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audi Arabia is a powerful ally for the United States. I Its proximity to Africa will enable it to play an increasingly important role in terms of M&A in the mining sector – particularly as the sector has been identified as a critical element of Saudi Arabia’s Vision 2030, a government-led programme aimed at economic diversification away from oil.
It is clear that Saudi Arabia intends to operate across the globe and appears keener to hold equity in mining companies over actually operating them. Its recent invite to participate in the BRICS cluster may also accelerate its entrance into Africa.
As examples, Saudi Arabian Mining Co (Ma’aden) and the Saudi Public Investment Fund (PIF) acquired 10% of Brazilian Vale’s base metal unit and have formed a joint venture called Manara Minerals as vehicle for further acquisitions. Ma’aden also acquired a 9.9% percent stake in Ivanhoe Electric, a U.S. mineral exploration group and is part of an equal joint venture agreement with Barrick Gold for the Jabal Sayid copper mine.
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Manara Minerals has indicated it has over $15bn to invest in mining assets globally over the next few years.
Excerpt CNBC Africa
The support by Africa for Saudi is shown in that over 25 African governments were present at the Future Minerals Forum, held by the Saudi Arabian government, in Riyadh in January 2024.
The UAE is another Gulf player with its eye on Africa. The United Arab Emirates’ International Resources Holdings is the new strategic equity partner in Mopani Copper Mines in Zambia and has also recently teamed up with London Stock Exchange (LSE) listed Jubilee Metals to process significant copper tailing deposits, again in Zambia.
Last but not least, India itself is a force to be reckoned with as China grapples with some of its internal economic challenges which has seen it focus inwardly on its own domestic market. India and Africa have been long-standing trade partners across multiple industries and mining and resources are no different. The total trade in the mining and mineral sector between India and Africa since 2001 stands at $43.13 billion, with Indian net imports around 77%.
Africa is attractively positioned as global powers seek to identify key investment assets on the continent. However, it is important that the continent focuses on two elements.
The first is that Africa has often struggled with a fractious relationship with international investors who have viewed their activities on the continent as extractive by nature. This has limited the economic benefit being realised by the countries and communities who are home to these valuable resources. It is key that this mining is done in a sustainable manner with a focus on long-term benefits.
The second is the importance of developing an environment which is attractive to the best long-term investors, rather than short-term partners. To obtain this financial and investment support, Africa will need to strengthen its governance practices, be more open and consistent in its regulatory frameworks and allow a broader distribution of benefits to its own people.
If Africa can get this right, it will reap the economic benefits for years to come.