Saudi Ma’aden acquires 25.1% stake in Ma’aden JV for $1.1bn

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Saudi Arabian Mining Company, known as Ma’aden, said on Sunday that it has agreed to acquire US aluminium maker Alcoa’s stakes in a bauxite facility and an aluminium smelter for $150m (SAR563m) in cash and SAR3.6bn of stock in the Riyadh-based miner.

“Alcoa will transfer its ownership in Ma’aden Aluminium Company and Ma’aden Bauxite and Alumina Company to Ma’aden. In exchange, Alcoa will receive cash and newly issued Ma’aden shares, increasing its stake in the Saudi Arabian mining company,” the Saudi mining firm said in a statement.

The deal, which is expected to be completed in Q1 2025, is subject to regulatory and corporate approvals.

Ma’aden will wholly own its aluminium business, and Alcoa will hold a 2.2 per cent stake in the state miner once the deal is completed.

“The transaction simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia and provides greater financial flexibility to Alcoa, an important part of improving our long-term competitiveness,” said William F. Oplinger, Alcoa’s president and CEO.

Alcoa formed a joint venture with Ma’aden in 2009 to develop a $10.8bn bauxite mine, refinery, smelter, and other facilities as part of Saudi Arabia’s push to diversify its economy beyond oil production and exploit the country’s other natural resources.

“As we continue to grow our aluminium business, streamlining the management structure of this business is an important step forward for Ma’aden as we prepare for greater future growth and continue to build the mining sector as the third pillar of the Saudi economy,” said Bob Wilt, CEO of Ma’aden.

Last year, Ma’aden joined forces with the Public Investment Fund to form a company that will be funded with as much as SAR11.95bn to invest in mining assets internationally. The venture, known as Manara Minerals, signed its first deal in August 2023 involving the acquisition of a 10 per cent stake in Vale’s base metals unit at an implied enterprise value of $26bn.

Ma’aden discovered multiple gold deposits south of its existing Mansourah Massarah gold mine, indicating the potential to expand gold mining in the kingdom.

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