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Saudi investment fund Manara Minerals plans to set up a metals trading division for its interests in foreign mining companies, its acting chief executive said on Thursday.
Manara was established as part of the kingdom’s efforts to diversify its economy from oil, tapping its vast resources of phosphate, gold, copper and bauxite while buying minority stakes of up to 20% in assets overseas. It is a joint venture between state-owned miner Ma’aden and the Public Investment Fund (PIF).
“We anticipate Manara having an arm,” Robert Wilt, Manara’s interim managing director, told Reuters in an interview on the sidelines of the Future Minerals Forum (FMF) mining meeting in Riyadh.
“Our fist phase of setting up the company is get the investment rolling, but all of these investments are predicated on an offtake… so there is going to be some level of trading to manage the books of offtake minerals we have,” he added.
In an offtake deal, a buyer usually agrees to buy a portion of the producer’s future output.
“We don’t plan to compete with Glencore or Trafigura, our vision is simply to manage our own portfolio,” Wilt said.
Mining company Glencore’s business division, which includes coal, oil, liquefied vegetable fuel and similar products, and metals, posted record profits of $6. 4 billion in 2022.
Manara’s first major foray was a deal to become a 10% shareholder in Vale Base Metals, a $26 billion spin-off of copper-nickel Vale, last July.
Wilt, who is also chief executive of Ma’aden, said the fund has a strict mandate to source iron ore, lithium, copper and nickel as a component of Saudi Arabia’s plan for a metallurgical hub.
Manara is in talks to get a stake in Pakistan’s Reko Diq mine, Wilt added, which is ultimately owned partly through Toronto-listed Barrick Gold and partly through the governments of Pakistan and Balochistan province. Barrick considers the mine to be one of the largest underdeveloped. copper and gold areas in the world.
“Manara is looking at a multitude of opportunities following the conclusion of the deal with Vale, and Reko Diq is one of them,” he said.
(By Clara Denina and Divya Rajagopal; editing by Veronica Brown and Emelia Sithole-Matarise)