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

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

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

“Achieving the industrial and manufacturing perspective of Vision 2030 will be heavily dependent on the availability of the minerals needed to produce metals required in manufacturing,” he advised Arab News.

“As the national mining champion, we play a central role in the economic diversification of the nation. We are also applying advanced minerals exploration techniques and technologies to extract minerals that will further develop Saudi Arabian industries.”

Oil has been the engine behind the nation’s trendy financial improvement, however there are numerous different valuable supplies beneath its rugged terrain. The Kingdom is the most important producer of gold ore within the Middle East, and gold has been mined right here for 1000’s of years.

It can be wealthy within the minerals that energy the worldwide financial system — aluminum through bauxite, copper, phosphates and different base metals, in addition to the uncommon earth metals which are in growing demand by high-tech industries.

The Kingdom’s Energy Ministry not too long ago estimated its untapped mineral sources to be price about SR5 trillion ($1.33 trillion). Under Vision 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 vast under-explored territories compared with other world-class mining countries. Ma’aden’s goal is to capitalize on that to become one of the world’s top mining companies, and we are making great strides in achieving this goal,” Al-Ohali mentioned.

“In 2019, Ma’aden tripled its exploration spend and plans for more in 2020. The increase in exploration spending is focused on brownfield drilling, assessment of potential greenfield targets and continued drilling at many prospective locations to maintain healthy ore reserves. We are working on two more gold mines that we expect to bring on stream around the middle of the 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 “prevent, detect and isolate” outbreaks of the virus in its mining camps — but in addition the worldwide financial shock that hit the commodities markets particularly arduous.

“In terms of our current operations, the impact of COVID-19 on our local and global supply chains and distribution networks have been manageable so far, but it is still too early to say how the pandemic might impact the business in the coming period, especially if there is a second outbreak,” he mentioned.


BIO

BORN: 1959, Unaizah, Al-Qassim Province

EDUCATION: Master’s diploma in chemical engineering, King Fahd University of Petroleum and Minerals

CAREER

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

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

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

Aluminum costs have been “inching up,” and there’s regular demand for fertilizers and phosphates in some components of the world.

“We currently export our products to about 22 countries across all continents. We serve the farming industry in all major regions in Asia, Africa, the Americas and Australia. Our aluminum products serve mainly the local market, as well as key countries in Asia, Europe and North America,” he added.

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

The shiny spot of the pandemic lockdown for Ma’aden has been the efficiency of gold on worldwide markets. “We are very happy to have gold as a major part of our business. It is a counter-cyclical commodity in some respects, and has virtually acted as a built-in hedging mechanism for us. It was seen as a ‘safe haven’ investment around the world,” he added.

Gold continues to play a outstanding half in development plans, Al-Ohali mentioned. “We have started construction of our largest and most ambitious mine initiative, the Mansourah & Massarah gold project. This is an $880 million undertaking that will leverage the tremendous mineral wealth of Saudi Arabia and help us achieve our strategic goal of increasing gold production to 1 million ounces per year.”

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

“Our growth ambitions in phosphate are high. We are currently constructing our third ammonia plant which is around 50 percent completed for a capacity of about 1.1 million tons per year. We are also in the process of exploring our next phosphate mega-project, set to produce 3 million tons per year,” he added.

Recently, 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 especially important as it now has a very active and clear plan to resolve its design problems and ramp up production to full throughput toward the second half of 2021,” Al-Ohali mentioned.

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

The international commodity worth downturn and the financial results of the pandemic mixed to supply losses for the primary two quarters of the yr, however Al-Ohali mentioned the long-term outlook for the core enterprise segments stays constructive.

“It is difficult to speculate on what the remainder of the year will look like, but I can assure you that Ma’aden has inherent strength in its aluminum value chain. While heavily leveraged for the time being, we feel confident of our operating margins to generate ample cash to take care of all our obligations,” he added. 

Ma’aden’s monetary potential has been enhanced by the passing earlier this yr of the mining funding regulation. “It is a big step in the efforts the government of Saudi Arabia is taking to facilitate the growth of the mining industry and enhance its role in building a diversified and sustainable economy,” Al-Ohali mentioned. Ma’aden was intently 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 ample mining knowledge that permits buyers to conduct feasibility research, in addition to offering a transparent course of for licensing.

“It also supports the sustainability of mining investments by preserving the environment, and complying with health, safety and environmental regulations for workers in the national mining industry and local communities,” he added.

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

“We constantly explore growth through wholly owned opportunities or with strategic partnerships to improve our ability to serve our global customers and solidify our position on the global stage,” Al-Ohali mentioned.

“We have the competitive edge to achieve success and we strive to build Ma’aden’s brand and ensure it is recognized for quality and value. Our experienced and talented people are well able to deliver on our promises,” he added.



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