PIF’s joint venture with Ma’aden to help establish mining sector: top official

PIF’s joint venture with Ma’aden to help establish mining sector: top official
According to the official, the PIF is committed to bringing core mining projects to life, supplying the world with critical minerals, and helping to meet decarbonization targets at the same time. (File)
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Updated 03 June 2023
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PIF’s joint venture with Ma’aden to help establish mining sector: top official

PIF’s joint venture with Ma’aden to help establish mining sector: top official
  • There is ‘as much as $1.3 trillion in untapped resources sitting under the ground in the country’

RIYADH: With metals and mining being identified as one of the 13 strategic sectors to focus on to achieve the goals outlined in Vision 2030, the Kingdom’s sovereign wealth fund’s joint venture with Saudi Arabian Mining Co., also known as Ma’aden, will help unlock the potential of the mineral wealth in the nation, a top official said. 

In an interview with Arab News, Mohammed Aldawood, head of industrials and mining sector for Middle East and North Africa investments at the Public Investment Fund, said that the joint venture will help to establish the mining sector as the third pillar of the Kingdom’s economy, along with providing an opportunity to explore new territories. 

“We (PIF) plan to support the growth of mining as a key enabler of this mission to help establish the industry as the third pillar of the economy. Saudi Arabia is fortunate to be endowed with healthy mineral reserves that are currently underexplored. We estimate that there is as much as $1.3 trillion in untapped resources sitting under the ground in the country,” said Aldawood. 

He added: “This is a really exciting development that is going to give the PIF and Ma’aden an extensive international footprint in the mining space. It’s going to give the partners a platform to access minerals not available in Saudi Arabia and gives us an opportunity to move into new geographical territories.” 

It was in January that Ma’aden and the PIF agreed to form a joint venture to invest in mining assets globally. 

Ma’aden will own 51 percent of the venture while the PIF will own 49 percent.

The new venture’s strategy will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.

Mohammed Aldawood, Head of industrials and mining sector for Middle East and North Africa investments at PIF

Aldawood said that the new venture’s strategy “will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.”  

“When we commence the partnership, the company’s paid-up capital will amount to $50 million and we will review that as operations grow. We have agreed if additional funding is required, both PIF and Ma’aden will fund the new company up to $3.12 billion,” he added. 

Rising demand for critical minerals

Aldawood also talked about the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms. 

Citing consultancy firm Wood Mackenzie, Aldawood said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world. 

The PIF official further said that the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals as the world undergoes an energy transition where demand for critical minerals will rise sky-high. 

“Through our JV with Ma’aden and our combined skills sets and knowledge of the industry, I am confident that we will play a role in the critical minerals supply response for the EV value chain. We’ll work with large mining companies and trading houses in developing projects that address an expected acute shortage in future minerals and ensure that Saudi Arabia retains a leading position,” Aldawood added. 

HIGHLIGHTS

• The official discussed the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.

• Citing consultancy firm Wood Mackenzie, he said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.

• The PIF official said the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals.

According to Aldawood, the PIF is committed to bringing core mining projects to life, supplying the world with critical minerals, and helping to meet decarbonization targets at the same time. 

“The PIF has all the right attributes to be successful in this journey. We have access to capital and the appetite to invest globally and across the life cycle of an asset,” he said. 

JV with Baosteel and Saudi Aramco

In May, the PIF, Saudi Arabian Oil Co. and China-based Baoshan Iron & Steel Co. signed a shareholders’ agreement to establish an integrated steel plate manufacturing complex in the Kingdom. 

Aldawood said that this new facility will be the first of its kind in the Gulf Cooperation Council region, and will help advance the regional steel industry ecosystem. 

“The project aims to enhance the domestic manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating additional export opportunities. It’s a significant investment and a vital development for the industry,” Aldawood noted. 

This JV complex is expected to be located in Ras Al-Khair Industrial City, and the facility would have a steel plate production capacity of up to 1.5 million tons per year.

