Saudi Arabia's Ma'aden awards contract for $880m gold mine project

Mansourah-Massarah is expected to reach full capacity by 2023 and will help Ma'aden produce 1 million ounces of gold a year by 2025

Al Amar gold mine, southwest of Riyadh. Saudi Arabia currently has six gold mines owned by the Ma'aden Gold and Base Metals Company. Reuters

Riyadh-listed Saudi Arabian Mining Company, or Ma’aden, has awarded a contract to Jac Rijk Al-Rushaid Contracting to provide mining services at its Mansourah-Massarah gold mine as it looks to boost gold production.

Jac Rijk Al-Rushaid, which already works on Ma’aden’s Ad Duwayhi and As Suq gold mines, will provide services such as drilling, scaling and ore control, Ma’aden said yesterday. It did not disclose the value of the contract.

Work is under way at the $880 million Mansourah-Massarah mine, one of Ma’aden’s largest gold projects and the latest addition to subsidiary Ma’aden Gold and Base Metals Company's six-mine portfolio.

“This investment represents Ma’aden’s commitment to maximising the mining industry’s contribution to the development of local content,” the company said.

“In 2020, 74 per cent of Ma’aden’s supply chain was placed with local suppliers and we are now pushing beyond that number.”

Once the Mansourah-Massarah site reaches full capacity, which is expected by 2023, it should contribute a quarter of Ma’aden’s production target of 1 million ounces of gold a year by 2025.

Ma’aden, which is majority-owned by the kingdom’s Public Investment Fund, is central to Riyadh’s ambitions to increase the economic contribution of the kingdom’s non-oil sectors.

Expansion of the country’s industrial and mining sectors is an important part of Saudi Arabia’s Vision 2030 plans.

The kingdom last year approved a mining law to boost foreign direct investment in the sector. The law, which came into effect in January, will help the country to explore mineral resources worth about 5 trillion riyals ($1.3tn), with 20 million ounces of gold reserves below ground, according to Invest Saudi.

Saudi Arabia currently accounts for 37.9 per cent of the Middle East and Africa’s $16 billion metals and mining industry market.

Ma'aden's gold portfolio currently accounts for about 20 per cent of its revenue. The company reported a net profit of 761.15m riyals for the first three months of the year on revenue of 5.45 billion riyals.

“The countercyclical commodity was an important factor in Ma’aden’s stable performance throughout the pandemic and will remain central to its operations in the future,” the company said.