Is overseas expansion on the menu for Saudi mining colossus Ma’aden? – by Richard Wachman (Arab News – May 6, 2018)

LONDON: Saudi mining colossus Ma’aden is riding a wave of investor confidence as profitability is driven by robust commodity prices, growth in production across its minerals suite of phosphate, gold, copper and aluminum, as well as a cost-cutting program that has strengthened the balance sheet.

Now, there is market chatter that the next chapter of the growth story could be overseas. Some say Ma’aden will one day follow SABIC, KSA’s petrochemicals champion, by expanding its footprint in growth segments abroad, although its core business will always be at home.

“At the moment there is plenty of growth to go for in Saudi,” said Yousef Husseini, a broker at EFG Hermes in Cairo. “But in the longer term, the company could shift its focus to global expansion similar to what SABIC has done in the last couple of decades as local market opportunities decline.”

Husseini said: “As Ma’aden de-levers its balance sheet and starts generating substantial free cashflow, that could potentially give it more resources to pursue inorganic expansion and diversify its asset base.”

For those who lift the bonnet to look inside Ma’aden’s KSA mining operations, they will find the company is already involved with international metals companies via joint ventures on its home turf. That allows it to look at global developments — and, perhaps, future opportunities — via business partnerships with international firms, particularly North American ones.

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