Saudi Minister of Industry: Kingdom considers launching new ‎mining index ‎

Minister of Industry and Mineral Resources Bandar Al-Khorayef said today, Friday, that Saudi Arabia is studying the launch of a new metals and mining index on the stock exchange, as part of its aspiration to expand the economy’s resources away from hydrocarbons.

The minister told Reuters in an interview in Sydney that his team was meeting with its Australian counterparts to learn more about the launch of a metals index similar to Australia’s ASX300 Metals and Mining sub-index, which includes metals and mining companies including gold, steel and precious metals producers.

“It’s something we are studying… but we haven’t made up our minds yet on whether it will work,” he said.

“We have a secondary stock market in Saudi Arabia… and it is still developing,” he added. We want to see if it would be better to have something to mine.”

He did not mention the number of companies likely to be included in the index.

The Saudi stock market consists of the main Tadawul market and a parallel growth market that companies can join on fewer terms.

Riyadh’s efforts to build an economy that does not depend on oil include a shift towards mining to explore the country’s untapped reserves of resources such as copper, phosphate and gold.

The Minister is participating in the International Conference on Mining and Resources in Sydney this week to mobilize investment interest. On Wednesday, he said, the kingdom plans to offer more than ten mineral exploration licenses to international investors.

Al-Khorayef explained that the launch of a separate index for mining would help increase focus on the mining industry in Saudi Arabia, and would enable them to compare it with markets such as Australia, the United Kingdom, and others.

“The idea is to help the sector grow faster. We certainly see a need for SMEs in the sector to access capital through the capital markets.”

Real estate, energy and trading companies dominate the Saudi stock markets currently, while there are a few mining companies, led by the Saudi Arabian Mining Company (Maaden), the largest mining company in the Gulf.

“The whole idea (of the mining index) is to make sure we have something that can offer new insight to finance companies or financial institutions like banks,” he said.

Al-Khorayef mentioned that the Saudi government believes that it has untapped mineral resources estimated at 1.33 trillion dollars, which include huge amounts of aluminum, phosphates, gold, copper and uranium.

He explained that he had discussions with several mining companies in Sydney this week, including mining giants around the world such as BHP Group, about collaborating in the exchange of knowledge and experience and adopting their successful business model.

“In terms of being able to finance a lot of projects, Saudi Arabia is in a very good position,” he said. But we always seek partnerships because we strongly believe that we can succeed through cooperation.”

He added, “We want to encourage individuals who provide services to mining companies to come to Saudi Arabia either directly or through partnerships with some Saudis. Everyone should view Saudi Arabia as a potential market.”

The Kingdom will host the (Future Metals) conference in Riyadh next January, where it hopes to announce more details about its plans for the mining sector.