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INCREASES SCRUTINY

Ma'aden....reports fall in net profit in the last 2 quarters

Ma'aden reviews spending, expects to stay course

KHOBAR, October 30, 2015

Saudi Arabian Mining Co. (Ma'aden) is reviewing its spending in the wake of low commodity prices but the chief executive of the Arab Gulf's biggest miner expects the company to stick with its project plans.
 
Khalid Al-Mudaifer told Reuters the miner of gold and phosphate and aluminium producer was reviewing projects to ensure "they are really feasible under current market circumstances.”
 
"We are not cancelling any projects but we are increasing scrutiny," he said, noting phosphate was one sector where prices had stabilised and demand was growing.
 
Saudi Arabia as the world's top oil exporter has been hurt by a sharp fall in prices in the last year which has underscored the need to diversify the economy.
 
Mining is an important part of that strategy as it helps develop remote cities and create jobs but metals prices have also suffered, with aluminium touching six-year lows this week.
 
"Everybody is bleeding and we will have to suffer for a while. But where prices will go will depend on what China does with its excess capacity," Mudaifer said.
 
Ma'aden has reported falls in net profit in the last two quarters but has weathered the tough conditions better than many because it has low production costs helped by efficient technology.
 
"Everybody is bleeding and we will have to suffer for a while. But where prices will go will depend on what China does with its excess capacity," Mudaifer said.
 
Among those suffering is U.S. firm Alcoa, Ma'aden's partner in a aluminium project which started operating last year.
 
Ma'aden has finished construction of its Ad Duwayhi mine which will help it double annual gold capacity from its current 150,000 ounces. It aims to produce 500,000 ounces per year, Mudaifer said.
 
Another project in the pipeline the Mansourah Massarrah gold mine.
 
Ma'aden is also awaiting Saudi Arabia's new mining strategy due next year which is expected to call for developing the sector and attracting investment.
 
Saudi Arabia aims to generate SR260 billion ($69.4 billion) in direct GDP from mining by 2035 and to create more than 100,000 jobs through more spent on exploration and developing the sector, Oil Minister Ali Al-Naimi said on Tuesday.
 
"Commodity prices are a challenge that may cause delay in the (ministry's) plan but the plan will be realised," Ma'aden's Mudaifer said. - Reuters



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