Speaking at the Resourcing Tomorrow conference that took in London on Tuesday, November 29, Ma’Aden chief executive officer Robert Wilt said: “Our vision is to grow Saudi Arabia to be the epicenter of the new minerals and new mining globally.”
Ma’Aden, whose majority shareholder is the Saudi Arabian Public Investment Fund, has plans to build the “world’s lowest cost fully integrated aluminium value chain, from bauxite mine to rolling mill,” according to Wilt.
Cost pressures have been a significant concern for aluminium producers globally over the course of 2022, particularly in Europe where higher energy and feedstock costs have resulted in smelter curtailments meaning that the region has become more reliant on imports. Despite recent declines in premiums in Europe, falling freight rates has meant it is still an attractive market for imports.
The official three-month aluminium price has steadily risen over the course of November on improved market sentiment, rising by 10.8% since November 2. The three-month aluminium was at $2,485 per tonne at the 5pm close on December 1.
Wilt noted that as part of the Kingdom of Saudi Arabia’s “Vision 2030" the government intended to pivot the economy away from the oil industry ensuring mining will become the “third pillar” of the economy.
Within Vision 2030 the kingdom has announced its strategy to create new industries from scratch using its mineral resources.
“We don’t want to be a net exporter of resources, we want to be an exporter of value-added products,” vice president of energy for Saudi Arabia Faisel Alrabeh said.
One such industry is the electric vehicle sector.
Michael Naylor, CEO of Australian company EV Metals Group, explained how since 2020 there have been plans in place to build the first integrated battery chemicals complex in Saudi Arabia; a key step in bringing battery production away from China.
“Saudi Arabia can, and will be, a leader in the sustainable production of energy transition metals,” the country’s vice minister for mining affairs Khalid Al-Mudaifer said.
During a panel at the conference, Alcoa chief executive Roy Harvey expounded on the benefits of operating within Saudi Arabia. Global aluminium producer Alcoa has been operating in Saudi Arabia for 10 years now, the company has invested in Ma’Aden and is committed to a strategic policy of low-carbon production.
But Harvey admitted there will be challenges to refining aluminium in the country, primarily because fossil fuel and natural gas (LMG) is so cheap and abundant, making low-carbon aluminium currently uncompetitive.
Fastmarkets assessed the aluminium low-carbon differential P1020A Europe at $10-30 per tonne on November 4, up by $20 per tonne from a year earlier, when the differential sat at $10 per tonne on November 5, 2021.
Fastmarkets assessed the aluminium P1020A premium in-whs dp Rotterdam at $230-265 per tonne on November 29.
Wilt stressed that Ma’Aden is commit to environmental, social and governance (ESG) mining principles, the company has pledged to plant 20 million trees in Saudi Arabia and explained how the company has already invested $35 million into Saudi Arabian schools, a project which Wilt said was “close to his heart.”
Discussions of the role that Saudi Arabia can play in the global metals market have been growing in recent months, with discussions around the potential to locate London Metal Exchange warehouses in the country remerging in July.
Wilt noted that Saudi Arabia was well positioned to increase its role in global metals markets due to its central location between Europe, Africa and Asia and multiple ports including Jeddah and the King Abdul Aziz Port, also referred to as the Dammam Port.
“Saudi Arabia is perfectly located for a mining and logistics hub,” Wilt noted.
Mining exploration was a topic both Ma’Aden and the Saudi Arabian government were keen to expand on. Most exploration has been done on the Arabian shield, but the government and Ma’Aden want to expand this to the relatively unexplored Arabian platform.
Ma’Aden aims to grow the company by 10 times by 2030 on an earnings before interest, taxes, depreciation, and amortization basis, while exploring the estimated $1.3 trillion of untapped resources in Saudi Arabia (based on preliminary exploration done by the US Geological Survey and Saudi Geological Survey).
“Since 2021, we have handed out about 100 exploration licenses and we allow 100% corporate ownership,” Abdulrahman AlBelushi, head of mining strategy for the Ministry of Industry and Mineral Resources, said.
“We [also] want to unlock other countries potential in the Saharan region,” AlBelushi added.
“Unlocking potential” equates to the expanding mining facilities across the Sahara.
Speaking on mining exploration and the potential for Saudi Arabia to expand operations into neighboring countries, Mark Bristow, CEO of Canada-headquartered miner Barrick Gold, said: “I think the Arabian shield is very underexplored and has significant potential to produce all kinds of metals. Egypt has the same geology, it’s an exciting region.”
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