Maaden CEO says average selling prices saw ‘very strong’ rise, projects on track

Logo of Maaden OR Abdulaziz Al Harbi, CEO of Maaden

Saudi Arabian Mining Co.’s (Maaden) positive financials were driven by a year-on-year (YoY) rise in sales, improved plant performance and output, addition of new capacities, as well as a very high rise in average product prices, Chief Executive Officer (CEO), Abdulaziz Al Harbi, told Argaam in a telephone interview.

Phosphate and aluminum prices have hit record levels for decades, Al Harbi said, explaining that product contribution of aluminum, phosphate and gold to the second-quarter revenue stood a 39%, 49% and 12%, respectively.

Commodities witnessed strong demand as phosphate saw a very strong demand in Latin America, Asia, South East Asia, and the east and west of Suez Canal, in addition to the demand spurred by the increase in agricultural products in the US and Europe.

Meanwhile, demand for fertilizers remained strong. Aluminum also witnessed pent-up demand in China and other countries worldwide, Al Harbi affirmed, noting that supply and demand was highly strong.

Maaden’s 2016 debt repayment plan is based on three pillars, namely raising production to the maximum level without impacting the safety of employees, society and environment; converting debt from financing projects to the company, so as to mitigate pressures on Maaden; studying the capital structure of each project going forward to avoid exceeding the date ratio.

Elsewhere, Al Harbi noted that Maaden’s projects are on track, but they were mostly hit by the COVID-19 pandemic, as some equipment are manufactured in India and South Africa, affirming Maaden mitigated the negative impact on work progress.

Moreover, construction of the company’s third ammonia plant in Ras Al-Khair industrial City is scheduled for completion in Q4 2021 and its operations will begin in the first quarter of 2022.

The cost of the Mansourah Massarah gold mines, which will have a production capacity of up to 260,000 ounces, is estimated at $880 million.

Al Harbi concluded that demand for fertilizers will remain strong and production is likely to continue at the same high levels. Aluminum demand is also expected to continue, amid a balance between supply and demand at the end of this year.

The Saudi mining firm urned to a net profit after Zakat and tax of SAR 1.865 billion for the first half of 2021, against a net loss of SAR 787.4 million a year earlier. It also swung to a net profit after Zakat and tax of SAR 1.104 billion, against a net loss of SAR 434.14 million in the year-ago period, Argaam reported.