Ivanhoe Electric Inc. (NYSE American: IE) (TSX: IE) and the Saudi Arabian firm Ma’aden have officially begun exploration activities in Saudi Arabia through their 50/50 joint venture company.
The joint venture, established earlier this year, aims to explore approximately 48,500 km2 of the underexplored Arabian Shield, focusing on discovering copper, gold, silver and other electric metals.
Ivanhoe Electric will operate during the exploration phase, with Ma’aden set to assume operatorship if an economically viable deposit is identified for further development.
The JV received around US$66 million in initial working capital from Ma’aden’s US$127.1 million investment in Ivanhoe Electric common stock. With Ma’aden becoming a 9.9 per cent shareholder in Ivanhoe Electric, subsequent investments totaling US$20.4 million were made in October.
“We are deploying Ivanhoe Electric’s proprietary Typhoon surveying technology, supported by the combined expertise of our joint exploration and geophysical teams on the ground, to find new sources of critical minerals and support Vision 2030, which aims to position mining as a third pillar of the Saudi Arabian economy,” Ivanhoe Chairman Robert Friedland said.
The joint venture’s first Typhoon survey is underway via the Al Amar Exploration Licenses, specifically around Ma’aden’s Al Amar Mine. Future exploration efforts, slated for 2024 and 2025, will target the Wadi Bidah and Bir Umq Belts.
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Saudi Arabia wants to move away from oil dependence
Saudi Arabia has demonstrated a concerted effort to explore precious metals in 2023, aligning with its broader economic diversification goals under the Vision 2030 initiative.
In addition to the joint venture exploration activities between Ivanhoe Electric and Ma’aden, the country has announced plans to auction five new mining exploration licenses in 2023, covering areas rich in copper, zinc, lead and iron.
Saudi Arabia’s eagerness to diversify its economy away from oil dependence is evident, with a focus on exploiting its vast, untapped mineral resources, including phosphate, gold, copper, uranium, and bauxite, estimated to be valued at a significant 5 trillion riyals (US$1.33 trillion).
Manara Minerals, backed by Saudi Arabia’s Public Investment Fund, recently entered into a $3.4 billion agreement with the leading Brazilian firm Vale S.A. (NYSE: VALE) to grow the company’s energy transition metals business. Under the agreement, Manara and the country’s public investment fund will acquire 10 per cent of Vale’s base metal unit Vale Base Metals.
The country’s intention to take minority stakes in global mining assets and build a metals-processing industry ensures a steady supply of strategic minerals while creating a more appealing environment for international miners.
The recently enacted Mining Law not only supports ongoing exploration projects –like the joint venture between Ivanhoe Electric and Ma’aden– but also marks a crucial step towards achieving economic sustainability and reducing dependency on oil revenues.
