Mining in Oman
We speak to Scott Watson, CEO of Kunooz Oman, about the company’s projects, operations, and future plans within the mining industry in Oman
Writer: Marcus Kääpä | Project Manager: Thomas Arnold
The Middle East is home to a mining industry that is evolving and growing into a key producer and supplier of bulk products and metals to pan-continental sectors.
Within Oman, the mining sector is largely divided into two areas: metals and bulk, with the latter including gypsum, limestone, and dolomite.
Oman’s strategic geographic location provides the major benefit of being able to target the rapidly growing economies of India, East and Southeast Asia.
“The bulk mining sector in Oman is substantial,” begins Scott Watson, CEO of Kunooz Oman.
“Government support for the companies that have invested in technical expertise, mining equipment and processing plants is key to the future success of the industry. Kunooz Oman is one such company that is focused on bulk production; with the natural assets being substantial in comparison to the size of the country. In fact, Oman is currently the world’s largest exporter of gypsum - approximately nine megatons (Mt) per year through the Port of Salalah. Kunooz Gypsum exports up to 2.5 Mt per year through Salalah International Gypsum, a trading company established by the producers in 2019, alone answers a market demand stretching from South Africa to as far east as Vietnam and Japan.”
Exploration and issuing of mining licenses is key for the growth of both the bulk and metals mining sectors in Oman. Scott Watson states “The granting of exploration and mining licenses has been a challenge. The government has now merged two ministries to form the Ministry of Energy and Minerals – merging the governing body responsible for oil and gas with the Public Authority for Mining. The industry now awaits new procedures for issuing licences that consider the applicate’s expertise, and financial standing.”
Kunooz was incorporated in January 2014 following the consolidation of five subsidiaries and two associates within the mining, quarrying, logistics and construction materials sectors. Named after the Arabic word for “treasure”, Kunooz refers to the extraction of valuable raw materials from Oman’s earth, and the company’s engagement in the mining of minerals and resources.
Scott Watson has worked for Kunooz Oman in a variety of positions for over five years.
Having started his journey working for Anglo American in 1984 (after graduating from Camborne School of Mines – Exeter University with a BSc Hons Mining Engineering - in the same year), Scott Watson rose through company ranks to the position of Underground/Section Manager in both the gold deep level mining and underground coal mining, totalling nine years with the company.
“I then returned to UK working for Lagan Group in senior operational and commercial management roles in the aggregates, concrete and asphalt, sectors. The highlight being the export of high-quality aggregate into Great Britain and Europe for asphalt wearing coarse applications on heavy trafficked roads such as the M25 around London. My career with Lagan Group covered 15 years of dedicated service and experience. During my time at Lagan Group I was Chairman of the Northern Ireland Institute of Quarrying, sat on the Quarry Products Planning Committee and attained an MBA from the University of Ulster, specialising in strategic planning. This led me into consultancy, lecturing and a desire to utilise my knowledge and skills in overseas ventures.”
“In 2011, I took the opportunity to work for Lagan Asphalt (a Lagan Group company) as Project Manager,” he says. “Here, I oversaw the company planning, establishment, build-up, plant erection and operations on the A2 Motorway Project in Poland in the lead up to the Euro 2012 Football Championships.”
On completion of the project in Poland he gained a further opportunity as Country Manager Norway, for Aggregate Industries UK (part of the Holcim Group) where his position took him across multiple countries including Russia, Latvia, Estonia, Norway, Denmark, Germany, and the UK. Here, Scott Watson supplied aggregates to Northern Europe and the Baltic States and pipe bedding rocks for the offshore oil industry from the company’s coastal super quarry north of Bergen, and their quarry at Repparfjord in the very north of Norway.
It was 2016 that saw Scott Watson accept the position of General Manager of Kunooz Gypsum (a subsidiary of Kunooz Oman), where he oversaw the operations, marketing and sales of Gypsum Aggregate on a Global Stage. Applying his lengthy industry knowledge and experience in both mining and logistics, Scott Watson was promoted to Group COO in May 2018, and Group CEO in December 2018, the latter position he holds to this day.
Operations and projects
Kunooz Oman is focused on operational excellence in every aspect of its business, enhanced by excellent communication between all levels of the company to maximise efficiency and effective decision-making.
Kunooz Gypsum sets the mining standard within the business, being a world leading gypsum aggregate producer. Kunooz Gypsum obtained its first mining area in 2007 and the groundwork commenced in May 2010. The mining operations started from October of the same year with the first shipment delivered in January 2011. The operation has expanded exponentially since then, acquiring three more mining areas and the installation of a 2.5 Mt Capacity Crushing Plant, whilst acquiring a fleet of Komatsu and Volvo excavators, dumpers and loading shovels coupled with an effective rebuild and replacement plan.
Quality control in the mining process is key to meeting customers’ requirements, as Scott Watson elaborates.
