UAE economy most diversified of all oil-based nations, UN environment chief says

Masdar City, a special economic zone that will eventually be home to companies and researchers from around the world to develop solar and other clean energies outside Abu Dhabi. (AFP)
Updated 07 March 2018
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UAE economy most diversified of all oil-based nations, UN environment chief says

The big challenge for the United Arab Emirates and the region is the transformation from an oil-based economy to one that is more broad-based, and according to the UN environment head, the UAE has achieved more than others.
“The Emirates is an amazing success story in terms of development,” UN Environment Executive Director, Erik Solheim told Arab News.
“It’s true that they have led to high emissions and environmental problems – as everywhere else undergoing development - however I am confident the government is now attacking this in a very determined way,” Solheim said.
The UAE has taken strides forward on climate change mitigation in recent years that are reflected by the establishment of the federal ministry of climate change and its commitment to the ratification of the Paris Agreement in 2015, which pledged not to just keep the increase in temperatures below 2C, but also to pursue efforts to limit it to 1.5C by 2018.
 

UN Environment Executive Director Erik Solheim, March 1, 2018, Dubai. (Photo: AN/ Rua'a Alameri)

During the Clean Air Forum held in Abu Dhabi last December it was announced that the majority of emissions being produced in the UAE could be traced back to the country’s energy sector, making up 74 percent of released emissions.
One of the contributing factors is the population growth and surge in income levels due to the economic boom the UAE witnessed in the past four decades, UAE Minister of Climate Change and Environment Thani bin Ahmed Al-Zeyoudi said last month. This led to a rise in non-sustainable production and consumption patterns, he said.
“The UAE has brought affluence to people at a high speed, so it means the challenge is big, but it has proved that it is a nation capable of adapting,” Solheim said.
In response, the UAE has put in place initiatives in order to control the effects of climate change, which include controlling emissions, reducing flaring of natural gas and increasing energy efficiency.
Solheim explained that for the region the main issue to focus on is shifting from a fossil fuel-based economy and secondly to introduce further the use of solar, wind and other renewable energies. This will have the benefit of both reducing pollution and climate change, he said.
In October 2017, Dubai Electricity and Water Authority (DEWA) launched a new project, as part of the Shams Dubai initiative, to install solar carports at their headquarters and at the Ministry of Climate Change and Environment buildings. The project aims to generate electricity using solar panels connected to DEWA’s network and is expected to reduce around 1,500 tonnes of carbon emissions annually to meet the goal set by the Dubai Supreme Council of Energy to cut 20 percent of the energy consumption in all government buildings, by 2020.
Plans were also announced last year for the world’s largest concentrated solar power project to be implemented in Dubai. The largest single-site project will generate 700 megawatts of power when completed, state news agency WAM reported.
Depending on average sunshine, it is estimated that one megawatt can power 164 homes.
It will also include the world’s tallest solar tower, standing 260 metres tall at Mohammed bin Rashid Al Maktoum Solar Park.
“The good news is that the price of solar and wind energy has fallen much more than the oil prices,” Solheim said, explaining that while in the past solar energy was less competitive but more environmentally friendly, it is now both better for the environment and in general terms the same or even lower priced than fossil fuel.
High costs had previously been a major obstacle prohibiting growth for the solar sector but prices have fallen. Solar PV modules are more than 80 percent cheaper than in 2009, and the cost of electricity from solar PV fell by almost three-quarters in 2010-2017 and continues to decline, according to the Abu Dhabi-based International Renewable Energy Agency, (Irena).
“That’s why you see solar and wind energy taking off in a completely new way,” Solheim said.  
“Al-Futtaim also have big ambitions going into this…And when others follow, the price will continue to fall,” he said, referring to Al-Futtaim Group, the largest conglomerate operating in the UAE.
The UN environment head met to sign a memorandum of understanding (MoU) with Majid Al Futtaim on sustainable construction during his visit to the UAE on Thursday.
Al Futtaim group partnered with the United Nations Environment Programme to get advice on the best practice for sustainable development that is environmentally friendly.
“Construction is one of the main sectors for both climate emissions and other areas,” Solheim said. Other areas that construction affects include the mining processes used to source materials, the transportation of these materials to the building site, the construction process itself and the waste removal and disposal process that follows the completion of the project.
The UAE’s infrastructure is currently the most advanced in the GCC region with well-integrated transport systems and assembly of iconic structure, according to a report by Research and Markets titled UAE Construction Industry Outlook to 2020.

