- State miner and wealth fund to own a new investment firm
- Maaden says it will invest $126 million in Ivanhoe Electric
According to Bloomberg article published on January 11, 2023, Saudi Arabia will establish a firm to invest in mining assets internationally, as the kingdom seeks to diversify its economy from oil and secure access to strategic minerals.
The sovereign wealth fund and state miner Maaden signed a pact to form a company that will be funded with as much as 11.95 billion riyals ($3.2 billion), according to a statement on Wednesday. Maaden’s shares rose 3.4% to 75.8 riyals in Riyadh, extending its jump this year to 17% and giving it a market value of $50 billion.
The new firm will invest in iron ore, copper, nickel and lithium, as a non-operating partner with minority equity positions. It will also try to sign supply agreements with the companies and mines it invests in.
“The fund will be used to take equity positions in existing assets or existing companies that can provide the offtake metal we need for development in the kingdom,” Maaden Chief Executive Officer Robert Wilt said in an interview in Riyadh.
Wilt said the company would look to make two to three transactions this year, spending about $3 billion in the process.
Maaden will own 51%, while the $620 billion Public Investment Fund will hold the rest. The PIF is Maaden’s biggest shareholder, with a 67% stake.
The announcement came as Maaden said it would buy 9.9% of Ivanhoe Electric Inc. for $12.38 a share, in a deal worth $126 million. The two companies will also form a joint venture to develop mining projects in Saudi Arabia.
Maaden will separately form ventures with Barrick Gold Corp. to explore for minerals in Jabal Sayid and Umm Ad Damar in western Saudi Arabia.
The world’s biggest oil exporter is hosting a major mining conference this week featuring executives from companies including BHP Group Ltd., Rio Tinto Plc and Trafigura Group.
The kingdom has said it has untapped deposits of copper, gold and other metals worth over $1 trillion. It sees mining as crucial to its Vision 2030 strategy to build industries outside of oil.
