Mineral Wealth Law

Opportunities in Oman’s Mining Sector

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3 Investment Opportunities (Mining Blocks)

Mineral Prospectivity of Oman

Content

Salim Al-MahrouqiDirector General Of Minerals Investments Affair

Public Authority for MiningSultanate of Oman

Copper/GoldChromiteGabbro (Aggregates)Nickel LateriteBasaltZinkLeadMarbleLimestoneDolomiteManganeseLateriteClaysSand Silica GypsumSaltLithiumCoalQuartziteCarbonatite

Salt/PotashLithium

LimestoneDolomiteGypsumClaysSilica

Mineral Prospectivity of Oman

Active CommoditiesPotential Commodities

43.40

18.06

8.44

1.34 0.55 0.50 0.45 0.31 0.22 0.03 0.02 0.01 0.01 005

101520253035404550

2017 Production mln Ton or M3

1.8 1.4 1.2 1.4

22.2 22.7

28.725.7

49.445.8

43.4 41.8

0

10

20

30

40

50

60

2015 2016 2017 2018

Total Annual Production

Metal (mln Ton) Industrial Minerals (mln Ton) Building Materials (mln m3)

Mineral Prospectivity of Oman

Salt/Potash

Silica…

Dolomite

Clay

Gypsum

Limestone

Copper

Laterite

Manganese

Marble

Chromite

Aggregate

Potential Resource in Oman (based on relative prospectivity from know deposit models)Relative Current Activity (no. of licences relative to each other)

Schematic

Resource Potential vs. Relative Current Activities for established commodities in Oman

Source: Oman Mining Strategy 2018

Mineral Prospectivity of Oman

Based on: Review of commodities

previously identified in historical studies

Mineral occurrence inventory*

Licence database Geological terrains

Chart1

Salt/PotashSalt/Potash

Silica SandsSilica Sands

DolomiteDolomite

ClayClay

GypsumGypsum

LimestoneLimestone

CopperCopper

LateriteLaterite

ManganeseManganese

MarbleMarble

ChromiteChromite

AggregateAggregate

No. of Licence Records

Relative Activity Level

0

6

9

23

23

38

43

54

135

192

274

282

351

كميات لكل خام

كمية الإنتاج والبيع والريع لكل خام لعام 2016م

المعدنكمية الإنتاج (طن)كمية البيع (طن)الريع (ر.ع)Metal Production quantity (ton) Quantity (tons)

الرخام1,380,370.0001,235,844.0001,431,552.223MarbleMarble 1,380,370,000 1,235,844.000

الحجر الجيري12,471,107.00010,157,562.0001,550,315.133LimestoneLimestone 12,471,107.000 10,157,562.000

الجبس7,857,599.0006,758,487.0001,006,493.208GypsumGypsum 7,857,599.000 6,758,487,000

الملح5,086.0004,470.00015,645.000SaltSalt 5,086,000 4,470,000

الكروم512,542.000517,339.0001,629,853.155ChromiumChromium 512,542,000 517,339,000

خام الحديد (اللترايت)628,816.000596,235.000178,870.500Iron OreIron ore (iron ore) 628,816,000 596,235.000

مواد البناء (بالمتر المكعب)45,290,803.00042,366,019.0006,735,936.085Building Materials"Building Materials

مادة اللدن (الطين)524,108.000500,887.000250,737.800Clay(In cubic meters) "45,290,803.000 42,366,019,000

الرمل الزجاجي (الكثبان الرملية)36,549.00035,303.0008,825.750Glass SandThe material of clay (clay) 524,108.000 500,887.000

الكوارتزفيلد361,540.000338,502.000135,400.800Quartzfield"Glass Sand

النحاس0.0000.0000.000Copper(Sand dunes) "36,549,000 35,303,000

الكاولين188,300.000187,036.00056,110.800KaolinQuartzfield 361,540.000 338,502.000

منغنيز14,628.00024,158.00030,062.464ManganeseCopper 0.000 0.000

السيليكا16,600.00020,345.0004,069.000SilicaKaolin 188,300,000 187,036,000

الإجمالي13,033,871.918Manganese 14,628,000 24,158,000

Silica 16,600,000 20,345.000

Total

كمية الإنتاج والبيع والريع لكل خام للنصف الأول لعام 2017مThe quantity of production, sale and price per raw for the first half of 2017