However, it is a sector of concern. Tall buildings in the UAE consume huge amounts of water and electricity to cope with overheating under the country’s weather conditions, and as such have become significant sources of major greenhouse gas emissions.
The UN Environment Programme reports that the building sector accounts for 30 to 40 percent of global energy use. However, in Abu Dhabi, buildings consume approximately 50 to 60 percent of electricity generated.
However, Solheim states that the UAE has a “lead role to play because it’s the most modern place in the West Asia.”
He explained that both the public and private sector must work together to insure a greener future to “make society better for humans and future generations.”


How mining can transform Saudi Arabia’s economy

Updated 07 March 2026
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How mining can transform Saudi Arabia’s economy

  • Kingdom’s mineral wealth valued at $2.5tn, positioning mining as a third pillar of the national economy

RIYADH: Saudi Arabia is accelerating its push into mining as part of its economic transformation under Vision 2030, amid the growing importance of critical minerals and rare earths.

The Kingdom’s mineral wealth is valued at $2.5 trillion, positioning mining as a third pillar of the national economy alongside hydrocarbons.

The mining industry could give Saudi Arabia an edge in transition minerals and supply chains by expanding extraction, processing and the logistics needed to move materials to market, according to economists and industry specialists.

Saudi Arabia is home to more than 45 identified minerals, including gold, copper and uranium, according to the Vision 2030 strategy.

Momentum has been supported by measures aimed at making mining easier to invest in and faster to scale, including updated regulations, digital licensing platforms, specialized mining services, and new transport and rail links to mining areas.

Vision 2030 aims to raise mining’s contribution to gross domestic product to SR240 billion ($63 billion) by 2030, create 200,000 direct and indirect jobs, and attract $27 billion in new investment, according to published government targets.

Signs of progress are starting to show in the mining sector in terms of exploration activity, licensing and new discoveries.

“The mining strategy shows it’s working very well, evidenced by the rapid rise in exploration and industrial licenses, and major new mineral discoveries,” Talat Hafiz, an economist and financial analyst, told Arab News.

Saudi Arabia is undertaking the world’s largest geological survey, covering about 700,000 sq. km of the Arabian Shield for $1.5 billion, he said. 

The number of mining licenses issued exceeds 2,000, according to official data, and the Kingdom’s mineral wealth is valued at 90 percent higher than it was in 2016 when Vision 2030 was rolled out.

A key milestone highlighted in Vision 2030’s mining strategy was the introduction of a new mining investment law, which reduced the tax rate to 20 percent from 45 percent to spur investment and align the sector with global standards.

The Kingdom’s mining resources position it well to be a critical supplier of raw materials that are integral to energy transition as clean-energy technologies require large volumes of mined materials.

Copper is central to electrification and power networks, while battery supply chains rely on minerals such as nickel and lithium. Phosphate is a key industrial input with wider economic value.

Reliable supplies of metals and minerals used in power grids, batteries and electric vehicles can attract investment and support downstream industry in the Kingdom.

Saudi Arabia’s Jabal Sayid site, northeast of Jeddah, ranks among the world’s top four resources for rare earth elements, Khalid Al-Mudaifer, vice minister of industry and mineral resources for mining affairs, recently told Al Eqtisadiah.

It will help meet Saudi Arabia’s needs for minerals used in magnet manufacturing, EVs and wind energy, while also supporting global supply, including the US market, he said.

Mining can also catalyze investment in the Kingdom, widen supply-chain employment, and boost non-oil exports and private-sector growth, according to economists and policymakers.

