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(Bloomberg) -- Saudi Arabia is looking for mining deals in a push to secure supplies of critical minerals for its industrialization plan, just as a wave of attempted consolidation sweeps the sector.
Joining the consolidation drive “could be a good way of entering the market or getting at least access to different assets in a more structured way,” Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef said in an interview at the World Economic Forum in Davos. He didn’t elaborate whether this would be buying stakes in assets or buying companies outright.
Deals have been on Saudi Arabia’s radar for a while as it pushes through with an ambitious economic transformation plan. The overseas drive has had limited results so far with just one major completed deal and another in the works in Pakistan, but recent dealmaking efforts by major companies may give the Saudis an opportunity to deploy their cash.
Also read: Saudi Arabia Faces Investor Doubts Over Big Mining Ambition
Alkhorayef said Manara Minerals Investment Co., a Saudi firm backed by the sovereign wealth fund, could be interested in Barrick Gold Corp.’s stake in a Chilean Zaldivar copper mine. “Chile is a great mining country and the relations between Barrick and Manara are very good,” he said at the World Economic Forum.
Barrick is looking to sell its 50% holding in the Zaldivar mine in Chile, Bloomberg News reported earlier this week. Antofagasta Plc owns the remainder of the stake.
Big-Ticket Deals
The mining industry has had a series of big-ticket deal attempts in the past year. Rio Tinto Group and Glencore Plc have held early stage talks about combining their businesses to create a giant to rival longstanding industry titan BHP Group. BHP too last year tried to buy Anglo American Plc in a $49 billion transaction — forcing Anglo to accelerate an overhaul of its business as part of its defense strategy — before eventually walking away empty handed.
Alkhorayef compared the global mining push with Saudi moves in the food industry. State-owned Saudi Agricultural and Livestock Investment Co. bought a stake in Brazil’s biggest poultry producer BRF SA in 2023. Salic also made a $4 billion bid to fully take over Olam Group Ltd.’s agribusiness unit last year.
Saudi Arabia has made its first big foray into international mining with the acquisition of a 10% holding in Brazilian company Vale SA’s base metals unit in 2023. In Pakistan, the purchase of a stake in a copper and gold mining project controlled by Barrick Gold is still in the process of negotiating key details, including where the minerals will be processed, Pakistan’s petroleum minister said this month.