Diversification Push: Saudi Arabia Considers New Mining Index

Saudi Arabia is considering setting up a new metals and mining stock exchange index as it looks to expand its resources sector to diversify away from hydrocarbons, a senior government official said on Friday.

Mining Minister Bandar bin Ibrahim Al-Khorayef said in an interview in Sydney that his team met with Australian counterparts to learn more about a mining index, similar to Australia’s ASX 300 Metals & Mining sub-index that lists metals and mining firms including producers of gold, steel and precious metals.

“It is something we are studying … but we have not made up our mind if it would be successful,” Al-Khorayef said.

“We have a secondary stock market in Saudi…its still evolving. We want to see if its better to have something for mining,” he said.

He did not say how many companies would potentially be included in the index.

Saudi Arabia’s stock exchange consists of the Tadawul main market and a parallel market that companies can join with fewer reporting requirements.

Riyadh’s efforts to build an economy that is not dependent on oil include a shift toward mining to explore the country’s untapped reserves of resources from copper to phosphate and gold.

The minister is at the International Mining and Resources Conference in Sydney this week to drum up investment interest.

He said on Wednesday that the kingdom plans to award over a dozen mining exploration licenses to international investors.

Al-Khorayef said the separate index for mining would help put more focus on Saudi’s mining industry, and will enable them to benchmark it with markets like Australia, the UK and others.

“The idea is to help the sector grow faster. We definitely see a need for small and medium firms in the sector to access capital through capital markets,” he said.

Saudi’s stock markets are currently dominated by real estate, energy and trading firms, while there are a just a small number of mining companies with the state miner Saudi Arabian Mining Co, the Gulf’s largest miner, leading the pack.

“The whole idea (of a mining index) is to ensure that we have something that financing companies or financial institutions like banks can have good visibility on,” he said.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

For Advert Placements, Email: info@ln247.news

Latest Articles