Gulf nations are pushing aggressively into mining in a bid for diversification

The gulf is headed toward a new mining era: Gulf states are investing heavily in mining copper, nickel, and other minerals as they look to secure the resources needed to produce clean energy and diversify their economies beyond oil, the FinancialTimes writes. With fossil fuels reeling in some USD 400 bn in annual revenues for Gulf nations, the mining industry makes for a promising pivot as the world transitions away from hydrocarbons. “The region has huge potential to create a major mining industry,” the salmon-color paper quotes Tom Harley, managing director of mining advisory Dragoman, as saying.

Who is doing what? Saudi Arabia is working to raise the mining sector’s share of revenues to USD 75 bn by 2035 from USD 17 bn currently, while the UAE is pursuing a host of government-to-government partnerships in minerals with a focus on Africa. Oman has started building what is expected to be the world’s largest green steel plant, with plans to use iron ore from Cameroon. And Qatari wealth fund QIA has snapped up a sizable stake in Swiss commodities and mining giant Glencore.

Some of these ventures are right here at home: Saudi Arabia in January inked an MoU with the Egyptian government to boost mining cooperation and promote the role of the private sector in both countries’ mineral resources industry. Meanwhile, the UAE has a robust network of ports and logistics centers across Africa that made Dubai a “key precious metals trading hub.”

Remember: Emirati port operator DP World recently broke ground on its USD 80 mn logisticszone in Ain Sokhna, while Abu Dhabi Ports has been pushing aggressively into Egypt’s maritime logistics industry.

A win for all: Resource-rich nations in Africa, Asia, and Latin America welcome the entry of Gulf states into their mining sectors as an alternative to decades of colonialist enterprises by the West and a way to avoid ongoing US-China tensions over their minerals. The push also sits well with the US, which views it as a way to weaken Beijing’s monopoly on minerals.

THE MARKETS THIS MORNING-

Major Asian benchmarks are in the green in early trading this morning, withXiaomi leading gainers in Hong Kong’s Hang Seng. The smartphone maker wowed fans and critics alike with the launch of SU7 EV, selling out its full 2024 production run in less than two days. European stock futures are slightly up this morning and US futures are in the red.

THE CLOSING BELL-

The EGX30 rose 5.3% at yesterday’s close on turnover of EGP 2.9 bn (41.8% below the 90-day average). Regional investors were net sellers. The index is up 13.7% YTD.

In the green: E-finance (+11.8%), Heliopolis Housing (+11.7%), and Beltone Holding (+10.4%).

In the red: Ezz Steel (-2.7%), Juhayna (-1.5%), and Eipico (-0.2%).

CORPORATE ACTIONS-

#1- Qalaa Holdings reclaims full ownership of two subsidiaries: Financial Holdings International (FHI) has transferred its shares in two Qalaa Holdings’ subsidiaries — the National Development and Trading Company and the United Company for Foundries — back to Qalaa, giving it 100% ownership over the two companies, according to a statement (pdf). The share transfer came as part of a wider settlement agreement between the two sides.

#2- B Investments’ board of directors approved distributing dividends of EGP 1 per share. The decision now awaits the approval of the shareholder’s annual general meeting, according to a bourse disclosure (pdf).

#3- E-finance will pay out a dividend of EGP 0.19 per share on its 2023 earnings, it said in an EGX disclosure (pdf).

#4- Egypt Kuwait Holdings will pay out a dividend of USD 0.06 per share on its 2023 earnings, it said in a bourse disclosure (pdf).