In Keynote Speech to Saudi Mining and Minerals Conference, Ma’aden CEO Describes US$27 Billion Investment in Saudi Mining Sector
In a keynote speech delivered at the Saudi Mining & Minerals Symposium and Exhibition, Ma’aden President and CEO Khalid Al-Mudaifer outlined how the mining sector has now income a major contributor to the economic diversification of Saudi Arabia. He stated that the government’s adoption of a clear regulatory system and its commitment to building key modern infrastructure has enabled significant investment from domestic and international companies across the Saudi mining value chain.
“With many large scale developments across several commodities and value chains,” said Mr. Mudaifer, “the world is beginning to take notice of the mining sector in the Kingdom.”
Since its initial public offering in 2008, Ma’aden has become one of the fasted growing mining companies in the world, delivering significant growth across a diversified portfolio of commodities and businesses - from gold and copper, to bauxite, phosphate and industrial minerals. “Since our IPO we’ve seen revenue grow to $3 billion compared to only $64 million in 2007,” he stated, “And our asset value has reached over US$ 22 billion compared to $1.6 billion in 2007 - the result of significant investment in world class facilities across the entire Kingdom.”
Ma’aden has embraced its leading role in building the mining sector into the third pillar of Saudi industry, beyond oil and petrochemicals. “But we are also transforming remote communities by delivering local economic opportunities,’ said Mr. Mudaifer, “we are transforming downstream industries by delivering entire mining value chains inside the Kingdom; transforming the industry by delivering globally competitive facilities; and we are transforming global markets through reliable delivery of quality products to global customers.”
In total, Ma’aden and its partners have invested $27 billion in the Saudi mining sector, including exploration, facilities, infrastructure, training and community investment. Ma’aden operations are found across the great distances of Saudi Arabia from the Arabian Shield in the west, to the phosphate and bauxite reserves in the north and the central region, to the Ras Al Khair Industrial City in the east.
“In each area, Ma’aden has built mining industrial cities and complexes, we’ve created jobs and we’ve enabled communities to prosper,” said Mr. Mudaifer. To demonstrate the depth of Ma’aden’s business, Mr. Mudaifer focus on two success stories – Ras Al-Khair and Wa’ad Al Shamal.
Ras Al Khair is a multi-commodity minerals industrial city built by Ma’aden and its partners 80 kms north of Jubail in Saudi Arabia's Eastern Province with a total joint investment of $35 billion. The Middle East Economic Digest (MEED) called Ras Al Khair “the most ambitious single phase industrial scheme ever conceived in the Middle East.” It is home to the first Ma’aden integrated Phosphate Project and the integrated Ma’aden Aluminum.
The city is connected to Ma’aden mines in the north and the central regions of the Kingdom through a 1,500 kilometer mineral railway and it is home to a 10-berth port that allows Ma’aden to capitalize on the competitive advantage of Kingdom’s geographical location and deliver its products to global markets. Ras Al Khair has added US$ 9 billion to Saudi Arabia’s GDP and has added 25,000 direct and indirect jobs.
Ma’aden’s $5.6 billion dollar phosphate’s facilities with Sabic are also located at Ras Al Khair, consisting of a phosphoric acid plant, a sulphuric acid plant, an ammonia plant, a DAP granulation plant, a co-generation and desalination plant. As well, the city includes Ma’aden Aluminium – a $10.8 billion dollar joint venture with Alcoa. Ma’aden Aluminium is one of the world’s largest fully integrated aluminium facilities that includes refinery, smelter and one of the world’s most technologically advanced rolling mills focused on the production of can sheet, end and tab stock as well as auto, construction and foil applications.
Positioned strategically on Arabian Gulf, Ras Al Khair allows Ma’aden to deliver its aluminium and phosphate products to the world, taking full advantage of Saudi Arabia’s proximity to markets in Asia, Africa and Europe.
“Together with our government and joint venture partners,” said Mr. Mudaifer, “Ma’aden has delivered a world class industrial center at Ras Al Khair that has benefitted the mining sector, the Saudi workforce, local communities and the Kingdom at large. And following on from the success of Ras Al Khair, Ma’aden has now taken a leading role in development of a new minerals city at Wa’ad Al Shamal.”
The scale of Wa’ad Al Shamal is similar to that of Ras Al Khair, but because Wa’ad Al Shamal City will cover 440 sq kms in a remote northern location over 1,000 kms from the East Coast, it is perhaps an even more ambitious undertaking; it is the largest ever industrial development in the interior of Saudi Arabia.
Wa’ad Al Shamal will include a residential community and industrial complexes aimed at developing the 7% of global phosphate reserves found in northern Saudi Arabia. The project is a US$8 bn partnership with SABIC, and Mosaic Corporation, the world's leading phosphate producer. It will deliver 7 world-class plants, making Wa’ad Al Shamal one of the biggest integrated phosphate industry complexes in the world.
At Wa’ad Al Shamal, Ma’aden intends to maximize social and economic benefits to the local community. Before the project began, Ma’aden undertook a study to assess existing regional capabilities. It identified the need to upgrade the educational and vocational skills of young Saudis in the area so it joined forces with Technical and Vocational Training Corporation to launch the Saudi Mining Polytechnic, the first of its kind in the Kingdom. It also sponsored learning programs at two local high schools and launched a program with the Royal Commission to deliver English, math and industrial management courses to local high school graduates to prepare them for success in higher education, vocational schools and the job market.
Ma’aden also identified a need to develop local small businesses. As part of its localization strategy, Ma’aden required all of its global contractors to meet minimum local content requirements for hiring and spending; 10% of all staff must be locally engaged and contractors must spend 12% of their contract value on local goods and services. Early in the project, Ma’aden set up an opportunities registration website and a community development centre as resources for local companies who are looking to play a role in Wa’ad Al Shamal, in addition to training and certification of those local companies interested in working with its contractors.
Ma’aden’s success with its localization program at Wa’ad Al Shamal prompted it to adopt localization as a strategic model for all Ma’aden projects.
“To all those service and supply companies in the audience here today,” Mr. Mudaifer advised, “please take note: any company seeking to participate in the Saudi mining sector must be localized, must participate in the development of local businesses, and must ensure that mining projects benefit local communities to the greatest extent possible.”
He concluded his speech by saying that the six thousand Ma’aden employees are proud of what they have achieved in such a short time. “I hope that today I have been able to convey to you the capacity of our people, the strength of Ma’aden’s strategy and the quality of our projects. But this is not enough for us. We are continually working to secure the collaboration of our partners, the prosperity of our communities and the confidence of our customers.”
For further information please contact: