Saudi Arabia eyes strategic minerals with new mining fund
Saudi Arabia’s state-owned mining giant Ma'aden announced a new joint venture with the kingdom’s sovereign wealth fund, as it goes on the hunt for new mining assets abroad.
Ma'aden will own 51 percent of the venture while the Public Investment Fund (PIF) will own 49 percent. The fund’s initial capital would be $50m, but that number could climb to over $3bn, the companies said, if required.
“This is a significant step for Ma’aden as we develop the mining sector in Saudi Arabia and position the kingdom as a key ally in securing the metals of the future,” Robert Wilt, CEO of Ma’aden, said.
The new fund aims to take equity stakes in existing assets and companies to supply the raw metals the kingdom needs for development, with investments in iron ore, copper, nickel, and lithium. The company plans to make two to three deals this year, he said.
"The global energy transition relies on the strategic minerals needed for renewable energy and battery storage, and our focus on these will give us a foothold in the global commodity value chain,” Wilt added.
Global powers have been scrambling for rare metals that are critical to the production of new technologies like electric vehicles and solar panels.
The British government said on Wednesday it had agreed to deepen its collaboration with Saudi Arabia on diversifying sources of critical minerals.
Announcing a plan Wednesday to deepen cooperation with Saudi Arabia in mining and manufacturing, the UK said the deal allowed it to "ensure critical mineral supply chains are not overly reliant on any one country, with supplies currently dominated by China".
China could serve as a model for Saudi Arabia, as the kingdom looks to deploy its fossil fuel wealth. The Asian country developed its rare earth industry through years of state subsidies, raising alarms in Washington as geopolitical rivalry with Beijing heats up.
The new partnership came as Ma'aden said it would buy a 9.9 percent stake in Ivanhoe Electric, an American minerals exploration and development firm.
Ma’aden said the joint venture will allow it access to Ivanhoe’s proprietary technology, allowing them to conduct special surveys to detect the presence of sulphide minerals containing copper, nickel, gold and silver.
Also on Wednesday, Maaden formed a venture with the Toronto headquartered Barrick Gold Corporation to explore minerals in Jabal Sayid and Umm Ad Damar in western Saudi Arabia.
Saudi Arabia sees mining as a key component of its Vision 2030 strategy to diversify its economy outside of fossil fuels. The kingdom values its mineral wealth at more than $1.3 trillion.
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