi Arabian authorities are forecasting a 200% increase in the economic contribution from the mining sector over the next decade. This equates to creating 219,000 jobs and a sector worth $63.9 billion, with identified mineral reserves expected to hit $1.3 trillion over the next three years. 

 

Summary

 

Against this backdrop, it is easy to see why the Saudi Arabian authorities are looking towards the Australian mining sector for help and assistance. Legislative changes were targeted at mining operators in Australia, offering them a chance to apply for licences in Saudi Arabia. Even though there have been environmental and sustainability issues in recent years, those operating in the Australian mining sector are in demand.

Back to News