COMMODITIES

FRESH OPTIMISM IN SAUDI MINING AMID RARE EARTH DEALS

The Saudi Arabian Mining Company (Maaden) unveiled the 100% acquisition of Maaden Aluminium Company (MAC) and Maaden Bauxite and Alumina Company (MBAC), which were previously co-owned with Alcoa Corporation entities.

The strategic move will be executed through a capital increase from SAR 38.03 billion to SAR 38.89 billion, by issuing 85,977,547 new ordinary shares, representing an equity increase of 2.26%. These shares – referred to as “consideration shares” – will be allocated to Alcoa Saudi and AWA Saudi, in exchange for their respective 25.1% stakes in MAC and MBAC.

In addition to the share issuance, Maaden will make a cash payment of SAR 562.5 million to AWA Saudi. The acquisition will make Maaden the sole owner of MAC and MBAC, both key players in the regional aluminium value chain. MAC, with a capital of SAR 6.57 billion, and MBAC, capitalised at SAR 5.1 billion, will be fully integrated under Maaden's operational control.

“This acquisition marks a significant step forward in our strategy to strengthen Maaden’s position in the aluminium sector and Saudi Arabia’s broader mining ecosystem,” said Maaden’s CEO Robert Wilt. “Full ownership of MAC and MBAC enhances our operational eciency and opens new avenues for value creation.”

Following the capital increase, the ownership of Maaden’s existing shareholders will adjust slightly, with the Public Investment Fund (PIF) remaining the majority shareholder at 63.78%, while Alcoa Saudi and AWA Saudi will hold 1.74% and 0.47% respectively. 

The move is aligned with Maaden’s long-term strategy to enhance its vertical integration, support Vision 2030’s goal of economic diversification, and transform the kingdom’s mining sector into a global leader. 

RARE EARTH EXPLORATION

Maaden is also making forays into rare earth minerals, which are crucial in an array of products including smart chips, renewable energy, industries, and defence. 

The company signed in May a deal with MP Materials Corp, a US-based fully integrated rare earth producer, to explore opportunities to establish an end-to-end rare earth supply chain.

The agreement combines world-class exploration and processing expertise to advance and de-risk the development of potential rare earth element (REE) deposits across Saudi Arabia as it continues to position itself as a world-leading player in the critical minerals sector.

Maadan and MP Materials aim to explore opportunities to jointly develop a vertically integrated rare earth supply chain in the kingdom, including mining, separation, refining, and magnet production, to drive industrial depth and create value for downstream sectors.

Leveraging Saudi Arabia’s competitive energy base, world-class infrastructure, and strategic location, this collaboration will diversify and expand the global rare earth supply chain, supporting rising demand from fast-growing industries. 

NEW EXPLORATION LICENCES

Earlier this year, the Ministry of Industry and Mineral Resources awarded exploration licences to several local and international companies for the first-of-their-kind mineralised belts at the Jabal Sayid and Al-Hajjar sites, covering an area of 4,788 square kilometres (sq km). The initiative is part of the ministry's plan to accelerate the exploration and utilisation of the kingdom's mineral resources – estimated at SAR 9.3 trillion – and to strengthen the mining sector as a key pillar of national economy in line with Saudi Vision 2030. 

The Ministry of Industry and Mineral Resources, in collaboration with the Ministry of Investment, launched the second phase of the "Mining Exploration Enablement" programme to support exploration activities and reduce risks for exploration companies in their early stages.

Moreover, the kingdom offers various incentives under the Mining Investment Law, including allowing 100% foreign ownership of companies, and providing financing of up to 75% of capital costs through the Saudi Industrial Development Fund (SIDF).

This is part of the ministry’s plan to attract investment by offering 50,000 sq km of mineralised belts containing gold, copper, and zinc. In January, as many as 126 agreements and memoranda of understanding (MoU) were signed with a total value of SAR 107 billion, during the fourth annual Future Minerals Forum in Riyadh.

The deals aim to enhance exploration, mining, financing, research and development, innovation, sustainability, value added supply chains, and minerals industries. The agreements also include one between the Royal Commission for Jubail and Yanbu (RCJY) and steelmaker Tosyali Holding to cooperate in establishing an integrated flat steel production plant in Ras Al-Khair Industrial City. The RCJY also signed an MoU with Vedanta Limited to establish a copper smelter and refinery with a production capacity of 400,000 tonnes annually, alongside a copper rod plant with an annual capacity of 300,000 tonnes also in Ras Al-Khair.