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.



Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
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Saudi Transport, Logistics Sector Set for 10% Growth in Q2

An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)
An investor monitors a trading screen at the Saudi financial market in Riyadh. (AFP)

As Saudi companies start reporting their Q2 financial results, experts are optimistic about the transport and logistics sector. They expect a 10% annual growth, with total net profits reaching around SAR 900 million ($240 million), driven by tourism and an economic corridor project.

In Q1, the seven listed transport and logistics companies in Saudi Arabia showed positive results, with combined profits increasing by 5.8% to SAR 818.7 million ($218 million) compared to the previous year.

Four companies reported profit growth, while three saw declines, including two with losses, according to Arbah Capital.

Al Rajhi Capital projects significant gains for Q2 compared to last year: Lumi Rental’s profits are expected to rise by 31% to SAR 65 million, SAL’s by 76% to SAR 192 million, and Theeb’s by 23% to SAR 37 million.

On the other hand, Aljazira Capital predicts a 13% decrease in Lumi Rental’s net profit to SAR 43 million, despite a 44% rise in revenue. This is due to higher operational costs post-IPO.

SAL’s annual profit is expected to grow by 76% to SAR 191.6 million, driven by a 29% increase in revenue and higher profit margins.

Aljazira Capital also expects a 2.8% drop in the sector’s net profit from Q1 due to lower profits for SAL and Seera, caused by reduced revenue and profit margins.

Mohammad Al Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the sector’s continued profit growth is supported by seasonal factors like summer travel and higher demand for transport services.

He predicts Q2 profits will reach around SAR 900 million ($240 million), up 10% from Q1.

Al Farraj highlighted that the India-Middle East-Europe Economic Corridor (IMEC), linking India with the GCC and Europe, is expected to boost sector growth by improving trade and transport connections.

However, he warned that companies may still face challenges, including rising costs and workforce shortages.