المعدنكمية الإنتاج (طن)كمية البيع (طن)الريع (ر.ع)

الرخام625,599.000590,371.000630,219.325Marble

الحجر الجيري6,881,612.0004,035,462.000643,355.784Limestone

الجبس3,317,451.0003,226,632.000741,472.068Gypsum

الملح8,369.0004,865.00017,027.500the salt

الكروم125,336.000133,415.000712,480.584chrome

خام الحديد (اللترايت)250,274.000233,809.00065,262.620Iron ore

مواد البناء (بالمتر المكعب)16,156,064.00014,638,176.0002,392,980.118"Building Materials

مادة اللدن (الطين)250,126.000254,058.000122,740.200Material (clay)

الرمل الزجاجي (الكثبان الرملية)9,214.00010,039.0002,509.750Glass Sand (Sand dunes)

الكوارتزفيلد182,579.000163,240.00065,296.000Quartzfield

النحاس0.0000.0000.000Copper

الكاولين70,800.00070,112.00021,033.600Kaolin

منغنيز0.0000.0000.000Manganese

السيليكا12,500.00012,946.0002,589.200Silica

الإجمالي5,416,966.749

Quantity of production (ton) Quantity of sale (ton) Rent (RO)

1000000No. of Licence RecordsCommodity

6Salt/Potash

9Silica Sands

23Dolomite

23Clay

38Gypsum

43Limestone

54Copper

135Laterite

192Manganese

274Marble

282Chromite

351Aggregate

كميات لكل خام

No. of Licence Records

Minerals Wealth LawMain Themes of the Mineral Wealth Law

Optimum exploitation of mineral wealth

Simplifying procedures and promoting investments

Environmental protection, heritage and water resources

Community rights

Promote scientific research

Audit and inspection Empowering PAM

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Optimum exploitation of mineral wealth

The minerals are owned by the state and it is prohibited to own, possess, or act without a license even if they are located on land owned by private property.

Not granting licenses except after verifying the technical capability and financialsolvency of the investor.

Not to export minerals except after ensuring their optimal leverage and availability in the local market.

Not to grant licenses to exploit precious stones or precious metals, or for areas greater than (5) square kilometers, but rather according to a concession agreement that is approved by Royal Decree.

It is permissible to expropriate private lands because of their mining importance.

Obligation of the investor to fees, royalties from the value of sales of minerals, surface rental of the license area, and to provide a bank guarantee for the proper implementation of the license terms.

It is prohibited to work outside the licensed area, to continue to work after the license expires, or to exceed the limits and scope of the license

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Simplifying Procedures and Promoting Investments

Increase the minimum mining license period from (1) years to (5) years, and the concession agreement is not less than (20) years.

Increasing the upper limit of the license area from (3 sq km) to (5 sq km).

Establish a mining registry in which all geological and mining information and data that the investor needs is recorded.

Government agencies must cooperate to provide and develop facilities and infrastructure for mining areas.

The commitment of the competent government agencies to reply within a maximum period of (60) sixty days for license applications

Enabling the investor to add morethan one ore to the mining license

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PAM is responsible for obtaining approvals for mining areas and offer them to competitive bidding according to the principles of transparency and equal opportunities

The royalty is charged in different percentages according to the economic viability of each mineral.

Expanding the powers of inspectors

Accurate clarification of the acts/violations that constitute crimes against the Sultanate’s mineral wealth and illegal profit and increase the penalties for its perpetrators

Impose direct administrative fines for correctable violations.

Audit and inspection3

Combating trade of licenses

Obliging the investor to rehabilitate the area and remove waste and deformationsaccording to the approved rehabilitation plan

Protecting water resources, aflaj, dams and reservoirs and not encroaching upon them.

Environmental protection, heritage and water resources4

The authority is obligated to enforce the requirements of environmental protection, healthand safety when granting licenses.

Violations related to the environment and public safety are subjected to fines. Thecontinuation of violation may lead to the suspension or revoke of the license.

Prohibition of encroachment on meteorite, fossils, historical relics or rare geologicalphenomena/sites and must cease operating immediately upon their discovery.

