Oman miner receives key licence for potash project
STRONG GROWTH: Gulf Mining Group seeks JV partners, strategic partner for major $300 million mineral venture
Gulf Mining Group, one of the largest privately owned mining corporations based in the Sultanate, has announced that it has received a licence to explore for potassium chloride deposits as raw material for its Sulphate of Potash (SoP) project.
Total investment in the venture, which will help commercialise potentially prodigious mineral resources in Um al Samim in the far west of the Sultanate, is estimated at $300 million, according to high-level executive of the group.
Mohammed Yahya al Shabibi (pictured), Chief Executive Officer — Gulf Mining Group, said: “I’m delighted to announce that the government has given us the exploration licence for our potash project. We will officially commence exploration activities within the next few months.”
Plans drawn up by Gulf of Potassium Mining LLC, a subsidiary of Gulf Mining Group, envisage a processing plant at the Um al Samim location close to Oman’s border with Saudi Arabia.
Also proposed is a blending plant that will be built at Duqm Port to convert potassium chloride into Sulphate of Potash (SoP), a premium quality fertiliser product used the world over primarily in the cultivation of high value crops like fruits, vegetables, nuts, coffee, tea and tobacco. SoP, with its potassium and sulphur components, enjoys a competitive edge over the more commonly available Muriate of Potash (MoP) type of fertiliser in world markets.
Speaking to the Observer, Al Shabibi said the Group is currently in discussions with potential investors as well as a strategic partner. “We are in the process of setting up the joint venture while also pursing discussions with investors and a strategic partner. To this end, we have met with a few delegations from Oman and abroad, from amongst which a selection will be made very soon.”
Gulf Mining Group will be a major shareholder in the project, with the Strategic Partner expected to take a sizable stake as well. Government funds will be invited to pitch in too, the CEO stated.
Last October, officials disclosed that the company is looking at a production capacity of around 500,000 tonnes per annum (tpa) of Sulphate of Potash (SoP), rising to 1 million tpa in the next phase of its development.
Al Shabibi sees a potential investment of $25-50 million over the next two years as exploratory teams and experts chart a feasibility strategy for the development of the massive potassium deposits in Um al Samim, which is estimated to hold in excess of 40 million tonnes in reserves.
“A lot of work is required to be done before we can get started with the actual project. But our experts have informed us that the site is very promising. We are confident this project will not only add value to Oman’s natural resources, but also boost the local economy,” he said
An important spinoff is the project’s potential to create a large number of jobs as well as stimulate business opportunities for Omani small and medium enterprises (SMEs). “We are looking to create around 500 direct jobs initially, but with downstream opportunities at the Duqm end, the employment generation potential will rise to 2,000-3000 openings. Prospects are particularly promising for SMEs,” he added.