According to Aldawood, this investment decision has been made to significantly reduce the reliance on imported steel and to serve more customers in several strategic industrial sectors including pipelines, shipbuilding, rig manufacturing, offshore platform fabrication plus tank and pressure vessel manufacturing.

“As with our investment in the mining sector, the investment aligns with the PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive diversification of the local economy,” Aldawood concluded.


Saudi Ports Authority rises in global maritime index Q3 report

Saudi Ports Authority rises in global maritime index Q3 report
Updated 03 October 2023
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Saudi Ports Authority rises in global maritime index Q3 report

Saudi Ports Authority rises in global maritime index Q3 report

RIYADH: Confirming the progressive trajectory of Saudi Arabia’s maritime sector, the Saudi Ports Authority, commonly known as Mawani, has jumped in the global maritime index for the third quarter of 2023.  

As outlined in a recent report from the UN Conference on Trade and Development, the data highlights a leap from 76.16 points in the second quarter to 77.66 points in the third quarter of the year, the Saudi Press Agency reported.

The uptick reflects Mawani’s commitment to strengthening the competitive capabilities of Saudi ports on the global stage, bolstering the maritime transport sector, enhancing networks, and refining logistics services.

Commenting on the achievement, Saleh Al-Jasser, Saudi minister of transport and logistics services and chairman of Mawani, emphasized that the Kingdom’s advancement is in alignment with the objectives of the National Strategy for Transport and Logistics Services.  

He also pointed to Mawani’s success in improving maritime shipping, with the introduction of 24 new services in 2023 alone.  

This move fortifies trade and export activities and strengthens the Kingdom’s connection to global markets through enhanced operational capabilities, maritime communication routes development, and an uplifted competitive stature.

The maritime network connectivity index, which gauges the interconnection levels of global ports with shipping line networks quarterly, incorporates several sub-indicators, including the scheduled ship visits to the country per week and the number of regular service routes offered by vessel lines to and from the national ports.

Earlier this year, Saudi Arabia celebrated climbing 17 global ranks in the Logistics Performance Index issued by the World Bank.  

On a separate ranking, the Kingdom’s ports rose to the 16th position in the UN Conference on Trade and Development’s Liner Shipping Connectivity Index in June.  

Moreover, Saudi Arabia achieved significant progress in the World Bank’s Logistics Performance Index, jumping 17 places to reach the 38th position in 2023.  

This marks a notable improvement compared to its rankings of 55 in 2018 and 52 in 2016.  

The Kingdom currently has 97 shipping links that connect to 348 international ports.


UAE’s ADNOC obtains global certification to supply sustainable aviation fuel 

UAE’s ADNOC obtains global certification to supply sustainable aviation fuel 
Updated 03 October 2023
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UAE’s ADNOC obtains global certification to supply sustainable aviation fuel 

UAE’s ADNOC obtains global certification to supply sustainable aviation fuel 

RIYADH: The UAE is all set to lead the Middle East in producing sustainable aviation fuel, with Abu Dhabi National Oil Co.’s Ruwais refinery receiving the International Sustainability and Carbon Certification. 

According to the Emirates News Agency, or WAM, the certification makes ADNOC the first company in the Middle East to supply the aviation sector with SAF and reinforces its sustainability pledge. 

The SAF is produced using cooking oils as feedstock and is blended with jet fuel at the Ruwais refinery. 

“Developing sustainable aviation fuel is an essential part of the company’s strategy to provide low-emission fuel to its customers,” said Sultan Albigishi, the acting CEO of ADNOC Refining, in a statement. 

Based in Cologne, ISCC is a global system for certifying the sustainability of agricultural, industrial, and food products. ISCC covers a wide range of products across multiple markets. 

By obtaining the international certificate for SAF production through its existing refineries, ADNOC can supply biofuel to international airlines in Abu Dhabi.  

