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Putting local content at heart of ESG efforts

When Saudi Arabia produced its first barrel of oil in 1951, it was a developing country with just 3 million people.

Mining Journal
Putting local content at heart of ESG efforts

Today, as the Kingdom invests in the creation of a world-class mining and mineral processing sector, it does so as a G20 economy - with the highest economic growth rate in this group in the first nine months of 2022. Its 38 million-strong population is one of the world's youngest, with approximately 50% of Saudi nationals being under 25 years old.
 
The Saudi mining sector will not have the same fiscal impact as oil and gas. However, mining and mineral processing will provide unparalleled employment opportunities for the Kingdom's young and rapidly expanding population.
 
The Kingdom has been investing in local content and skills for several years, both through financial investments in its own education system and by encouraging young Saudis to study and train abroad. These plans are based on benchmarks produced by the International Council on Mining & Metals (ICMM), and for a very deliberate reason. The ICMM developed its principles in conjunction with more than 20 of the world's largest mining companies, and not by bureaucrats far removed from the mine face. Similarly, Saudi Arabia consulted local and foreign mining companies operating within the Kingdom in the development of its own community management plans.
 
In January 2023, at the same time as the Kingdom was hosting the Future Minerals Forum in Riyadh, it announced an agreement with King Fahd University of Petroleum and Minerals in Dhahran to open a department dedicated to teaching mine engineering and geology. The university made it clear during these discussions that it would need a commitment from the local mining sector to employ graduates - otherwise there would be no purpose to creating the department. With this in mind, Ma'aden and other local mining companies agreed to sponsor the department for the first five years.
 
Similarly, the Kingdom is working with the Colorado School of Mines to evaluate the existing geology program at King Abdulaziz University and draw up a plan on how to improve it. Again, the end goal is to pave the way for mining companies operating in the Kingdom to eventually hire more local talent. 
 
Plans are also underway to train young Saudis in the fields of data analysis and data science - skills that are proving to be as important as geology and mine engineering in the mines of the twenty-first century.
 
Looking abroad, the Kingdom has established an international scholarship for Saudi nationals wanting to study mining-related subjects at the Colorado School of Mines, Western Australia's Curtin University or other schools outside of Saudi Arabia. The scholarship is based on a successful eight-year pilot with the Missouri University of Science and Technology in the United States, in which 1,400 Saudi students have participated.
 
Saudi Arabia has also established a scholarship program called Wa'ed that provides fully sponsored training and education in mining or related sectors. This is a big deal for smaller companies that don't necessarily have the resources to fund traineeships on their own.
 
Ultimately, the objective of these programs is to achieve a healthy balance between the number of local and foreign employees in the Saudi mining sector. The state-owned mining company Ma'aden today employs 70% local workers and 30% foreign experts, but smaller companies typically employ around 15-20% local workers and 80% foreign workers. Through investments in education and training, these smaller mining companies will eventually provide new employment opportunities for young Saudis, helping to fulfill the Kingdom's goal of building a mining sector that contributes to economic and social development.

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