Saudi Arabia’s Ma’aden company, the country’s largest gold miner which has produced over 4 million ounces of gold since 1988, primarily from its Mahd Ad Dahab underground mining operation, has just awarded a Korean company, Hanwha Engineering and Construction, the contract to design and build a gravity-CIL gold process plant for its developing Ad Duwayhi gold mine located in the remote Central Arabian Gold Region (CAGR) of the arid country.  The contract is worth just over 1 billion Saudi riyals (about US$271 million).

Ma’aden is a diversified mining and minerals company set up by Saudi Royal decree in 1997 to facilitate the development of Saudi Arabia’s mineral resources and was originally wholly owned by the Saudi Government before 50% of its shares were floated on the Saudi Stock Exchange (Tadawul) in 2008.

Initially, Ma’aden’s activities focused on expanding its active gold business which now includes five mines and over 11 million ounces of JORC compliant gold resources at operational and exploration sites.

The company has also developed its activities beyond gold with the development of Ma’aden Phosphate Company, which started production in 2011, its aluminium project which is currently under construction and a number of other projects. Ma’aden’s exploration teams are working to expand available resources in existing business areas as well as to broaden the company’s mineral portfolio.

The company’s gold and base metals business is carried out through Ma’aden Gold and Base Metals Company (MGBM), a wholly owned subsidiary of Ma’aden.

Ad Duwayhi will be Ma’aden’s first gold mine in the Highly prospective CAGR where it has actively been exploring for some time.  Development of the CAGR has been challenging due to its remote location combined with limited availability of water to treat the ore. A new 500 km pipeline is being developed to bring treated wastewater from the municipality of Taif to the site of the planned gold mines. This innovative and environmentally sustainable solution is the first instance of the large scale use of treated waste water for industrial purposes in the Kingdom.

The project is located approximately 450 km SW of Riyadh, 450 km E/NE of Jeddah and 125 km SE of the town of Zalim. The prospect covers approximately 1 km2 and consists in plan of a circular, sand wash-covered area partially surrounded by a number of hills rising some 50 m above the central basin floor between 950 and 970 m above sea level.  It will comprise an open pit gold mine and milling operations to produce a metal concentrate on site that will then be transported to Jeddah.

Engr. Khalid Al Mudaifer, Ma’aden President and CEO reiterated that this contract includes completing detailed engineering, procurement, construction, pre-commissioning, commissioning, start-up assistance and training services.

The Ad Duwayhi Gold Mine facility is a key part of Ma’aden’s programme to develop several new gold mine facilities in the central western region of Saudi Arabia which is reckoned to contain much of the Kingdom’s gold rich ore deposits.

“The plant will process approximately 2 million tons of ore per annum from the adjacent open pit mine, and is scheduled for completion by the end of 2014. It is estimated that Ad Duwayhi will produce approximately 180,000 ounces of gold a year, and more than 1.6 million ounces over the life of the mine,” Al Mudaifer said, which makes it a substantial gold mining operation for the region.

The project will help create approximately 144 direct jobs, 200 indirect jobs in the surrounding area, and an estimated 600 jobs with contractors and service suppliers. In addition, Ma’aden will contribute to regional sustainability and enhance education quality by providing mining training courses in cooperation with Missouri University of Science and Technology and TVTC.

“The signing of this contract represents an important early milestone in our programme to expand development of Saudi Arabia’s gold ore deposits, and this project will make a substantial contribution to Ma’aden’s overall gold production capacity” said Al-Mudaifer.