The kingdom of Saudi Arabia is a nation that is found in the Middle East, and it forms the larger part of the Arabian Peninsula and is bordered by Bahrain, Qatar, Iraq, Jordan, the United Arab Emirates, Kuwait, Oman, and Yemen. It occupies a land mass of 830,000 square miles making it the largest Middle Eastern country. The Kingdom is also bordered by both the Red Sea and the Persian Gulf. The country’s geology and size imply that the country has rich mineral resource deposits. Some of its primary natural resources include natural gas, petroleum, copper, gold, and iron ore. The country also recently began production of cement, low-grade bauxite, clay, propane, ethane, methane, and lead. The Arabian Shield located to the west of the country is particularly rich in gold, copper, silver, chromium, zinc, manganese, lead, tin, iron, tungsten, and aluminum. Sedimentary formations in the east are also known to contain feldspar, gypsum, salt, mica, and sulfur. Saudi Arabia is also a renowned source of rare and valuable minerals such as tantalum and niobium.
The Value of Natural Resources
The country is ranked third globally in terms of natural resources wealth with the total value of natural resources valued at $34.4 trillion. Saudi Arabia is only beaten to the top spot by the US whose estimated value of natural resources is $45 trillion and Russia whose value of natural resources is estimated at $75.7 trillion. The nation’s GDP is $795.58 billion, and the meteoric rise of the nation's economy was primarily fueled by oil and gas extraction which turned the once underdeveloped nation into a modern state and global heavyweight.
Major Natural Resources
Currently, the kingdom has the world’s second largest reserves of oil estimated at 268 billion barrels of oil. The deposits represent about 22% of the global oil reserves. Oil production in the nation began in the year 1933 while documented exports commenced in 1939. Currently, oil production dominates the nation's economy in terms of revenues generated. Oil deposits are found to the east of the country, the southern region near Kuwait and Iraq, and in the Persian Gulf. In 2017, the nation accounted for about 12.9% of global oil production, and the nation's oil reserves are estimated to last at least another 80 years at the current extraction rate of 10.2 million barrels per day.
Saudi Arabia currently has the sixth largest proven natural gas reserves estimated to be about 240 trillion cubic feet of proved natural gas reserves. About a third of the reserves are found in the eastern region of the country in the Ghawar region. The government has exercised tight controls on the production of gas in the country until recently. The Kingdom produced about 2,472 billion cubic feet of natural gas in the year 2008 and 3001.7 billion cubic feet of gas in 2015 representing a 2.7% annual increase in the output. The country is also among the world’s highest consumers of natural gas consuming around 3,813.9 billion cubic feet of natural gas. The increase in natural gas consumption is driven by the continued growth of natural gas's role in the nation's energy production. Despite the vast natural gas deposits, the Kingdom is not a notable exporter. The nation's natural gas deposits, however, contribute significantly to the Kingdoms energy security. In recent years the nation has also explored shale gas production. The country is expected to become a shale gas producer by the year 2020.
Gold mining was first carried in Arabia at around 3000 BCE. The second major resurgence in Arabian gold mining was in the Islamic Abbasid era between 750 CE and 1258 CE. Saudi Arabia's western region known as the Arabians shield consists of Pre-Cambrian rocks is particularly rich in gold deposits. Currently, over 600 gold deposit sites have been identified with mining taking place in only five of the sites. The mines include Sukhaybarat Mine, Bulghah Mine, Al Hajar Mine, Madh Ad-Dahab mine, and the Almar Mine. Gold extraction in the modern Kingdom began in 1939 and 1954 at Mahd Ad-Dahab during the reign of King Abdulaziz. The city of Mahd Ad-Dahab is located in the western part of the country about 191 miles northeast of the province of Madinah. Mining is mainly carried out through underground methods. Tunnel development is estimated to about 37 miles which are used to source for the ore which is then delivered to the metallurgical plant. About 183,425 tons of ore is mined at a grade of 0.0245 pounds of gold per ton. In the year 2007, mining operations resulted in the recovery of 58,256 ounces of gold. The largest gold mine in the country is Mahd Ad Dahab mine, which produced about 332,231 ounces of gold in 2017. The Sukhaybat Mine is located in the province of Al Qassim which is about 155 miles from Madh Ad-Dahab and 341 miles from Riyadh. The Bulghah mine is situated in the Al Madinah region of the country, and operations at the mine began in the year 2002, which are mainly known to process low-grade gold ore. The Al Hajar mine is situated in the southern parts of the kingdom about 441 miles from Riyadh, the capital city. Operations at the mine began in 2001 and produced about 1 ton of gold per annum. The Al Amar mine is found in the Ar Riyadh region, and it began operations in the year 2009 with the capacity of 220,262 tons per annum. The country is currently considering exploiting its untapped potential as global oil prices drop.
The Jalamid Phosphate mine in the northern regions of the country produces an estimated 11.6 million tons of phosphate raw material which are transported to the Ras Alkhair Port. Works are underway to establish the Waad Al-Shamal mine which is also found in the northern part of the country.
Aluminum in Saudi Arabia is produced through one of the most integrated projects in the world. It encompasses the Al Baitha Bauxite mine, an ore crushing facility situated 372 miles from Ras Al Khair, and a rolling mill. The facilities handle an estimated 4.4 million tons of bauxite.
Future Economic Plans
Saudi Arabia is currently considering diversifying from the hydrocarbon-based economy as oil reserves continue to decline. The diversification plans involve encouraging other sectors of the economy such as the service and entertainment sectors. The plan dubbed vision 2030 also involved privatization of Aramco and adoption of nuclear energy as a counterweight to energy produced using hydrocarbons.