Saudi Arabia Seeks to Lure Global Miners in Bid to Overhaul Its Economy
RIYADH, Saudi Arabia—Saudi officials are wooing top mining companies to help exploit untapped mineral deposits in the kingdom that could be worth hundreds of billions of dollars, as the world’s biggest exporter of oil accelerates plans to build new industries away from hydrocarbons.
The fourth-largest net importer of minerals globally has a small domestic mining industry despite unverified estimates putting its mineral wealth at over $1.3 trillion, including deposits of copper, zinc, phosphates, uranium and gold. The results of a new survey are expected by 2027.
Industry leaders, including senior executives from
Rio Tinto
PLC,
BHP Group Ltd.
and
Barrick Gold Corp.
, addressed a conference in Riyadh this week with discussions focused largely on expanding access to critical minerals to meet surging demand for metals needed for the clean energy transition.
Saudi officials positioned the kingdom as critical to the solution. With more than 7,000 attendees from over 100 countries, the conference attracted global interest even as the government continues to struggle to get foreigners to invest.
“Across the board, I think, Saudi Arabia is well-positioned, has a competitive offering to play not only in extraction, processing and refining but also further downstream into manufacturing,” Prince Sultan Khalid Al Saud, chief executive of the Saudi Industrial Development Fund, said on Thursday.
Saudi Arabia’s unlikely push to become a significant player in the $2 trillion global mining industry is part of an ambitious agenda launched seven years ago by de facto Saudi leader Crown Prince
Mohammed bin Salman.
Dubbed Vision 2030, it aims to build new industries unrelated to oil in large part by improving the country’s business climate. Launched in 2016, those plans are now at their halfway point.
The easing of strict social norms in recent years has led to new tourism and entertainment industries, but Saudi officials say they see mining as the third pillar of the kingdom’s economy after hydrocarbons and petrochemicals. The government revised its mining investment law in 2021 after extensive consultations with industry participants. It issued three exploration licenses in 2022, with five more expected this year.
Barrick Gold signed two new joint ventures this week with state-owned mining company Ma’aden to explore for copper in western Saudi Arabia. That partnership came together after another site operated by the Canadian miner faced regulatory obstacles a decade ago; it currently produces some 152 million pounds of copper annually.
President and Chief Executive
Mark Bristow
said Barrick is interested in hunting for gold and copper assets in the kingdom. “Conceptually, there’s enormous potential in this country, and it’s certainly supported by the fact that there are a handful of very profitable mines,” he said. “To elaborate on that is what it’s all about really.”
Khalid al-Mudaifer,
vice minister for mining, said the kingdom had passed an important inflection point in its strategic planning for the industry and is confident that the new survey will turn up even more deposits.
“Mining was not an important thing for us. Oil and gas was good enough for development. Why bother with mining?” he said in an interview. Now, “we have put Saudi Arabia on the map.”
One of the targeted minerals is uranium for use in civilian nuclear power. Saudi Energy Minister Prince
Abdulaziz bin Salman
said the kingdom believes its resources are big enough to be commercialized.
Investment Minister
Khalid al-Falih
said he was encouraged by the presence of foreign investors at the mining forum and a flagship financial conference last October but wants to see more investments hitting the ground and deals happening.
“When I speak with investors, they believe in the Vision, they believe in the fundamentals of the kingdom, but the FDI flow has not started flowing sufficiently enough to take advantage of the opportunities that are available in Saudi Arabia,” he said on a panel, referring to foreign direct investment.
Foreign investment reached $19.3 billion in 2021, the last full year for which data is available, which included oil giant Saudi Aramco’s $12.4 billion sale of its pipelines business. Concerns persist among foreign investors about the rule of law and reputational issues after the 2018 killing of a prominent Saudi journalist by men close to
Prince Mohammed.
Attracting capital outside oil and gas has proven more difficult, with investors still largely seeing Saudi Arabia as a source of funding for projects abroad. But increasingly the Saudis are using their deep pockets to drive foreign companies to bring technology into the kingdom.
On Wednesday, Ma’aden said it was investing $126.4 million to take a 9.9% stake in
Ivanhoe Electric,
an American minerals exploration and development company. In parallel, the two companies are forming a joint venture to use Ivanhoe’s proprietary geophysical surveying technology to search for copper, gold and silver over nearly 19,000 square miles of territory.
In another sign of Saudi Arabia’s commitment to mining, its sovereign-wealth vehicle, the Public Investment Fund, announced a more than $3 billion initiative with Ma’aden to buy mining assets abroad. Initial investments will focus on minority equity positions in iron ore, copper, nickel and lithium—minerals needed for Saudi Arabia’s ambitious industrial development plans that include renewables, electric vehicles and batteries.
