Saudi Arabia eyes global mining deals

Saudi Arabia is seeking deals in the mining sector to secure supplies of critical minerals to support its industrial plan, as the sector grapples with a wave of consolidation attempts.

Joining the consolidation wave in the sector “could be a good way to enter the market or at least get access to different assets in a more organized way,” Saudi Industry and Mineral Resources Minister Bandar Alkhorayef said in an interview on the sidelines of the World Economic Forum in Davos. He did not say whether that meant buying stakes in assets or buying companies outright.

Saudi Arabia has been looking to strike deals for some time as it pushes ahead with its ambitious economic transformation plan. The kingdom’s efforts abroad have yielded limited results so far, with one major deal completed and another underway in Pakistan, but recent dealmaking by major companies could give Saudi Arabia a chance to monetize its cash.

Alkhorayef said Manarat Al Maaden Investment, a Saudi company backed by the Public Investment Fund, could be interested in buying Barrick Gold’s stake in the Zaldivar copper mine in Chile. “Chile is a resource-rich mining country, and the relationship between Barrick and Menara is very good,” he said at the World Economic Forum.

Barrick is looking to sell its 50% stake in the Zaldivar mine in Chile, Bloomberg reported earlier this week. Antofagasta owns the rest.

Big Deals

The mining sector has seen several attempts at big deals in the past year. Rio Tinto and Glencore were in early talks about merging their businesses to create a major rival to longtime industry giant BHP Group.

BHP itself tried to buy Anglo American last year for $49 billion — prompting Anglo to accelerate its restructuring as part of its defense strategy — before ultimately backing down.

Al-Khareef compared the global mining industry’s efforts to Saudi Arabia’s moves in the food industry. Saudi Agricultural and Livestock Investment Company (SALIC) bought a stake in BRF SA, Brazil’s largest poultry producer, in 2023. SALIC also made a $4 billion bid to take full control of Olam Group’s agribusiness unit last year.

Saudi Arabia took its first big step into the international mining industry by acquiring a 10% stake in Brazil’s Vale SA’s base metals unit in 2023.

In Pakistan, Saudi Arabia is still negotiating key details of buying a stake in a copper and gold mining project controlled by Barrick Gold, including the processing site for the minerals extracted from the project, Pakistan’s oil minister said this month.

“There are some very small things to be agreed on commercially,” Alkhorayef said. “I hope we can close this deal very soon.”