Riyadh – Saudi Arabian Mining Company (Ma’aden) signed joint venture (JV) agreements with the Saudi Public Investment Fund (PIF) and several firms within the Kingdom and worldwide earlier in January, according to bourse disclosures.

Partnership with PIF to Invest in Mining Assets Worldwide

Ma’aden and the PIF will establish a new company at an initial paid-up capital of SAR 187.50 million, in which they will hold 51% and 49% stakes, respectively.

The Riyadh-based mining company announced SAR 95.62 million investment from its own resources, noting that it had reached an agreement with the PIF in case additional financing was needed for the project.

In this regard, the two parties will endorse the new entity with up to SAR 11.95 billion through other transactions, such as capital increases. Accordingly, the Tadawul-listed firm’s contribution will reach a maximum amount of SAR 6.09 billion, unless another development occurred.

Meanwhile, the new firm aims to invest in mining assets globally in order to secure strategic minerals. It will pump investments in the iron ore, copper, nickel, and lithium sectors for being a non-operating partner with minority equity positions.

Furthermore, this step will guarantee supply security for domestic minerals downstream sectors, making Saudi Arabia a key partner in global supply chain resilience.

Ma’aden elaborated that the partnership will reflect positively on its overall financial results in the long term, adding that it will disclose any further details about the project at a later time.

Bilateral Exploration Works with Barrick

The Saudi-listed company inked two JV contracts with Barrick Gold (T7) Limited and Barrick Gold (Singapore) Pte Limited, affiliates of Canada-based Barrick Gold Corporation.

Ma’aden and Barrick Gold (T7) will form a limited liability company to accelerate the exploration work in Umm Ad Damar, with a primary investment of $7.60 million (SAR 28.50 million) from the Saudi firm’s resources.

In addition, Ma’aden will team up with Barrick Gold Pte to build another limited liability entity in order to boost the exploration activities in the south of Jabal Sayid.

The two new firms will be headquartered in Saudi Arabia, with equal ownership between Ma’aden and Barrick.

Project worth SAR 1bn in WAS, RAK Industrial Cities

Ma’aden penned an agreement worth SAR 1.04 billion ($278 million) with WorleyParsons Arabia Limited and JESA International S.A. to develop an integrated production facility in Wa’ad Al Shamal (WAS) and Ras Al Khair (RAK) industrial cities.

WorleyParsons and JESA will secure the engineering, procurement, and construction management services required to implement phase 1 of the phosphate 3 scheme, which will have an annual production capacity of 1.50 megatonne (MT) of phosphate fertilisers.

Ma’aden highlighted that the financial impact of the joint project will be determined after completing the construction works and the plant commences production.

Potential Stake Acquisition in US-based IE

Ma’aden sealed a deal with Ivanhoe Electric Inc. (IE), a US-based tech firm listed on the Toronto Stock Exchange and New York Stock Exchange (NYSE).

Under the heads of terms agreement, Ma’aden plans to acquire 9.90% equity interest in IE by purchasing 10.20 million shares for nearly SAR 474 million ($126.40 million) at a price of SAR 46.43 ($12.38) per share.

The Saudi company pointed out that the transaction, which will be self-funded, is expected to be concluded by the end of the first quarter (Q1) of 2023.

Ma’aden underlined that the bargain is projected to reflect positively on its income statements over the long term, adding that further announcements will be made in due time.

IE will use the proceeds of the acquisition process to bolster its working capital, buy Typhoon units, and explore lands provided by Ma'aden for metallic minerals across the Kingdom.

Additionally, Ma'aden and IE will join forces to create a Saudi JV company to explore and develop mining projects across the Gulf nation. The new entity will be equally owned by the two parties.

The JV will help the Tadawul-listed firm access the Typhoon technology that carries out geophysical surveys by deploying high-powered transmitters to detect sulfide minerals containing copper, nickel, gold, and silver. Ma'aden mentioned that this can speed and de-risk its exploration process.

In the first nine months (9M) of 2022, the net profits after Zakat and tax of Ma’aden hiked by 164.62% to SAR 8.30 billion, compared to SAR 3.13 billion in 9M-21.

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