RE: Kefi!2 Apr 2024 08:07
Https://financialpost.com/commodities/mining/theres-a-new-force-sweeping-through-the-global-mining-sector-and-it-has-huge-firepower (From FT article just a few extracts of article)
The Mopani deal finalised at the end of March marks a new force sweeping through the global mining sector. Gulf nations, hungry to diversify their economies beyond fossil fuels, are redirecting petrodollars to secure copper, nickel and other minerals used in power transmission lines, electric cars and renewable power. Beyond the UAE, chief among them is Saudi Arabia which wants mining to contribute $75bn to its economy by 2035, up from $17bn. Oman has started construction of what could be the world’s largest green steel plant that plans to use iron ore from Cameroon, while the Qatar Investment Authority, the gas-rich state’s sovereign wealth fund, is now Glencore’s second-biggest shareholder.
The region has huge potential to create a major mining industry,” says Tom Harley, managing director of Dragoman, a mining advisory working with Gulf nations. “The Saudis are so palpably ambitious: even if they achieve 60 per cent of what they are after, then it will be enormous.” For resource-rich nations in Africa, Asia and Latin America, the entrance of these middle powers into the critical minerals battleground is a welcome alternative to decades of exploitative arrangements underpinned by either western colonialism or Chinese debt.
Despite this, Washington has welcomed the Gulf’s expanding role in mining for helping to break Beijing’s monopoly over processing critical minerals. The US has been actively brokering Saudi, Emirati and Qatari investment in riskier jurisdictions, such as the Democratic Republic of Congo, where western companies struggle to enter, in order to keep China out, according to executives from mining companies and trading houses, as well as a senior US government official.
“The Middle East is looking to diversify and has a war chest,” says Richard Blunt, partner at Baker McKenzie, the law firm that represented Zambia on the IRH deal. “They’ve got this massive advantage as they can do government-to-government deals and have patient capital yet come without the diplomatic pinch involved in choosing between Chinese and western investors.” Under Crown Prince Mohammed bin Salman’s “Vision 2030” to modernise Saudi Arabia’s economy, mining and minerals processing are earmarked to become the third industrial “pillar” next to oil and gas and petrochemicals.
In Zambia, as well as its Mopani mine, IRH has announced plans to bid for a stake in the Lubambe copper mine, owned by China’s JCHX Mining. IRH intends to take a controlling stake in Konkola Copper Mines, which the government handed back to India’s Vedanta in September, according to people familiar with IRH’s strategy. Vedanta says that it wants to remain majority owner but would be open to selling a 20 per cent stake.
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