Mines, processing plants and the infrastructure around them require large upfront capital spending, creating a pipeline of work across construction, equipment, utilities and logistics. 

The mining industry could give Saudi Arabia an edge in transition minerals and supply chains by expanding extraction, processing and the logistics needed to move materials to market. (Shutterstock)

“When a mining sector scales, the economic footprint extends well beyond extraction,” said Turki Al-Nahari, vice president of global mining at Ecolab, told Arab News. “Growth typically occurs across engineering services, industrial water management, logistics, laboratory testing, equipment reliability, environmental services and digital performance systems.

“That shift creates demand for skilled engineers, technicians, data analysts and operational specialists,” he added.

In 2025, Saudi Arabia’s mining exploration budget increased 600 percent to $146 million from $21 million in 2022.

“This growth is driven by ongoing geological surveys, technological advancements and higher exploitation budgets, all of which signal stability and opportunity, attracting foreign investment,” Manraj Lamba, a mining economics analyst at S&P Global, said in a recent report.

Mining projects are easier to finance when the size and quality of the deposit are clear, costs are competitive, and rules and taxes are stable, Abdullah Al-Harbi, an economist familiar with the industry, told Arab News.

Investors want solid feasibility work, credible timelines and evidence a project can stay profitable through swings in commodity prices, Al-Harbi said.

Saudi Arabia’s pipeline includes 24 exploration-stage projects and 17 more advanced developments, according to S&P Global.

“Its proactive approach to geological surveys and resource assessment has uncovered significant potential across gold, copper, phosphate and bauxite,” Lamba said.

Large projects also tend to generate employment across a wider industrial supply chain, including contractors, maintenance, laboratories, transport and a range of operational services.

To boost employment and support hiring and training, Saudi Arabia has moved to standardize job roles and skills for the mining industry. 

HIGHLIGHT

Vision 2030 aims to raise mining’s contribution to gross domestic product to SR240 billion ($63 billion) by 2030, create 200,000 direct and indirect jobs, and attract $27 billion in new investment.

The Kingdom rolled out a framework related to employment and skills in the mining industry in January at the Global Labor Market Conference.

The framework is “a tool which ensures clear definitions of occupations and their required skills,” the Kingdom’s Minister of Industry and Mineral Resources Bandar Al-Khorayef said. It will cover more than 500 job roles, detail the necessary skills, responsibilities and titles, he added.

Exports from the sector are already rising in tandem with investments to develop the industry and create jobs.

Saudi Arabia exported 5.7 million tonnes of phosphate fertilizer in 2024, up about 6 percent from 2023, according to a GASTAT report.

As the energy transition accelerates, Saudi Arabia’s advantage may be strongest beyond extraction alone.

“Saudi Arabia’s most realistic advantage in the accelerating energy transition lies in combining selective mining with strong processing and refining capabilities, supported by its emerging role as a logistics and supply-chain hub,” Hafiz said.

The Kingdom’s position between Africa, Europe, and Asia favors downstream processing and value-added industries, he added.

“Saudi Arabia is prioritizing minerals that are both financeable and strategically aligned with emerging industries such as electric vehicles and clean energy technologies, where markets are clear, and demand is scalable,” Hafiz said.

Aluminum, phosphate, and similar commodities remain a key focus to support local manufacturing, infrastructure development and downstream industries while strengthening export capacity, he said.

“Once construction concludes, the priority shifts to operational stability and performance optimization,” Al-Nahari said.

“Small efficiency gains, applied consistently across large-scale operations, compound materially over time,” influencing cost as well as uptime and competitiveness over the life of a mine, he added.

As the global race toward electrification and decarbonization accelerates, the Kingdom is effectively positioning itself beyond its oil legacy with its strategic commitment to the minerals sector, which will play a critical role in powering the future.

Its investment in exploration, infrastructure, and downstream processing anchor it as a pivotal supplier in the critical minerals and rare earths value chain in the era of energy transition.