Saudi state miner makes profit, plans $3.3b capital boost

The shares of Saudi Arabia’s state miner rose as much as 8.3 per cent on Sunday after it announced a profit and plans to boost its capital by $3.3 billion amid a surge in commodity prices.

Maaden, as Saudi Arabian Mining Co. is known, will offer one bonus share for each held, according to a statement. That will double its capital to 24.6 billion riyals ($6.6 billion) and will “boost the future growth plans”, the company said.

Commodity prices have climbed in the past year on booming demand, fueled by trillions of dollars in government stimulus and the global economic rebound from the coronavirus pandemic.

The increase in prices helped Maaden return to profit after two years of losses. It made net income of 5.23 billion riyals ($1.4 billion) in 2021, up from a loss of 209 million riyals a year earlier. It opted against a cash dividend for 2021 “based on the company’s need to continue funding its current and future projects”.

Saudi Arabia has said it wants to attract $170 billion of investment in its mining sector by the end of the decade, exploiting rising global demand for metals crucial to the energy transition. The investment will come from foreign and local firms, including Maaden.

Mining is a crucial part of Crown Prince Mohammed bin Salman’s attempt to diversify the economy from oil. Still, development has been slow since the kingdom announced in 2018 that its minerals were probably worth $1.3 trillion. Saudi Arabia, the biggest Gulf Arab economy, is powered by its extractive industries with most government income coming from crude oil sales.

Maaden is majority owned by the kingdom’s sovereign wealth fund. The stock pared gains to 105 riyals, up 5.3 per cent, by 10:23 a.m. in Riyadh.