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Oman 2016 | MINING & INDUSTRY | INTERVIEW

TBY talks to Abdullah Ahmed Al Hadi, Chairman, and Mohammed Yahya Al-Shabibi, CEO of Gulf Mining Group of Companies, on areas of operations, business abroad, and opportunities in the Omani mining sector.

Abdullah Ahmed Al Hadi Yahya Al-Shabibi

Could you give us a brief overview regarding your core products and geographical presence?

Gulf Mining is considered one of the prime mining companies in Oman. We started operations in 2005 as a small company with only five employees, while now we have approximately 700 employees. In 2005, we only produced laterite, which we would sell to National Cement in the UAE. Production ranged from 20-27,000 tons according to the requirements of the cement factory. However, we decided to diversify and started producing chrome at a time when the government opened up for the private sector to invest. Our first shipment of chrome was to China in the middle of 2005 and was only 500 tons. From that time, we switched entirely from laterite to chrome as it was more lucrative. We had a concession in Wadi Mahram, which is in the Syma area in Dakhlia. From there, we increased our production from 500 tons to our average today of 20-25,000 tons of high grade and 7,000 tons of low grade, as well as the adopted concentrated plants. The first one opened in 2010, with the Undersecretary of Commerce & Industry. Our production levels are between 4-5,000 tons of concentrated material per month. As there is not much market for the low-grade produce, we have had to add value to it. We created a Chrome Ore Beneficiation (COB) plant to upgrade our material as a result. At the time, the prices were rewarding, but now there is a lot of competition, especially after South Africa opened up the market. There was then an idea to implement a ferrochrome plant in 2011. Our first initiative had many obstacles, especially as some public officials said that Oman was not ready for that kind of industry. We decided to shift it to the Sohar Freezone as recommended by the Ministry of Environment, and operations started in 2013. Financial support was provided by National Bank of Oman, and we also invested. The factory itself opened in January 2015.

How do Gulf Mining's operations outside of Oman differ from in Oman?

Internationally, we have already approached a few countries. We have some investments in Egypt with two mines, one in marble and one in granite. They also produce blocks and sell to the development market; it would also be possible to export. Secondly, we have some investments in Albania and have invested about $2 million in nickel mines. We have offices in Shanghai and Shenzen in China, as well as an office in Dubai. Those are mainly trading offices because we want to look after our material all the way from the loading port to the dispatching port. We have increased our production, but unfortunately the price has dropped tremendously because of the international market situation. The government is trying to focus more on the mining sector being a major contributor to the Oman economy. Gulf Mining management decided not only to concentrate on chrome, but also to invest in other materials available in Oman. For example, we invested in manganese when I took over the management of the group in early 2015. We started with 3,000 tons, and are now averaging around 10,000 tons per month. By 2016, the plan is to produce around 15,000 tons on a monthly basis.

What areas of the mining sector would be the most lucrative for foreign investors?

A good example is that Savannah from Australia found gold and copper ore earlier in 2015. They now want us as a partner. The government has certainly opened up in terms of foreign investors, although in terms of chrome, there are no more mines left. We are the largest producers at around 66,000 tons and Gulf Mining has more than 60% of the market share. There are many opportunities in gypsum, and there are already some partnerships with American investors. We have also entered into this kind of business and now have one quarry and a partnership with the locals. We produce about 50,000 tons per month out of a total of around 700,000 tons produced in month in Oman. It is a small amount for now; however, we are planning to increase our production to 150,000-200,000 tons within the next two years.