Maaden invests $110B in Saudi bid to be mining powerhouse

[Ben Graham]

Saudi Arabia’s Maaden plans to invest $110 billion into metals and mining over the next decade, the latest move by the state-owned miner as it aggressively expands in the sector.

The investment is aimed at tripling its phosphate and gold business and doubling its aluminum business, as the company pursues eight megaprojects, Maaden CEO Bob Wilt said this week, according to news site Semafor. It currently produces about 500,000 oz. of gold and about seven million tonnes annually of phosphate and aluminum.

Maaden will become one of the largest mining companies in the world in a decade, Wilt said, as it seeks to provide minerals for strategic impact and downstream development while boosting GDP.

Wilt was also on the roster of speakers this week at the annual Future Minerals Forum in Riyadh.

Mining clout

The investment announcement adds to Maaden’s significant developments over the past two months, with its drilling in Saudi Arabia this week adding almost 8 million oz. of gold resources across four sites. In November, the company entered into a joint venture with the United States’ Department of Defense and California-focused rare earths miner MP Materials (NYSE: MP) to build a refinery in the Middle Eastern kingdom.

Just a day before the JV announcement, Saudi Crown Prince Mohammed bin Salman pledged to invest $1 trillion in US technology, infrastructure and industry. The state miner’s plans are part of the kingdom’s wider goal of becoming a global hub for battery and electric vehicle manufacturing as it looks to diversify its economy away from oil and gas. 

Maaden’s enormous mining investment will require the construction of more infrastructure in the kingdom such as pipelines, ports and railways, BMO Capital Markets analyst Helen Amos said in a note on Friday.

$22B phosphate megaproject

One of Maaden’s megaprojects is the Wa’ad Al Shamal phosphate complex in the kingdom’s north, which processes phosphate mainly from the Al Khabra mine and started production in 2017. The Wa’ad Al Shamal and Ras Al Khair complexes have annual output capacity of 6 million tonnes of phosphate, according to company figures.

At $22.7 billion in initial capital costs, Wa’ad Al Shamal is potentially the most expensive mining project in the world. The complex’s Phosphate 3 expansion, estimated to cost $7.7 billion is due for completion next year.

For Maaden’s aluminum output, it forecast 850,000 to 1.15 million tonnes of production last year from its Ras Al-Khair facility.

In gold production, the company guided 475,000 to 560,000 oz. in output for 2025 across seven mines in the kingdom.

The company’s investment bid will also require more partnerships with the US and China. Maaden is trying to tap China’s capabilities and expertise while also being strategically aligned with the US on critical minerals, Wilt said.