Maaden records huge production volumes in various segments: CEO

Robert Wilt, CEO of Saudi Arabian Mining Co. (Maaden)

Saudi Arabian Mining Co. (Maaden) has recorded huge production volumes across its various segments, said CEO Robert Wilt.

Commenting on the company's financial results for the fourth quarter of 2023, the top executive added that the company achieved record annual levels in phosphate production, which contributed to mitigating the impact of the decline in commodity prices during the year.

The company has also made remarkable progress in its strategic projects, such as the Phosphate 3 project, and has completed the final stages of trial operations for the Mansourah-Massarah gold mine, which will greatly support its future output levels of phosphate and gold, Wilt said.

The CEO pointed out that the company is currently implementing one of the largest prospecting and exploration programs in the world, to capitalize on the Kingdom's mineral resources, which are estimated at nearly $2.5 trillion.

He added that Maaden has announced the discovery of huge potential gold resources south of the Mansourah-Massarah mine, which will put it at the forefront of efforts to search for gold around the world.

Wilt expects the company to intensively expand its prospecting and exploration activities in 2024.

Regarding the company’s projects outside the Kingdom, the joint project with the Public Investment Fund (PIF) to establish Manara Minerals will provide the desired framework for investment in global mining assets and ensure access to strategic minerals that will undoubtedly support the sustainable growth of the Kingdom.

The company made its first investment during the year in Vale and will make more similar investments during 2024 and beyond.

Furthermore, Maaden is confident that its strategy will continue to achieve strong levels of growth in the future, which will contribute to achieving enhanced value for shareholders and will support strategies to diversify the Saudi economy, said the top executive.

The global phosphate market is expected to remain stable in 2024, as demand is likely to pick up due to improved purchasing power and lower inventories in major markets, which will offset the return of supply to the market throughout the year.

Demand for ammonia is expected to improve, driven by the increase in the volume of production of phosphate and nitrogen fertilizers versus increased supply from the US and other markets, according to Maaden.

Maaden also expects that the aluminum market will witness stability in 2024, following the slowdown in global manufacturing activities, backed by improved demand from North America and Europe, in addition to expectations of a recovery in manufacturing activities in China.

It expects demand for flat rolled aluminum products will gradually improve due to the completion of inventory reduction processes and the growth witnessed in the electric vehicles and packaging markets.

In addition, gold production operations have intensified in the Mansourah-Massarah mine, and the company expects the mine to achieve its capacity in 2024. Initial building and construction works are underway in the Phosphate Complex 3 project, which will contribute to adding more than 1.5 million tons of production per year upon completion.

Prices of gas and diesel inched higher starting in the first quarter of 2024, which will likely boost the total annual sales costs by about 3.2%, according to the latest audited annual financial statements.

The company highlighted its keenness to continuously monitor the current conditions in the Red Sea region, as it is working closely with its customers to minimize any potential impacts.

The completion of a 10% stake in Vale by Manara Minerals remains on track for the first quarter of 2024, subject to regulatory approvals, it said.

Maaden also explained that net profit for 2023 was positively affected by an amount of SAR 144 million thanks to lower depreciation costs as a result of updating estimates of the lives of assets and their residual value, as mentioned in the financial statements, adding that this adjustment will also positively affect net profit for 2024 by about SAR 1.2 billion.

According to data available to Argaam, Maaden posted a net profit of SAR 1.57 billion in 2023, an 83% drop from SAR 9.31 billion a year earlier. Q4 profit amounted to SAR 890.4 million.