Manara Minerals is planning to establish a metals trading arm to support its interests in mining companies abroad. The plan was revealed by the firm’s chief executive Robert Wilt at an event in Riyadh.
Manara Minerals
The investment company is a joint venture between the state-owned mining company Ma’aden and Saudi Arabia’s Public Investment Fund. The fund was established as part of the kingdom’s efforts to diversify its oil-dependent economy. Manara Minerals seeks to exploit the country’s vast resources of phosphate, gold, copper, and bauxite. Moreover, it purchases minority shares of up to 20 percent of assets abroad.
In an interview with Reuters on the sidelines of the Future Minerals Forum 2024, Wilt stated, “We envision Manara having a trading arm.”
“Our first phase of setting up the company is getting the investment rolling, but all of these investments are predicated on an offtake…So there is going to be some level of trading to manage the books of offtake minerals we have,” he added.
Investments
In an offtake deal, a buyer usually agrees to buy a portion of the producer’s future output.
“We are not envisioning going into competition with Glencore or Trafigura. Our vision is just to manage our own book,” Wilt said.
Mining company Glencore’s trading division includes coal, oil, liquefied natural gas, and related products, in addition to metals. In 2022, the company achieved record profits of $6.4 billion.
Manara Minerals’ first major investment step abroad was a deal with the Brazilian company Vale. It acquired 10 percent of its shares in the copper and nickel unit last July. Vale Base Metals is Vale’s $26 billion copper and nickel unit
Read: Future Minerals Forum: Global metals demand to surge sixfold by 2040
Metal processing center
The fund has a strict mandate to source iron ore, lithium, copper, and nickel. Hence, this is part of Saudi Arabia’s plan to become a metals processing hub, Wilt explained.
Moreover, Manara Minerals is in talks to potentially buy a stake in the Reko Diq mine in Pakistan, half of which is currently owned by Toronto-listed Barrick Gold. The governments of Pakistan and the province of Balochistan own the second half of the company.
Barrick Gold Company considers the mine one of the largest areas of copper and gold in the world that needs development.
“Manara is evaluating a host of opportunities, post closure of the Vale deal, and Reko Diq is one of them,” Wild added.
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