COMMODITIES

SAUDI SETS THE STAGE FOR MINING SECTOR BOOM

Saudi Arabia has offered close to 5,000 square kilometres (sq km) of mineralised belts for exploration licences, giving mining companies a peek into its mineral riches.

The Ministry of Industry and Mineral Resources (MIM) recently extended the deadline for the pre-qualification questionnaire (PQQ) phase for mineral exploration licenses across Saudi Arabia’s largest mineralised belts, spanning 4,788 sq km. The extension aims to attract more investors and foster competition.

The tendering process includes multiple stages, starting with the PQQ phase, followed by technical submissions, eventually concluding with final proposals. The winners will be announced in January 2025.

Two exploration belts are open: Jabal Sayad (2,892 sq km) with copper, zinc, lead, gold, and silver prospects, and Al-Hajjar (1,896 sq km), which is rich in gold, silver, copper, and zinc. To ensure transparency, detailed geological data is available on the Ta’adeen platform, encouraging participation from local and international companies.

MINERAL WEALTH

The oering showcases the kingdom’s extensive mineral and metal resources valued at SAR 2.5 trillion. Saudi Arabia boasts the largest gold reserves in the Middle East and North Africa (MENA) region, in addition to significant levels of silver and copper.

Recent discoveries, including significant gold reserves along a 100-kilometre stretch in the Mansoura and Masara mines, underscore the vast untapped potential of Saudi Arabia's mineral wealth. These mines have a projected annual production capacity of 250,000 ounces of gold.

Latest data shows the country had invested SAR 682.5 million in exploration incentives by the end of 2023. The commitment was reinforced by the issuance of 152 new industrial licenses by the MIM in January 2024 alone. The licenses include 20 for non-metallic mineral products and 19 for activities related to metal fabrication products, excluding machinery and equipment.

According to a report by the National Industrial and Mining Information Center, the 152 industrial licenses issued since the beginning of 2023 contributed to bringing the country’s total number of factories, both operational and under-construction, to 11,672 by the end of January 2024. These factories represent a combined investment of SAR 1.539 trillion.

SAUDI COMMODITIES

In November, the Saudi Export-Import Bank (Saudi EXIM) signed a USD 300 million credit facility agreement with Glencore, one of the world's largest commodity production and marketing businesses, to give Saudi commodity exporters access to 156 markets worldwide. 

Saudi EXIM will finance Glencore to enhance its purchases of minerals exported from the kingdom, and market them to international buyers with the aim of strengthening the position and expanding the geographic reach of Saudi mineral exports.

The agreement enforces the National Industrial Strategy as the kingdom aims to build its mining industry, which is considered a third pillar of the national industry. It also represents an alignment with global eorts to develop investments in the mining sector.

“Our aim is to cultivate a strong investment environment in this vital area while leveraging the kingdom's extensive mineral resources for export,” according to Eng. Saad Al-Khalb, CEO of Saudi EXIM. “This agreement will facilitate the flow of mining products from Saudi Arabia to international markets, and we believe Glencore's marketing expertise will unlock new investment and commercial opportunities, further strengthening ties between Saudi Arabia and countries worldwide." 

MA’ADEN’S EXPANSION

Meanwhile, Saudi Arabian Mining Company (Ma’aden), the Middle East’s largest multi-commodity metals and mining company, agreed to acquire SABIC’s 20.62% share in Aluminium Bahrain (Alba) in November, as it continues to pursue regional growth opportunities across its business.

The transaction is part of Ma’aden’s continued eort to grow tenfold by 2040, with its aluminium business central to the strategy. Ma’aden and Aluminium Bahrain (Alba) had also recently signed non-binding heads of terms agreement to explore the potential to form a global aluminium powerhouse in the region.

In addition, Ma’aden announced that it will consolidate its aluminium business and has entered into a share purchase and subscription agreement with long-term partner, Alcoa. The agreement will see Alcoa’s share in both Ma’aden Aluminium Company (MAC) and Ma'aden Bauxite and Alumina Company (MBAC) exchanged for shares in Ma’aden.

The company posted record gold production and made progress on several other key commodities in the third quarter of 2024. Overall revenues for the nine-months rose to SAR 22.58 billion, a year-on-year increase of 6%, driven by an increase in production and sales volumes across gold and aluminium, according to a company statement.

The company’s net profit was up 333% to SAR 2.98 billion during the period. The company also advanced its Phosphate 3 Phase 1 expansion, with construction well under way.