“The mining operation is open cast to a final depth of 50 metres, extracting lateral layers of gypsum interbedded with layers of dolomite, necessitating segregation of the gypsum and dolomite, to deliver gypsum at a purity level more than 90 percent. In total, the operation moves 4 Mt per year of gypsum and dolomite. For every Mt of gypsum 0.8 Mt of dolomite is extracted. Unfortunately, the dolomite is of poor quality and has no commercial value.
Therefore, utilised for restoration.”
From 2016, Kunooz Gypsum extended its marketing reach beyond its then primary market India, and now has a broad customer base reaching and servicing markets from South Africa, East Africa, UAE, India, Bangladesh, Indonesia, Philippines, New Zealand, and Japan.
On top of this, Kunooz Oman is focused on adding value to its Kunooz Gypsum business in Salalah, through the manufacture of gypsum board and gypsum powder. This project is progressing, having concluded pre and full feasibility studies, identifying the benefit of siting a Gypsum Board Factory in the Salalah Free Zone.
Kunooz Oman is complemented by Mineral Development Oman (MDO), a 20 percent shareholder in Kunooz Oman. MDO is the new flagship of Oman’s mining industry and founded primarily to develop and open the Omani mining sector by investing directly in new projects.
The high standards and professionalism set by Kunooz Oman echoes throughout the company’s project portfolio.
One such example can be seen in Kunooz’s Dolomite Project, as Scott Watson elaborates.
“The company have completed a full Joint Ore Reserves Committee (JORC) exploration feasibility study of a substantial high-quality resource in Oman with a typical magnesium oxide (MgO) content of 21.5 percent and a maximum of 0.4 percent silica. The primary market is the supply of dolomite aggregates for steel manufacture, coupled with phasing in value added products such as dololime, float glass, and magnesium metal,” he explains.
“Kunooz is currently refining and finalising a detailed mining, logistics, sales, and CAPEX plan.”
Kunooz Oman is also in process of setting up a full exploration study of a basalt fibre deposit, which will enhance the business’s mining and value-added portfolio.
Kunooz Oman is not only focused on mining but also realises the need to evolve the logistics business to the next level. In this regard the company has completed a full feasibility study on developing the cold storage business in Muscat, levelling, site establishment, and concluding design.
Scott Watson elaborates “The company’s Cold Storage Warehousing Project is aimed at complementing the existing Kunooz Logistics business, enabling the company to transform from bulk transport to fully developed logistics.”
People and community
Within the mining sector logistics is vital to the fluidity and efficiency of operations across the board. For Kunooz Oman, the supply chain plays a critical and vital role, as Scott Watson comments.
“We prioritise our suppliers and partnering with key businesses is of the upmost strategic importance to Kunooz Oman. We focus on getting the best value through our well-established procurement department, satisfying the requirements of management and the respective businesses,” he elaborates.
“The company cannot rely on just-in-time delivery for key critical parts, particularly in mining and processing. The supply chain in many regards is long, with many suppliers holding minimal stock levels in the UAE and not Oman. Therefore, excellence in maintenance planning is a prerequisite, requiring Kunooz to ensure critical stock is in place backed up with consignment stock, held in Oman. We have a consignment stock agreement with our key OEM crusher parts supplier.”
“Key to the budget process is the management’s review of the maintenance and rebuild CAPEX programme, ensuring effective scheduling, placing of orders and control of cash flow. Effectively predicting when key maintenance milestones occur enables Kunooz to ensure plant availability is maintained at levels plus 90 percent for all ages of equipment.”
As reinforced by Scott Watson’s commentary, the most important element to Kunooz Oman is people and the commitment, combined with hard work and loyalty they hold. The employees working in the company’s operations are what makes Kunooz Oman what they are. It is important they receive management support to deliver the business goals, with site management and site employees spearheading Kunooz’s frontline. In this regard, employee safety and welfare is paramount to the company’s culture.
“You have to value your employees,” Scott Watson affirms. “When employees feel valued then they are naturally motivated and committed, thus enabling operations to work like a well-oiled machine, backed up with strong leadership from senior and executive management.”
For Scott Watson, Kunooz is a very employee centric company that rewards hard work and service, and importantly allows workers to improve upon any shortcomings through discussion, training, and collaboration.
“We have an experienced senior management team that lead and oversee company activities, reinforcing Kunooz’s core values inclusive of continuous improvement and teamwork,” he says. “Here in Oman, we have a very multi-cultural expat community complemented by the Omani citizens and so must understand and respect each other’s culture and adhere to the needs and requirements of every one of our employees. Omani employees play a very important role and are being encouraged and trained to step into roles previously filled by expats. This is a policy of the Oman government, and one Kunooz Oman supports through training both formally and on the job.”
With 2021 business activity picking up and still at the head of a new decade, Kunooz Oman has many plans for the future.
“Kunooz is aiming to expand its profile through reaching out to work with various potential partners,” Scott Watson informs us. “We are focused on growing our mining business and developing additional value-added streams, in gypsum and dolomite coupled with the basalt fibre and cold storage warehousing projects, the future is exciting for Kunooz Oman.”