Monday 31 July 2023

#SaudiArabia’s Mining Plan; Israel-Gulf Tensions; Egypt's Dollar (EGP/USD) Hunt - Bloomberg

Saudi Arabia’s Mining Plan; Israel-Gulf Tensions; Egypt's Dollar (EGP/USD) Hunt - Bloomberg

Fresh from becoming one of the world's most important investors in sports and tourism, Saudi Arabia is now turning its vast piles of cash to the less glamorous, but no less significant, world of metals.

The kingdom has outlined a typically ambitious plan to invest billions in global mining operations as a way to position itself as a hub for the processing and trade in minerals vital for the energy transition. Last week, it made its first foray in this strategy with a $2.6 billion deal to take a stake in Vale's base metals business.

Saudi Arabia says it has more than $1 trillion of mineral resources, including copper, zinc, phosphates, uranium and gold. Crown Prince Mohammed bin Salman, eager to diversify the kingdom's oil-dependent economy, wants to exploit these reserves — but progress domestically has been slow and most of the domestic mining projects are at early stages.

In order to fill the gap between its ambitions and its domestic production, Saudi Arabia has established a new vehicle controlled by its giant sovereign wealth fund and national mining company, known as Maaden, to buy up resources globally and ship to the kingdom for processing.

For the global mining industry, under pressure to find alternatives to Chinese buyers and sources of funding, Saudi Arabia is emerging as a new contender.

And as the question of who controls the commodities needed to decarbonize the world's economies increasingly rises to the top of the agenda for the policymakers in the US and its allies, Prince Mohammed thinks he has the answer.

No comments:

Post a Comment