Write to Stephen Kalin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
RIYADH, Saudi Arabia—Saudi officials are wooing top mining companies to help exploit untapped mineral deposits in the kingdom that could be worth hundreds of billions of dollars, as the world’s biggest exporter of oil accelerates plans to build new industries away from hydrocarbons.
The fourth-largest net importer of minerals globally has a small domestic mining industry despite unverified estimates putting its mineral wealth at over $1.3 trillion, including deposits of copper, zinc, phosphates, uranium and gold. The results of a new survey are expected by 2027.
Industry leaders, including senior executives from
Rio Tinto
PLC,
BHP Group Ltd.
and
Barrick Gold Corp.
, addressed a conference in Riyadh this week with discussions focused largely on expanding access to critical minerals to meet surging demand for metals needed for the clean energy transition.
Saudi officials positioned the kingdom as critical to the solution. With more than 7,000 attendees from over 100 countries, the conference attracted global interest even as the government continues to struggle to get foreigners to invest.
“Across the board, I think, Saudi Arabia is well-positioned, has a competitive offering to play not only in extraction, processing and refining but also further downstream into manufacturing,” Prince Sultan Khalid Al Saud, chief executive of the Saudi Industrial Development Fund, said on Thursday.
Saudi Arabia’s unlikely push to become a significant player in the $2 trillion global mining industry is part of an ambitious agenda launched seven years ago by de facto Saudi leader Crown Prince
Mohammed bin Salman.
Dubbed Vision 2030, it aims to build new industries unrelated to oil in large part by improving the country’s business climate. Launched in 2016, those plans are now at their halfway point.
The easing of strict social norms in recent years has led to new tourism and entertainment industries, but Saudi officials say they see mining as the third pillar of the kingdom’s economy after hydrocarbons and petrochemicals. The government revised its mining investment law in 2021 after extensive consultations with industry participants. It issued three exploration licenses in 2022, with five more expected this year.
Barrick Gold signed two new joint ventures this week with state-owned mining company Ma’aden to explore for copper in western Saudi Arabia. That partnership came together after another site operated by the Canadian miner faced regulatory obstacles a decade ago; it currently produces some 152 million pounds of copper annually.
President and Chief Executive
Mark Bristow
said Barrick is interested in hunting for gold and copper assets in the kingdom. “Conceptually, there’s enormous potential in this country, and it’s certainly supported by the fact that there are a handful of very profitable mines,” he said. “To elaborate on that is what it’s all about really.”
Khalid al-Mudaifer,
vice minister for mining, said the kingdom had passed an important inflection point in its strategic planning for the industry and is confident that the new survey will turn up even more deposits.
“Mining was not an important thing for us. Oil and gas was good enough for development. Why bother with mining?” he said in an interview. Now, “we have put Saudi Arabia on the map.”
One of the targeted minerals is uranium for use in civilian nuclear power. Saudi Energy Minister Prince
Abdulaziz bin Salman
said the kingdom believes its resources are big enough to be commercialized.
Investment Minister
Khalid al-Falih
said he was encouraged by the presence of foreign investors at the mining forum and a flagship financial conference last October but wants to see more investments hitting the ground and deals happening.
“When I speak with investors, they believe in the Vision, they believe in the fundamentals of the kingdom, but the FDI flow has not started flowing sufficiently enough to take advantage of the opportunities that are available in Saudi Arabia,” he said on a panel, referring to foreign direct investment.
Foreign investment reached $19.3 billion in 2021, the last full year for which data is available, which included oil giant Saudi Aramco’s $12.4 billion sale of its pipelines business. Concerns persist among foreign investors about the rule of law and reputational issues after the 2018 killing of a prominent Saudi journalist by men close to
Prince Mohammed.
Attracting capital outside oil and gas has proven more difficult, with investors still largely seeing Saudi Arabia as a source of funding for projects abroad. But increasingly the Saudis are using their deep pockets to drive foreign companies to bring technology into the kingdom.
On Wednesday, Ma’aden said it was investing $126.4 million to take a 9.9% stake in
Ivanhoe Electric,
an American minerals exploration and development company. In parallel, the two companies are forming a joint venture to use Ivanhoe’s proprietary geophysical surveying technology to search for copper, gold and silver over nearly 19,000 square miles of territory.
In another sign of Saudi Arabia’s commitment to mining, its sovereign-wealth vehicle, the Public Investment Fund, announced a more than $3 billion initiative with Ma’aden to buy mining assets abroad. Initial investments will focus on minority equity positions in iron ore, copper, nickel and lithium—minerals needed for Saudi Arabia’s ambitious industrial development plans that include renewables, electric vehicles and batteries.
Write to Stephen Kalin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8