Jul 13, 2014
The Saudi Arabian Mining Company (Ma’aden) announces the signing of a partnership agreement with Barrick Gold Corporation (Barrick) of Canada for the purpose of establishing a limited liability company that will acquire the copper project in Jabal Sayid, and to develop & operate the mine which is 120 kilometres south east of Al Medina Al Munawwara. Having received Ministry of Petroleum and Mineral Resources in principle approval of the transaction including the transfer of the mining and exploration licenses to the new joint venture, Ma’aden will invest around SR787.5 Million (USD210 Million) for the purpose of acquiring a 50% share of the project, including all equipment and existing infrastructure free of any encumbrance or debt.
The agreement was signed at the head office of Ma’aden in Riyadh, attended by the chairman of Ma’aden’s Board of Directors Eng. Abdullah bin Saif Al Saif. Ma’aden was represented by its Chief Executive Officer Eng. Khaled bin Saleh Al Mudaifer and Barrick was represented by the Chairman of its board of directors Mr. John Thornton. The signing ceremony was also attended by Ma’aden’s Chief Financial Officer Khaled Al Rowais and Barrick’s Senior Executive Vice President Mr. Kelvin Dushinsky.
Jabal Sayid is the most important copper mine discovered in the Kingdom. The underground mine is reported to have 650 thousand tonnes of reported reserves. Production at Jabal Sayid is expected to start in the fourth quarter of 2015 as engineering, construction and equipment installation are substantially complete. Production capacity is expected to reach between 45 and 60 thousand tonnes per year. Based on the current reported reserves, the expected life of the mine is up to 15 years but may be increased by the joint venture in light of its intention to expand exploration efforts under its exploration and mining licenses. The project will provide in excess of 400 direct jobs in addition to further non-direct jobs.
Chief Executive Officer Eng. Khaled bin Saleh Al Mudaifer pointed out that Ma’aden’s investment in copper activities is in line with its strategy to diversify its business portfolio, which currently consists of phosphate, aluminium, gold and industrial minerals. In addition, Ma’aden’s investment in the Kingdom’s most important copper project and its partnership with the world’s leading gold mining company will give Ma’aden an opportunity to attain added value for its investments through the transfer of specialised copper know-how and technology to the Kingdom initially at the Jabal Sayid mine and to other locations within the Kingdom thereafter. It is notable that the mine is in its final development stage which will reduce the time required for realizing a return on the investment. Al Mudaifer further added that international joint ventures such as the ones Ma’aden established with aluminium giant Alcoa and phosphate leader Mosaic constitute an important means for Ma’aden in realizing its vision of developing the Kingdom’s mining industry to be become a fundamental pillar of Saudi industry through developing Ma’aden into an international mining enterprise.
The new company will comply with the social development standards applied at Ma’aden, which include increasing Saudization levels by developing national manpower through technical and practical training, and by providing a competitive working environment. In addition, they include allocating a percentage of jobs to the communities close to the mine, and providing training and development opportunities at the Saudi Mining Polytechnic established by Ma’aden in partnership with the University of Missouri, or by other Ma’aden-established training programs. Such standards also include procuring a high percentage of purchases from the local markets, developing small and medium size businesses to benefit from investment opportunities in the mining value chain opportunities and allocating a fixed percentage of project profits to local communities development activities and to research and development in the mining and copper industries.