INTERVIEW: Ma’aden mines Saudi Arabia’s untapped mineral wealth

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Saudi Arabia is famend for its “black gold” hydrocarbon assets, however it’s Mosaed Al-Ohali’s job to make sure that the remainder of the Kingdom’s mineral wealth is exploited to the complete within the large financial transformation underway as a part of Imaginative and prescient 2030.

After a three-decade profession on the petrochemicals large SABIC, Al-Ohali earlier this 12 months grew to become CEO of Ma’aden, the Saudi mining firm that has been given a central function within the Nationwide Industrial Improvement and Logistics Program (NIDLP), a key a part of the Kingdom’s diversification technique.

“Attaining the economic and manufacturing perspective of Imaginative and prescient 2030 shall be closely depending on the provision of the minerals wanted to supply metals required in manufacturing,” he instructed Arab Information.

“Because the nationwide mining champion, we play a central function within the financial diversification of the nation. We’re additionally making use of superior minerals exploration strategies and applied sciences to extract minerals that may additional develop Saudi Arabian industries.”

Oil has been the engine behind the nation’s fashionable financial growth, however there are various different valuable supplies beneath its rugged terrain. The Kingdom is the largest producer of gold ore within the Center East, and gold has been mined right here for hundreds of years.

It’s also wealthy within the minerals that energy the worldwide economic system — aluminum by way of bauxite, copper, phosphates and different base metals, in addition to the uncommon earth metals which can be in growing demand by high-tech industries.

The Kingdom’s Vitality Ministry just lately estimated its untapped mineral assets to be price about SR5 trillion ($1.33 trillion). Beneath Imaginative and prescient 2030, the federal government is aiming to triple the mining and metals sector’s contribution to gross home product and create 200,000 jobs instantly and not directly by 2030.

“Saudi Arabia has huge under-explored territories in contrast with different world-class mining international locations. Ma’aden’s objective is to capitalize on that to grow to be one of many world’s prime mining corporations, and we’re making nice strides in reaching this objective,” Al-Ohali stated.

“In 2019, Ma’aden tripled its exploration spend and plans for extra in 2020. The rise in exploration spending is targeted on brownfield drilling, evaluation of potential greenfield targets and continued drilling at many potential places to take care of wholesome ore reserves. We’re engaged on two extra gold mines that we anticipate to carry on stream across the center of the last decade,” he added.

The COVID-19 pandemic has affected these plans to a point. Ma’aden’s operations within the Kingdom felt the brunt not solely of lockdowns — the corporate put in place a method to “stop, detect and isolate” outbreaks of the virus in its mining camps — but in addition the worldwide financial shock that hit the commodities markets particularly laborious.

“When it comes to our present operations, the impression of COVID-19 on our native and international provide chains and distribution networks have been manageable to this point, however it’s nonetheless too early to say how the pandemic may impression the enterprise within the coming interval, particularly if there’s a second outbreak,” he stated.


BIO

BORN: 1959, Unaizah, Al-Qassim Province

EDUCATION: Grasp’s diploma in chemical engineering, King Fahd College of Petroleum and Minerals

CAREER

  • Chemical engineer, Saudi Petrochemical Firm
  • Senior govt adviser, SABIC
  • CEO, Ma’aden

Al-Ohali estimated that the pandemic would imply a delay of “a few months” in total growth plans.

World commodity costs had been struggling even earlier than the pandemic, with the US-China confrontation casting a cloud over world commerce. However, Al-Ohali stated, in some elements of the world there was a “good adjustment” to the brand new financial atmosphere, with China and different Asian international locations experiencing a pick-up in demand.

Aluminum costs have been “inching up,” and there may be regular demand for fertilizers and phosphates in some elements of the world.

“We at the moment export our merchandise to about 22 international locations throughout all continents. We serve the farming trade in all main areas in Asia, Africa, the Americas and Australia. Our aluminum merchandise serve primarily the native market, in addition to key international locations in Asia, Europe and North America,” he added.

