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Saudi Deputy Minister of Industry: Govt Support, Int’l Cooperation Essential to Confront Mineral Supply Challenges

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)
Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)
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Saudi Deputy Minister of Industry: Govt Support, Int’l Cooperation Essential to Confront Mineral Supply Challenges

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)
Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer stressed the importance of government support and international cooperation in facing the challenges of the mineral supply chains.

International reports indicate an increase in demand for minerals such as lithium, cobalt, and copper, which requires an increase in investment in mining and processing by $3 trillion by 2030, in addition to the need to provide between 300 and 500 additional gigawatts of energy by 2030.

Mudaifer made his remarks at a panel discussion, "Security of Critical Mineral Supply: China? The West? Saudi Arabia? Or Africa?", at the African Mining Indaba Conference 2024 held in Cape Town, South Africa.

Increased spending

Mudaifer said the central mining region, extending from Africa to West and Central Asia, represents about 41% of the world's countries, boasts 3.5 billion people, or 46% of the world's population. Its economy is worth $9.6 trillion, or 11% of the global economy.

He indicated that the greater region possesses the world’s largest share of mineral reserves and resources, including 89% of its platinum, 80% of its phosphate, 62% of its manganese, and 58% of its cobalt. Africa alone possesses about 30% of the world's resources.

The Deputy Minister added that to enable the region to contribute to meeting the global demand for minerals, it must face the challenges of increasing spending on exploration, as the average global expenditure on exploration is $87 per square meter, while the region's average is $35 per square meter.

It must also develop the infrastructure, such as road, railway, or port network, build the necessary logistics corridors to achieve supply chain flexibility and invest in energy and water to supply mining projects.

Mudaifer asserted that governments must help reduce the risks associated with these challenges and solve them.

Financial incentives

He explained that governments must work to reduce investment risks in the sector by developing the legislative structure and regulations, especially since the implementation period for long-term minerals and mining projects may reach 7 to 9 years from exploration to production.

According to Mudaifer, conducting geological surveys would provide the necessary data for exploration projects, offer incentives, and establish regional centers to support exchanging knowledge, research, and development.

Saudi Arabia aims to become a regional hub for processing minerals and providing services to them, said Mudaifer, adding that the Kingdom enjoys a strategic location linking three continents, has a world-class infrastructure with three industrial cities dedicated to metallurgical industries, and is first in global road connectivity.

Regarding financial incentives, the Saudi Industrial Development Fund (SIDF) provides up to 75% of loans for industrial and mining projects.

Mudaifer stressed that the Kingdom has everything it needs to be a mineral processing hub and an engine for developing the mining sector in the greater region.

Saudi Arabia is ready to share its knowledge and capabilities with Africa and work together to build a prominent position for the greater region on the global stage, stressed Mudaifer, noting that Africa is critical to global supply chains and the energy transition.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.