Saudi Gazette report

RIYADH — Saudi Arabia is poised for a pivotal economic mission as Minister of Industry and Mineral Resources Bandar Alkhorayef and Vice-Minister for Mining Affairs Khalid Al-Mudaifer prepare to visit Brazil and Chile.

This high-profile visit aims to strengthen bilateral relations, attract investments to Saudi Arabia, and explore mutually beneficial opportunities in the mineral and industrial sectors.

From July 22-30, the delegation will tour major cities in Brazil — São Paulo, Brasília, Rio de Janeiro — and Santiago in Chile. This trip aligns with Saudi Arabia's Vision 2030, focusing on diversifying the economy and establishing the Kingdom as an industrial and economic leader.

During the visit, the delegation will hold high-level meetings with senior officials from various ministries in both countries and engage with leading global companies in mining, food processing, aviation, and other strategic sectors.

In Brazil, key meetings are scheduled with the Brazilian Mining Association (IBRAM), Vale, Minerva Foods, JBS, and BRF SA. In Chile, Alkhorayef will meet with the Minister of Mining and leaders from The Federation of Chilean Industry (SOFOFA), as well as mining giants Codelco and Antofagasta.

Brazil and Chile are recognized for their extensive mineral resources. Brazil, with a longstanding bilateral relationship with Saudi Arabia, has been a key partner in energy products, minerals, agricultural products, and fertilizers.

Saudi Arabia has several active investments in Brazil, including a 10% stake in Vale Base Metals through Manara Minerals, a joint venture between the Public Investment Fund (PIF) and Ma’aden. Additionally, the Saudi Agricultural and Livestock Investment Co. (SALIC) has acquired a 10.7% stake in BRF, a leading poultry producer.

Chile, as the second-largest producer of lithium—a crucial component for electric vehicle batteries—presents opportunities for collaboration in EV production and renewable energy. This visit will enable knowledge exchange and technical cooperation in these areas. In June 2024, Almar Water Solutions, part of Saudi Abdul Latif Jameel Group, expressed interest in partnering with Chilean mining giant Codelco on its Maricunga lithium project.

Saudi Arabia's geological wealth is a significant attraction for investors, with 80 years of accessible geological data supporting informed investment decisions. Recent mapping has increased the estimated value of Saudi Arabia's mineral reserves from $1.3 trillion to $2.5 trillion.

The revamped Mining Investment Law of 2019 has bolstered the Kingdom's global standing, making it a leading mining jurisdiction as noted by the Mining Journal World Risk Report 2023. The Kingdom has been recognized for its low legal and financial risks and efficient permitting process.

The updated law includes competitive incentives such as 75% co-funding for CAPEX, a five-year royalty fee exemption, significant discounts for local downstream processing, a 20% corporate tax rate, and 100% foreign direct business ownership. The Exploration Enablement Program (EEP), launched in April 2024 with a $182 million allocation, aims to de-risk investments, accelerate exploration, and expand local talent in the mineral and mining sector.

Saudi Arabia’s young population, strategic location, robust infrastructure, and attractive investment incentives position it as a prime investment destination. The visit to Brazil and Chile is expected to result in significant agreements that will enhance bilateral relations and promote mutual growth through shared investments, sustainable development, and economic diversification in the mining and industrial sectors.