Ma’aden awards $880m gold mining contract

The Saudi Arabian Mining Company (Ma’aden) has awarded a new $880 million contract at its Mansourah-Massarah gold mines, marking the company’s largest-ever investment in the gold sector.

The agreement was signed for Jac Rijk Al-Rushaid Contracting and Services Company to provide operational mining services at the gold mines. The range of services will include drilling, scaling, loading, hauling, re-handling, ore control, dewatering, crusher feed, and all related production activities at the mines.

It is forecast that the Mansourah-Massarah site will reach full production capacity by 2023 and will represent one-quarter of Ma’aden’s goal to produce 1 million ounces of gold per year by 2025.

The Mansourah-Massarah site is one of six mines in Ma’aden’s portfolio and is part of the company’s bid to boost local production. Gold currently accounts for around 20 percent of Ma’aden’s revenues.

Ma’aden on Sunday also announced the completion of the pre-operational stage at its third ammonia plant in Ras Al-Khair Industrial City. The $900 million project is expected to be completed in the fourth quarter of 2021 and will start operations in the first quarter of 2022, the Saudi Press Agency reported.

The ammonia plant is the first project as part of Ma’aden’s $6.4 billion Phosphate 3 expansion plan, which aims to add 3 million tonnes of phosphate fertilizer production capacity to Ma’aden’s portfolio. This will bring Ma’aden’s total production capacity of more than 9 million tonnes and make it one of the top three global phosphate fertilizer producers in the world.

Ma’aden CEO Abdul Aziz Al-Harbi said in a press statement: “This is a tremendous milestone for our phosphate portfolio. The ammonia plant expansion will add over 1 million tonnes of ammonia production to reach 3.3 million tonnes, making Ma’aden one of the largest ammonia producers east of the Suez Canal.”

Ma’aden in April reported a net profit after zakat and tax of SR 761.2 million ($202.99 million) in the first quarter of 2021, compared to a net loss of SR 353.3 million in the first quarter of 2020.

The Kingdom’s Ministry of Energy has estimated its untapped mineral resources to be worth about SR 5 trillion. Under Vision 2030, the government is aiming to triple the mining and metals sector’s contribution to gross domestic product and create 200,000 jobs directly and indirectly by 2030.

“Saudi Arabia has vast under-explored territories compared with other world-class mining countries. Ma’aden’s goal is to capitalize on that to become one of the world’s top mining companies, and we are making great strides in achieving this goal,” Mosaed Al-Ohali, former CEO of Ma’aden, told Arab News in October 2020.

“The increase in exploration spending is focused on brownfield drilling, assessment of potential greenfield targets and continued drilling at many prospective locations to maintain healthy ore reserves. We are working on two more gold mines that we expect to bring on stream around the middle of the decade,” he added.

On Friday, gold prices slipped slightly, down 1.2 percent to $1,875.31 per ounce, while US gold futures were 0.9 percent lower at $1,879.6.