Saudi Arabian Mining Company (Ma’aden) signed Wednesday an agreement with the country’s sovereign wealth fund Public Investment Fund (PIF) Tuesday to set up a joint venture (JV) with a paid-up capital of about $50 million (SAR 187.5 million).
Ma’aden will have a 51% stake in the JV, with the remaining stake held by PIF, a disclosure statement to the Saudi bourse said.
The Saudi mining firm will fund its share of investment to the tune of $25.5 million (SAR 95.6 million) from its resources.
Further, if additional funding is required when the project develops, both companies have agreed to raise funds to the tune of $3.2 billion (SAR 11.9 billion) by raising capital or other means, the statement noted.
Initially, the strategy of the JV is to invest in the iron ore, copper, nickel, and lithium sectors as a non-operating partner taking minority equity positions.
This will provide a physical offtake of critical minerals to ensure supply security for domestic minerals downstream sectors and position Saudi Arabia as a key partner in the global supply chain.
The new company is expected to have a positive overall financial impact on Ma’aden in the long term. PIF is the largest shareholder in Ma’aden, with a 67.2% stake.
Ma’aden also signed a 50:50 JV deal with Barrick Gold Pte, an affiliate of Barrick Gold Corp, Tuesday to establish a company to conduct exploration at the Jabal Sayid south exploration, where the Saudi firm has a license. The JV aims to expedite the exploration activities in Jabal Sayid south.
Another deal for a 50:50 JV was signed by Ma’aden with Barrick Gold for setting up a new company for exploring Umm Ad Damar mines.
In another development, the Saudi mining firm signed a heads-of-terms agreement with Ivanhoe Electric Inc (IE) to acquire a 9.9% stake in the US-based technology firm for $126.4 million (SAR 474 million). Ma’aden will finance the cost of acquisition from its resources and form a Saudi-based joint venture, equally owned by the Saudi firm and IE, to explore and develop mining projects in the kingdom.
