Main firms in Oman, Abu Dhabi and Saudi Arabia are planning to launch metallic buying and selling firms, because the area faucets into rising demand for metals whereas it appears to diversify past oil and fuel.
Abu Dhabi-based Worldwide Assets Holding, a mining firm that’s a part of a conglomerate chaired by highly effective Emirati royal Sheikh Tahnoon bin Zayed al-Nahyan, has already constructed out a 60-person buying and selling unit to deal with vitality and metals.
Minerals Improvement Oman, the state-owned mining firm, can also be within the means of hiring a prime government to steer a 25-person buying and selling workforce, in response to MDO’s chief government, Mattar Al Badi.
The buying and selling plans come as many oil-dependent Gulf states search to place themselves within the world provide chain for the metals wanted for the vitality transition, corresponding to copper, lithium and iron ore.
“These nations need to diversify from oil, and they’re exploring each alternative to take action,” mentioned JF Lambert, founding accomplice of consultancy Lambert Commodities.
Lots of the world’s largest oil merchants, corresponding to Vitol, Mercuria and Gunvor, have additionally lately expanded their metallic buying and selling operations.
Over the previous 5 years, commodity buying and selling exercise has step by step shifted away from the standard hubs of London and Geneva in direction of the Center East, notably Dubai, the place there was a surge of latest buying and selling workplaces.
Oman, whose oil manufacturing is modest in contrast with neighbouring Saudi Arabia and UAE, will set up a buying and selling firm beneath MDO, which has lately revived copper extraction from its Lasail mine after a three-decade hiatus.
Al Badi, MDO chief government, mentioned the buying and selling firm would assist organise Oman’s fragmented exports of chromite and gypsum, and assist the nation get a greater worth for its sources.
“Oman is likely one of the largest nations in exporting gypsum, however the market shouldn’t be organised,” Badi mentioned. A buying and selling firm would assist Oman “make sure that we maximise the margin” from its items, he added.
MDO is in talks with six worldwide commodities companies — Trafigura, Glencore, Traxys, IXM, Mercuria and Gunvor — over a possible offtake association for its processed copper and partnership in its buying and selling unit.
In Abu Dhabi, one of many world’s prime 10 oil producers, IRH has already employed a buying and selling workforce in oil and fuel, in addition to metals, and has been in discussions about potential buying and selling alternatives with worldwide merchants, together with Mercuria.
IRH mentioned it was buying and selling commodities from third events throughout base metals, vitality merchandise and iron ore, in addition to growing a “proprietary buying and selling portfolio spanning world commodities and structured transactions”.
A part of nationwide safety adviser Sheikh Tahnoon’s sprawling Worldwide Holding Firm, IRH burst on to the mining scene in late 2023, agreeing to purchase a 51 per cent stake in Zambia’s Mopani copper mine for $1.1bn.
In one other signal of the Gulf’s pivot in direction of metals and minerals, Abu Dhabi upped its wager on mining final week. Sovereign investor ADQ introduced a $1.2bn three way partnership with specialist metals investor Orion Assets, which is able to deal with copper, iron ore and different supplies. Either side will initially make investments $600mn.
Philip Clegg, managing accomplice of the three way partnership, mentioned on prime of shopping for stakes in miners, the investments have been being made to safe the long-term provide of essential minerals.
The Gulf was “turning into a way more dynamic place, and far more strategic in the way in which that gamers throughout the area are interested by the right way to put money into the sector”, he mentioned.
Saudi Arabia, the area’s largest economic system and the world’s largest oil exporter, is investing closely in growing its home mining sector, and the federal government sees mining as a 3rd pillar of the economic system, alongside oil and petrochemicals.
State-owned miner Ma’aden and sovereign Public Funding Fund have a collectively managed mining funding fund, Manara. Bob Wilt, Ma’aden chief government, mentioned final 12 months that Manara was planning to construct a buying and selling workforce, and that Manara’s goal was to “safe offtake of essential minerals” to fulfill the wants of Saudi Arabia.
Nonetheless, in response to a number of merchants, Manara couldn’t obtain metals produced in 2024 by Vale Base Metals, wherein it owns a ten per cent stake, as a result of its buying and selling workforce was not prepared but.
Manara and Mercuria declined to remark.
