AMAK CEO forecasts higher mineral prices, demand in 2023

Yahya AlShangiti, CEO of Al Masane Al Kobra Mining Co. (AMAK)

Yahya AlShangiti, CEO of Al Masane Al Kobra Mining Co. (AMAK), expects an increase in mineral prices and demand, starting from the first quarter of 2023 and throughout the year.

This will be due to the growing demand from renewable energy companies and green industries for minerals, especially copper, CNBC Arabia reported, citing AlShangiti.

Commenting on 2022 financials, the CEO said lower profits were due to the decline in selling prices of copper and zinc sales volume. He pointed out that these declines will be offset by the improvement in prices.

AlShangiti indicated that the company's production will increase with the near completion of the mine expansion project as its trial operation will start next August.

The firm's production of zinc and copper will increase by 80% and 40%, respectively, the top executive said, indicating that the impact of the expansion project will be reflected on the company's performance in 2024.

Touching on the effect of interest-rate hike, AlShangiti said AMAK has only one loan from the Saudi Industrial Development Fund (SIDF), of which nearly SAR 200 million is outstanding and will expire in 2025.

He added that SAR 300-350 million of the subscription proceeds were directed to the mining expansion, and the remaining are used to finance the explorations and outstanding projects.

The firm focuses on expansions inside the Kingdom, as it secured nine exploration licenses in 2023, including five for copper and zinc and two for gold explorations, the top executive said.

He stressed that the company will then focus on internal licenses, especially those close to Najran mines, for ease of exploration.

Regarding the date of starting production at the gold ore mine in Asir, for which the company obtained a license last January from the Ministry of Industry and Mineral Resources, AlShangiti said the exploration takes at least five years to reach commercial quantities from any mine.

Elsewhere, the CEO said the board will convene to discuss the dividend distribution.

AMAK reported a fall of 36% in 2022 net profit to SAR 126.3 million, compared to SAR 197.3 million in 2021, according to data available with Argaam.