Saudi mining sector needs smaller, nimble firms to grow metals industry: Azlan Bros official
RIYADH: Saudi Arabia’s mining sector needs to create smaller and more flexible upstream and downstream firms to spur innovation in the metals industry, according to the CEO of the mining exchange business within Ajlan Brothers.
In an interview during the second day of the Future Minerals Forum in Riyadh, Laman Ruten said that to meet the sector’s growing demand, the kingdom should consider some of its employees forming their own service companies because smaller, more agile There are companies. more economical.
“Smaller companies are often better suited for jobs that require a more agile approach, lower overheads and a wider variety of risk appetite,” explained the CEO of the KSA Mining and Metals Exchange.
These small companies are usually founded by people who worked for large international companies, so they developed skills and often have decades of experience. They are also aware of the appropriate level of quality they are expected to provide, Ruten elaborated.
“Over the last ten years junior miners accounted for 25 per cent of exploration expenditure in Australia and they accounted for 75 per cent of discoveries,” he revealed.
However, these smaller companies do not have sufficient capital. This is why it is important to create space for these smaller companies to raise public funds, the CEO stressed.
Currently, the Saudi Stock Exchange, also known as Tadawul, has two platforms: the main market for large companies – called TASI – and another parallel market for smaller companies – called Nomu. .
“So you need an exchange that allows these smaller companies to list in the same way that smaller mining companies can now list on the main market in South Africa, Canada and Australia but it is impossible to list on TASI,” Rutten said. shed light on
Yet, for this to happen, companies, investors and financial intermediaries need to go through an educational process that better prepares them to list on the main market.
“For investors, there needs to be a more long-term perspective on investing, portfolio thinking, if you will — it’s again a huge educational process. For regulators who are going to be dictating what instruments are to be offered to investors. It also requires a completely different way of thinking,” concluded Rutten.
The second edition of the Future Minerals Forum began on 10 January with a ministerial roundtable, followed by two days of meetings and speeches featuring more than 200 speakers from around the world.
Topics of discussion include sustainability, the future of mining and the energy transition, as well as the contribution of minerals to the development of society, digital transformation and integrated value chains.
The platform comes as Saudi Arabia is believed to be on track to become a “global leader” in the mining industry thanks to the kingdom’s “welcoming investment climate,” according to a study by the Payne Institute for Public Policy at the Colorado School of Mines. As per the report. US, released in December.
According to the analysis, the Kingdom is currently processing 145 exploration license applications sent by foreign companies.
According to 80-year-old geological surveys, the Kingdom is believed to have an estimated reserve of untapped mining potential worth $1.3 trillion.
Abdullah Al-Shamrani, CEO of the Saudi Geological Survey, said in September 2022, however, that with rising prices for valuable minerals, especially gold, copper and zinc, the true value of the Kingdom’s current mineral wealth could double that figure. .