No less than (1%) of the sales that is devoted to the development of the local community.

Employment of the national workforce.

Community rights5

Infrastructure protection and non-infringement

The licensee is fully responsible for the damages that is caused by the company to others, even if the damage occurred outside the authorized area.

2Regulations for competition for mining sites

1 The executive regulations of the Mineral Resources Law

Regulations necessary to implement the law

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۱۰Within a year from the date the law was issued

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Procedures for issuing and renewing licenses

Financial benefits to the authority (royalty, financial insurance, annual

rent) and collection procedures

Concession procedures and related terms and conditions

Procedures and controls for scientific research licenses

Mineral registry procedures

List of services and fees

Licensing procedures and controls

Administrative penaltiesProcedures for collection and

disbursement contributing to the development of the local community

Mineral export procedures and controlsTypes of licenses

Rights and Obligations of Licensees

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The executive regulations of the Mineral Wealth Law

Administrative penalties

Controls of receiving, evaluating and deciding on offers

Procedures for selling mineral ores that are confiscated by PAM in accordance with the provisions of the law

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Issued

The mechanics of offering mining sites for competition, procedures and detailed controls for each type

Governance of offering and awards with clear roles and responsibilities to ensure transparency, and equal opportunities among investors

Regulations for Mining Sites Bidding

Investment Opportunities (Mining Blocks)

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Pre approved acreage of land of different sizes with indications for the presence of ore minerals. They are to be offered for investment on competitive basis.

Mining Blocks Initiatives

Commodities No. of Blocks Area (Km2)Chromite 30 13,948Marble 13 1,117

Limestones 12 2,911Dolomite 20 308

Silica 8 293Gypsum 3 589

Carbonatite 4 0.23Kaolin 2 0.494

Attapolgite 2 143Poters Clay 2 0.5

Basalt 1 10Laterite 8 500Feldspar 5 24

Total 110 19,844

Blocks Offered for Mining Only

• Area ≤ 5 Km2• Completed

exploration study.• Resources & reserve

defined.• Commodities do not

require extensive exploration activities.

• Blocks had mining activities.

• Right to mine specific minerals.

Blocks Offered for Exploration to Mining

• Area ≤ 5 Km2• Right to Explore &

Mine.• Exploration then

mining permits.• Right to mine

specific minerals

Blocks Offered as Concessions

Area > 5 Km2 or Precious

Minerals.• Right to Explore &

Mine or only to Mine.

• Right to mine specific minerals

20 – 30 Years. Requires

Concession Agreement.

Ratified by RD.

• Any area.• Carry no or little

data.• Right to Explore only.• Cost recovery ( +

Margin) through sale of data

Blocks Offered for Exploration Only

Commitment to set up local mining/manufacturing industry.

Types of Mining Blocks Offered For Bidding

Exploration all activates that are necessary to assess the mineral potential of a given area up to definition of resources/reserve including drillings, testing and surveying

• Public Announcement• Open to local and/or

international• Any type of blocks

• By Invitation only• Specific companies –

local/International

• Public Announcement or By Invitation

• Open to local investors only

• Specific type of blocks• By Invitation - local and

International• Specific type of blocks• Evaluate technical

submission• Negotiate financial

offering

Public Tender

Limited Tender

Local Tender

Limited Single Source

Mining Block Bidding Types

Submissions Evaluation PermitsAnnouncement

Payment of the financial offer

Exploration Permit

Evaluation of the Exploration results

Agreement on the down stream project

based on the economic discoveries

Mining Permit

Bidding Procedures For Blocks Offered for Exploration to Mining & Concession

Brochure receipt

Financial Submission

Technical Submission

Refundable financial guarantee.

Brochure(Fees)

• Terms and conditions applies in accordance with the Executive Regulations of the Mining Wealth Law

Financial Solvency

Financial Offer.

Investment % in mining and manufacturing

industries.

Exploration Program.

Technical experience.

Evaluation Criteria For Blocks Offered for Exploration to Mining & Concession

Premium

Annual recurring rate of annual production

Financial Submission65%

Exploration programContentTiming

Cost

Technical Experience

% of Investment in mining and manufacturing industries from total

capital cost of the project

Technical Submission35%

Financial Solvency

Thank You

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