Our thinking

Mining

Its hydrocarbon assets have made Algeria one of the world’s top energy producers. The country is a preeminent member of the OPEC cartel and the third-largest provider of gas to Europe.

By looking more closely, we find that Algeria’s riches are not limited to fossil fuels. The country has yet to exploit the full potential of its mining resources, which have been overshadowed by oil and gas since Algeria gained independence in 1962.

Algeria’s geographical and historical proximity to key end-markets, namely Europe, low labor costs and untapped geological potential provide major competitive advantages. This is especially true in the context of the availability and price of energy, countrywide utility networks and transport infrastructure, and government commitment to pursue economic diversification away from the dependence on oil and gas.

In order to reduce its heavy reliance on imports, the nation is working to develop the mining sector and related downstream industries. New long-term strategic and industrial plans, and legal amendments in mining laws now attract international investors and reduce import dependency on raw materials.

Measures to counteract Algeria’s heavy reliance on imports include government efforts to develop the mining sector and related downstream industries via long-term strategic plans, as well as recent legal amendments in mining laws to attract international investors and reduce dependency on foreign materials.

A number of large-scale mining projects are already underway, including growing the fertilizer sector through domestic phosphate rock transformation, revamping industrial metal exploitation (e.g., iron ore mining and transformation), increasing construction material (steel, cement, gypsum and limestone) production capacities and supply exports, and exploring economic exploitation of rare earths and precious metals.

The development of strategic raw material assets could fuel the expansion of high growth sectors, such as agriculture and construction. This is especially relevant now, as falling crude oil prices significantly decrease Algerian GDP.