Ma’aden’s provide chain and market attain have been strengthened by the acquisition of Meridian, an African fertilizer group, in addition to by way of joint ventures with different worldwide mining corporations. 

The brilliant spot of the pandemic lockdown for Ma’aden has been the efficiency of gold on worldwide markets. “We’re very joyful to have gold as a significant a part of our enterprise. It’s a counter-cyclical commodity in some respects, and has nearly acted as a built-in hedging mechanism for us. It was seen as a ‘secure haven’ funding world wide,” he added.

Gold continues to play a distinguished half in development plans, Al-Ohali stated. “Now we have began development of our largest and most formidable mine initiative, the Mansourah & Massarah gold mission. That is an $880 million endeavor that may leverage the large mineral wealth of Saudi Arabia and assist us obtain our strategic objective of accelerating gold manufacturing to 1 million ounces per 12 months.”

Two years in the past, Ma’aden launched into one in every of its most formidable plans within the Kingdom — the Wa’advert Al-Shamal Minerals Industrial Metropolis, a growth of seven world-class built-in vegetation with the capability to supply 3 million tons of phosphate fertilizer merchandise per 12 months. As one of many largest built-in phosphate facilities on the planet, the event will serve the rising international want for fertilizers.

“Our development ambitions in phosphate are excessive. We’re at the moment setting up our third ammonia plant which is round 50 p.c accomplished for a capability of about 1.1 million tons per 12 months. We’re additionally within the technique of exploring our subsequent phosphate mega-project, set to supply 3 million tons per 12 months,” he added.

Just lately, Ma’aden put in place a $4.1 billion financing facility that permits the Wa’advert Al-Shamal enterprise to maneuver to full operational standing. “This refinancing is particularly necessary because it now has a really lively and clear plan to resolve its design issues and ramp up manufacturing to full throughput towards the second half of 2021,” Al-Ohali stated.

Since its preliminary public providing in 2008, Ma’aden has been listed on the Tadawul inventory alternate, with the Public Funding Fund as its majority shareholder. That type of backing provides it deep monetary pockets, however Al-Ohali is acutely aware of the wants of some shareholders for an earnings stream within the type of dividends, in addition to the capital development the shares have historically earned.

The worldwide commodity worth downturn and the financial results of the pandemic mixed to supply losses for the primary two quarters of the 12 months, however Al-Ohali stated the long-term outlook for the core enterprise segments stays optimistic.

“It’s tough to take a position on what the rest of the 12 months will seem like, however I can guarantee you that Ma’aden has inherent energy in its aluminum worth chain. Whereas closely leveraged in the interim, we really feel assured of our working margins to generate ample money to maintain all our obligations,” he added. 

Ma’aden’s monetary potential has been enhanced by the passing earlier this 12 months of the mining funding regulation. “It’s a large step within the efforts the federal government of Saudi Arabia is taking to facilitate the expansion of the mining trade and improve its function in constructing a diversified and sustainable economic system,” Al-Ohali stated. Ma’aden was carefully concerned within the framing course of for the brand new laws.

“The up to date regulation focuses on enhancing the governance and transparency for present and future mining investments, and boosting the arrogance of buyers by offering clear and enough mining information that permits buyers to conduct feasibility research, in addition to offering a transparent course of for licensing.

“It additionally helps the sustainability of mining investments by preserving the atmosphere, and complying with well being, security and environmental rules for employees within the nationwide mining trade and native communities,” he added.

The laws can also be prone to facilitate new relationships with overseas buyers and trade companions. Ma’aden already has long-standing ties with Alcoa of the US within the Ras Al-Khair Industrial Metropolis, and with Barrick Gold of Canada in copper manufacturing. It additionally has a strategic partnership with PhosAgro of Russia.

“We continuously discover development by way of wholly owned alternatives or with strategic partnerships to enhance our potential to serve our international clients and solidify our place on the worldwide stage,” Al-Ohali stated.

“Now we have the aggressive edge to realize success and we try to construct Ma’aden’s model and guarantee it’s acknowledged for high quality and worth. Our skilled and proficient persons are nicely capable of ship on our guarantees,” he added.



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