Arab News, Aug 11, 2022 | Muharram 13, 1444
Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer
RIYADH: Saudi Arabian Mining Co., known as Ma’aden, ranked fifth among the top
share price gainers this year on the Saudi stock index TASI buoyed by strong
results and a thriving mineral sector.
Ma’aden’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on
Aug. 4, surging 53 percent.
A booming mineral industry fueled this rise in Saudi Arabia as, in recent years,
the Kingdom has shifted its focus toward discovering and extracting minerals and
metals to support its mining industry.
“There is over $3-trillion worth of minerals to be exploited in the Kingdom,
which opens huge opportunities for minerals companies,” said Peter Leon, a
partner in Johannesburg-based law firm Herbert Smith Freehills.
Leon advised the Kingdom’s Ministry of Industry and Mineral Resources on
drafting its new mining law.
Khalid Almudaifer, vice minister of MIMR, told Arab News that the ministry had
established the mining sector’s infrastructure, allowing the Kingdom to leapfrog
in both mining and sustainable mining.
As the Kingdom revealed that it could be sitting on untapped mineral deposits
worth $1.3 trillion, Almudaifer added that the $1.3 trillion estimate of
untapped minerals is only a starting point and that underground minerals are
likely worth even more.
In March, the state-owned firm announced its plans to increase production
capacity and invest in exploration to tap into $1.3 trillion mineral reserves, a
reason economist Ali Alhazmi believes that made Ma’aden shares lucrative,
further leading to high performance.
Speaking to Arab News, Alhazmi explained that one of the reasons could be
attributed to Ma’aden turning into probability last year, reaching SR5.2
billion, compared to SR280 million in losses in 2020.
The other reason could relate to its plan to double its capital by distributing
three shares to shareholders, which has attracted investors to buy Ma’aden
shares.
According to Abdullah AlRebdi, CEO of Rassanah Capital, the beginning of the
third line of its ammonia production also helped the company’s fortune,
especially when there was a considerable shortage of raw material for
fertilizer. It is worth mentioning that the ammonia plant expansion is set to
add over 1 million tons of ammonia production to reach 3.3 million tons, making
Ma’aden one of the largest ammonia producers east of the Suez Canal.
Ma’aden reported a 185 percent surge in profit during the first quarter of 2022,
hitting SR2.17 billion, amid a jump in commodity prices.
Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing
to its expansion plans and gold mining projects in Mansoura and Masarrah.
“By the end of 2022, Ma’aden will achieve SR9 billion in profit, a growth of 50
percent from 2021,” Alhazmi predicted.
As one of the fastest-growing mining companies worldwide, Ma’aden has a market
capitalization of over SR100 billion and is one of the Kingdom’s 10 most
prominent players.