Saudi Arabia launches mining fund in effort to reduce oil dependency

Saudi Arabia launches mining fund in effort to reduce oil dependency

Saudi Arabia has launched a mining fund that plans to invest up to $15bn of capital in overseas assets according to people familiar with the details, as the country works to reduce its dependence on fossil fuels.

The venture, 51 per cent owned by Saudi state-owned miner Ma’aden, with the remainder owned by the country’s Public Investment Fund, will take non-operating minority stakes in mining projects internationally, the two companies said on Wednesday.

That will help Saudi Arabia, which is the world’s second-largest oil producer, to secure resources such as iron ore, copper, nickel and lithium for domestic mineral processing and other industrial activities like steelmaking.

The companies said that the fund’s initial capital would be $50mn and the two shareholders would provide just over $3bn “if additional funding is required”, according to a joint statement.

However, two people familiar with the fund’s plans said that Saudi Arabia has publicly downplayed the scale of the investment plans and that the $50mn represented its first year of working capital and the $3bn the amount intended for investment over the next 12 months.

Given the scale of projects in commodity markets, the fund is prepared to deploy more than $15bn of capital for investments over the coming