How did the Middle East become so important to industrial minerals?

By Siobhan Lismore-Scott
Published: Wednesday, 31 December 2014

As well as importing more minerals into the region, countries in the Middle East also started to concentrate on developing their own minerals industry, here, Siobhan Lismore-Scott details why this has happened and where.

Until relatively recently, commodity trade and interest in the Middle East focused on the demand for crude oil. As an oil-rich region, this meant there was a need for industrial minerals used in drilling muds, as well as those used in construction to support the infrastructure that sprung up in tandem with the development of oil industry.

However, the boom years of the 1990s, which saw cities being constructed to rival – and surpass – those seen in the western world, meant that a need for refractory minerals peaked on the back of growing steel demand. 

The region also saw an increase in demand for glass minerals such as soda ash, borates and silica sand, as well as those associated with a growing middle class and infrastructure, such as fluorspar, rare earths, graphite and of course minerals sands used to produce titanium dioxide (TiO2).

As well as importing more minerals into the region, countries in the Middle East also started to concentrate on developing their own minerals industry. Efforts have varied depending on the country, but there has been a notable push to build robust oilfield mineral production, in order to establish some supply security. 

Both Algeria and Saudi Arabia are leading the pack in the region for shale gas development. In January this year, Halliburton opened a new R&D centre in Saudi Arabia, specifically to look at developing unconventional resources — the latest in a line of similar R&D hubs in the region, established by oilfield services companies, Baker Hughes and Schlumberger.

The region is also investing in the TiO2 industry and fertiliser market, with high-level projects planned in different countries, with accompanying infrastructure and logistics (see pp28-29).

Gypsum strides ahead

There is also a developed gypsum and cement industry in the region, as well as lime and sulphur production.

Gypsum produced in the Middle East is largely consumed domsetically, in order to fulfil growing demand for plasterboard and cement. The intense heat of the region means that cement buildings are often preferred over the glass, iron and steel structures usually favoured in new cities.  

Iran is one of the leading gypsum producers in the region, and produces 10% of global output, making it one of the largest producers after the US. 

Gypsum is found on surface in the country and measured reserves are around 3bn tonnes, although total indicated reserves are around 24bn tonnes. Around 200 quarries are in operation, according to the Ministry of Industry and Mines. However, most of these quarries are described as being small and serve only to feed local plaster producers.

Oman’s gypsum industry, meanwhile, is growing, driven by demand in India, which
has seen unprecedented growth in construction. India has so far relied on synthetic gypsum to fulfil its high demand, derived from flue gas desulphurisation (FGD), but political leaders have indicated their willingness to establish a more secure – and low cost – supply source.

Oman is pleased to rise to this need and has invested in expanding its limestone and gypsum export facilities. The Port of Salalah told IM in early 2014 that it expected general cargo growth to continue into 2015, highlighting positive indicators for dry bulk in particular.

Value added products

Unsurprisingly, the emirate of Dubai has seen the most growth in its minerals industry. Although it has little mineral wealth of its own, there has been vast investment in the industries which convert the raw materials into higher end products. 

To this end, global pigments producer AkzoNobel started operations at a powder coatings plant in Dubai to target "growing regional demand for decorative powder coatings".

The company also acquired a 50% stake in an Omani paints company, Sadolin Paints Oman.

The growth expected in TiO2 is demonstrated by the construction of a 500,000 tpa titanium slag operation in Saudi Arabia, by leading TiO2 producer Cristal Global.

Its ilmenite smelter, in Jazan Economic City, is expected to be in production in early 2015.

Other companies have also invested in the company’s future. In December, Saudi Arabia’s National Industrialization Co. (Tasnee) purchased a 13% stake in Cristal Global, for $428m, bringing its total stake in the company to 79%.

Elsewhere, Saudi Arabia has made no secret of the fact it wishes to develop its vast sand resources and has sought to engage downstream industries interested in developing its reserves for hydraulic fracturing (fracking).

It has also announced a massive $1.8bn investment into a minerals hub in the west coast industrial city of Yanbu.

"The intention is to have a minerals distribution hub that can serve the whole region," Alaa Nassif, executive president, Royal Commission at Yanbu, told reporters in April 2014.

The Yanbu industrial park is also growing and developing other industries besides hydrocarbons which will need industrial minerals. Parts of the park have been set
aside for solar panel manufacturing, as the country looks to diversify away from only exporting oil.

Making solar panels involves a number of industrial minerals, including quartz and silica sand, and Saudi Arabia’s imports of these materials have soared as a result. It imported around 38,000 tonnes quartz in 2012, up 18 fold compared with the previous four years.

In Qatar, the country’s preparations to hold the FIFA World Cup in 2022 is likely to cause a spike in local demand for construction and pigment minerals as it builds the stadiums, hotels and associated infrastructure for the tournament.