Omani companies take innovative approach to developing mineral downstream segment

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The abundance of mineral resources in Oman has long been known, however, its full potential has only recently been tapped. The non-metallic mineral limestone has a purity of 99.8%, the highest in the world, and gypsum, of which Oman is the largest exporter globally, provide a steady source of GDP for the sector. However, the most notable growth has been seen in metals.

In 2019 the sultanate’s copper potential dominated headlines, with a number of companies embarking on exploratory projects across the country. However, while these projects remain in the development stage, several other metals are also beginning to show dividends. Increased emphasis is being placed on driving value into resources by focusing on downstream developments such as processing plants, rather than looking exclusively to the establishment of new extractive sites.


The mineral chromite is an oxide of chromium and iron that is used mainly in metallurgical industry for the manufacture of ferroalloys – key components of stainless steel. Estimates show that Oman holds around 30m tonnes of chromite ore, or roughly 2% of the world’s reserves, located mainly in the mountainous regions around Sohar, Sumail and Sur. The quality of metallurgical grade chromite ores from Sumail is the highest in terms of chromium oxide content. According to the National Centre for Statistics and Information, production of chromite grew to around 687.7m metric tonnes in 2018, up from 452.7m in 2017. High demand for this product, especially in steel manufacturing centres like China and Japan, gives it strong export potential. In 2019 Oman accounted for 10% of chromite production globally, and Minerals Development Oman has recently signalled a commitment to further developing this production by acquiring a 15% stake in public shareholding company Oman Chromite.

In recent years local Gulf Mining Group (GMG) has emerged as one of the largest producers and exporters of chrome ore, which generates approximately 70% of the company’s total revenue. As of 2019 GMG was constructing a third underground mine – a method of extraction with multiple benefits such as reducing environmental impact, cutting down on transport times and generating a more pure product.


In terms of downstream, January 2019 saw the signing of a deal between the Sohar Freezone and Al Tamman Indsil FerroChrome, a joint venture between Muscat Overseas Group of Oman and Indsil Group of India, to expand the existing ferrochrome processing plant. The development will add a further 37,500 tonnes in production capacity, bringing the total capacity post expansion to around 112,500 tonnes per year. GMG has also announced that it is pushing ahead with plans to triple the capacity of its ferrochrome smelting plant in Sohar, with an investment of around $70m. Production of manganese, a metal widely used in the steel industry, nearly tripled between 2017 and 2018, from 13.6m tonnes to 36.1m tonnes. GMG plans to establish a manganese ferroalloy smelter adjacent to their existing ferrochrome plant at Sohar. A 4000-tonne-per annum-capacity smelter will be built in the project’s first phase, with further developments to be pursued after completion. GMG’s processing plant in Samail, a 15,000 tonne per month project, was launched in 2018 with the goal of capitalising on the manganese extracted from the company’s quarries in Ibra.

These GMG projects, along with the substantial developments in copper being implemented by Savannah Resources and Alara Resources, demonstrate the holistic approach that companies are taking throughout Oman’s mining sector. There are clear strategies to develop processing capacity as a route to faster economic growth rather than placing focus exclusively on increasing extraction. This strategy provides good opportunities to companies with the expertise and capacity to provide technical solutions in the downstream sector. Furthermore, with demand for metals expected to rise over the coming years, Oman is poised to enjoy a wealth of benefits from its metal resources.

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The Report: Oman 2020

Mining chapter from The Report: Oman 2020

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