According to WAM, the company will release its first batch of SAF later this month, which will be enough to fuel a 787-10 Dreamliner flight from Abu Dhabi to Paris. 

“Obtaining the international certificate for sustainability and carbon represents an important progress in ADNOC’s journey to achieve sustainability,” said Ahmad bin Thalith, the acting CEO of ADNOC Global Trading, in the statement. 

ADNOC Global Trading is responsible for providing vital raw materials suitable for refining operations. Trading operations include biofuels and other sustainable fuel alternatives to its global and local customers. 

The group continues to implement a qualitative shift and take practical steps to make today’s energy cleaner while investing in future clean energies to enhance its position as a reliable global energy provider. 

As part of its ongoing efforts to support the UAE’s strategic initiative to achieve climate neutrality by 2050, ADNOC recently announced that it will bring the date of attaining its climate neutrality goal closer to 2045 instead of 2050. 


Closing bell — Saudi main index drops 54 points to close at 10,952

Closing bell — Saudi main index drops 54 points to close at 10,952
Updated 03 October 2023
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Closing bell — Saudi main index drops 54 points to close at 10,952

Closing bell — Saudi main index drops 54 points to close at 10,952

RIYADH: Saudi Arabia’s Tadawul All Share Index continued its downward trend for the third consecutive day, as it shed 53.60 points or 0.49 percent to close at 10,952.34 on Tuesday.

The total trading turnover of the benchmark index was SR4.89 billion ($1.30 billion) as 74 stocks advanced, while 143 declined.

Saudi Arabia’s parallel market Nomu slipped on Tuesday, declining by 247.82 points to 22,544.21, while the MSCI Tadawul Index also fell by 0.44 percent to close at 1,407.13.

Alinma Tokio Marine Co. was the best-performing stock of the day on the main index. The company’s share price soared by 9.99 percent to SR15.20.

Other top firms include Middle East Healthcare Co. and Al Sagr Cooperative Insurance Co., whose share prices edged up by 4.92 percent and 3.69 percent, respectively.

Electrical Industries Co. was the poorest performer of the day, with its share price declining by 8.02 percent to SR1.95.

On the announcements front, Saudi Top for Trading Co., listed on the Kingdom’s parallel market, announced that it has signed a Shariah-compliant credit facility agreement with Riyad Bank worth SR30 million.

The newly-listed company said that SR20 million would be allocated to repay suppliers’ dues, while the remaining SR10 million will be used to issue letters of guarantee.

Meanwhile, Saudi multinational dairy firm Almarai said that its board has approved an investment plan of SR405 million to increase its fresh bakery capacity, expand its products, and enter the frozen bakery segment in the Kingdom.

According to a Tadawul statement, the new investment plan will be financed by Almarai’s internal cash flow, with an expected completion period of two years.


Bahrain’s economy grows 2% as non-oil sector expands

Bahrain’s economy grows 2% as non-oil sector expands
Updated 03 October 2023
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Bahrain’s economy grows 2% as non-oil sector expands

Bahrain’s economy grows 2% as non-oil sector expands

RIYADH: Bahrain recorded a 2 percent growth in real gross domestic product in the second quarter compared to the same period last year, according to its Ministry of Finance and National Economy. 

In its latest report, the department disclosed that the growth in real GDP was fuelled by a rise in the non-oil sector, also of 2 percent. 

The transportation and communication activities topped the rankings, reporting an annual growth of 13.3 percent in the second quarter, followed by hotels and restaurants, which grew by 9.6 percent. 

Real estate and business activities rose 4.9 percent, while financial corporations advanced by 4.7 percent annually over the second quarter of last year. 

The oil sector also reported an annual increase of 2.2 percent in business activity, spurred by a 2.9 percent rise in the combined production of Abu Sa’afa and the onshore Bahrain oil fields.   

Like many oil-dependent nations, Bahrain has recognized the need to diversify its economy.   

