Oman looks to privatize its mining industry

As a gesture towards generating more investment in the private sector, the country of Oman plans to privatize its state-run mining concern.

Oman Mining began life in 1973 as a partnership between the independent sultanate of Oman, situated in the southeastern Arabian Peninsula, and Toronto-based Marshall Prospection. In 1980, the sultanate bought out Marshall’s interest and assumed sole ownership. Copper production continued until about two years ago, when reserves began to run out.

Oman’s strongest asset is a custom smelter at Lasail in the northern part of the country. In 1980, Oman Mining spent US$150 million to build a concentrator, smelter, refinery and power station to process copper ores from three small massive sulphide deposits in the area. Grade and tonnage amounted to 12 million tonnes of about 2% copper.

However, these reserves eventually declined to the point where they could no longer support the smelter, which then began processing custom ores from South America and Southeast Asia. The smelter’s capacity is 100,000 tonnes of copper concentrate per year, while annual production is estimated at 25,000 tons of blister copper.

Oman Mining’s assets include two advanced-stage massive sulphide deposits that contain 8 million tonnes grading 1% copper and 0.008 oz. gold per tonne. Known as the Rakah and Hayl As Safil, the properties lie 100 km south of Lasail. The oxidized cap of the Rakah is being mined for gold, while copper concentrates would be sent to Lasail by truck over dirt roads.

Besides the various material assets of Oman Mining, the country possesses excellent potential for copper and gold exploration in the Samail ophiolite sequence, which is the largest and best-exposed structure of its kind in world. The sequence represents a 20-km-thick slice of oceanic crust obducted onto the Arabian Peninsula during Cretaceous time.

The base of the sequence consists of 10 km of mantle material (hartzbergite, dunite), which grades up into a sheeted dyke complex of basaltic composition. Pillow lavas and other volcanics and volcaniclastics, and finally oceanic sediments, overlie the sheeted dyke complex.

Like other ophiolites in world (the Troodos complex in Cyprus, for example), the Samail is a host environment for volcanogenic massive sulphides within the volcanic assemblages near the top of the sequence. It has a history of copper mining dating back to Sumerian times, more than 3,000 years ago.

Other mineral occurrences in the Samail ophiolite include small pockets of chromite.

Oman Mining has sole exploration rights in the country, and also is entitled to search for minerals in the neighboring United Arab Emirates, where it operates the Khorfakken rock quarry.

Oman is an absolute monarchy ruled by Sultan Qaboos bin Said, under whose rule remarkable strides in modernization have occurred. Paved highways and water treatment facilities are but two of the many improvements that have occurred since his reign began in 1970. While the sultan holds absolute power, he delegates most government affairs through a series of ministers.

Lying at the eastern edge of the Arabian Peninsula, the country comprises more than 200,000 sq. km, making it slightly smaller than Nevada. The population of about 2 million is concentrated around the capital city of Muscat on the northern coast.

While cities on the coast are modern, the interior is comparatively primitive. Difficult road conditions have slowed the development of the Rakah and Hayl As Safil deposits. The terrain is mostly rugged, and the climate is hot and humid.

Industry in Oman is dominated by oil and gas, which remain the chief exports.