Maaden, PIF sign JV agreement to invest in international mining assets

Maaden headquarters

Saudi Arabian Mining Co. (Maaden) signed, on Jan. 10, a Joint Venture Agreement with the Public Investment Fund (PIF) to establish a new company that will invest in mining assets internationally to secure strategic minerals.

In a statement to Tadawul, Maaden said it will hold 51% of the new company and the PIF will hold the remaining 49% stake. The new company’s initial paid-up capital will stand at SAR 187.50 million. Maaden will finance its share of this investment, totaling SAR 95.63 million, from its own resources.

Maaden and the Kingdom’s sovereign wealth fund agreed that if additional funding is required as the business of the new company develops, both entities shall fund the new company with up to SAR 11.95 billion through capital increases or otherwise as agreed between Maaden and PIF. Accordingly, the mining firm’s maximum contribution in the new company will reach SAR 6.10 billion, unless otherwise agreed in the future.

Maaden added that the JV agreement stipulates customary clauses with condition precedents, which must be fulfilled prior to establishing the new company and other clauses in relation to the management, funding, exit mechanics, restrictions on transfer of shares and other customary clauses.

The new company’s strategy will initially be to invest in iron ore, copper, nickel, and lithium sectors as a non-operating partner taking minority equity position. This will provide physical offtake of critical minerals to ensure supply security for domestic minerals downstream sectors and position Saudi Arabia as a key partner in global supply-chain resilience.

The new company is expected to have a positive overall financial impact on Maaden in the long term. Maaden will announce any material developments in this regard later.

PIF is a related party as it is the largest shareholder in Maaden (with 67.18% ownership). Additionally, the following board of directors have indirect interest as representatives of the PIF, namely: Yasir Al-Rumayyan, Khalid Almudaifer, Mohammed Al-Qahtani, Richard O'Brien, Ganesh Kishore and Sofia Bianchi. Therefore, this transaction shall be subject to vote by Maaden shareholders. The meeting date will be scheduled later, in accordance with the relevant laws and regulations, the statement concluded.