Various initiatives have been taken to support this, including in the financial services, tourism and hospitality, and real estate sectors.

The report further stated that the non-oil industry contributed 82.9 percent of Bahrain’s real GDP between April and June,

The financial sector made up the largest segment of the total, with its size reflecting the government’s focus on financial technology and digital banking.

The oil sector was the second-largest contributor to real GDP at 17.1 percent, while government services came in third, accounting for 14.1 percent.

The manufacturing sector dropped by 0.9 percent in the second quarter compared to last year’s corresponding period yet controlled 13.6 percent of the country’s real GDP. 

Bahrain has also been promoting the manufacturing and industrial sectors to reduce dependency on oil, including nurturing Aluminum Bahrain – one of the largest producers of the metal in the world – and growing the petrochemical industry. 

These diversification efforts align with Bahrain Economic Vision 2030, a comprehensive development plan to transform the country’s economy. 

The quarterly report further projects real GDP growth of 2.9 percent in 2023 and 3.2 percent in 2024, with the non-oil sector growing by 3.5 percent and 3.8 percent, respectively, during those years. 


PIF creates Al Balad Development Co. to boost historic Jeddah area

PIF creates Al Balad Development Co. to boost historic Jeddah area
Updated 03 October 2023
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PIF creates Al Balad Development Co. to boost historic Jeddah area

PIF creates Al Balad Development Co. to boost historic Jeddah area

RIYADH: The Public Investment Fund has established a new company to develop the historic Jeddah district of Al Balad into a global tourist destination.

Al Balad Development Co. will work to improve the infrastructure of the region, supervise the restoration of historical buildings in the area, and develop service facilities, according to a statement from PIF. 

It will also oversee the creation of 9,300 homes and 1,800 hotel units, across an area of 2.5 million sq. meters.

Developing the tourism sector is a crucial part of Saudi Arabia’s Vision 2030 – the Kingdom’s plan to diversify its economy away from oil.

Saudi Arabia aims to attract over 100 million visitors by 2030, along with increasing the tourism sector’s contribution to the Kingdom’s gross domestic product to more than 10 percent.

In its statement, PIF noted that the newly formed company is expected to offer attractive investment opportunities and quality commercial options for the people of Jeddah.

“The company will collaborate with the private sector and specialists to develop the area’s infrastructure according to the best standards of urban planning for historic areas, taking into account environmental sustainability and preserving the unique heritage of Historic Jeddah: a UNESCO World Heritage site,” added PIF. 

The development will also see the creation 1.3 million sq. meters of commercial and office space.

The launch of the new company comes alongside the “Revitalize Historic Jeddah” initiative launched by Crown Prince Mohammed bin Salman in 2021.

That in itself was part of the “Historic Jeddah Development Project” which aims to transform the ancient town into a hub for business, tourism, and cultural activities.

The first phase of this development entails carving out the waterfront that had previously been filled to accommodate Jeddah’s urban expansion, while the second part will concentrate on creating an infrastructure for a new area and waterfront.

The third phase of the project includes building a marina, open green spaces, pedestrian overpasses and public utilities.

Earlier this month, Al-Balad, popularly referred to as the heart and soul of Jeddah, was nominated in the “Most Desirable City — Rest of World” category for the Wanderlust Travel Award.

Al-Balad area is home to more than 600 heritage buildings, 36 historical mosques, five major historical markets, ancient corridors and squares, and a major route for pilgrims since the dawn of Islam.

PIF has been spearheading the Kingdom’s economic diversification efforts since the launch of Vision 2030. 

According to its latest annual report, the soverign wealth fund currently holds assets under management worth SR2.23 trillion ($595 billion). 

It has already established 70 companies, with 25 of them founded in 2022, including Saudi Coffee Co. and Halal Products Development Co. 

In 2022 alone, PIF-owned companies created over 181,000 jobs, the annual report added.