Qatar throws its weight into tussle over China minerals dominance

A mining investment vehicle backed by the US’ development bank just got a big infusion of funds: Qatar’s sovereign wealth fund is investing USD 180 mn in Dublin-based TechMet, a company that has pumped USD 450 mn into rare earth mineral extraction and production in a bid to counter China’s dominance of the strategic minerals sector.

The agreement marks a win for the US in its broader push to get Gulf states to throw their financial weight behind the US’ campaign to limit reliance on Chinese-produced minerals. The country of 1.4 bn people accounts for 90% of global rare earth refining, giving it a big advantage in tech manufacturing, and produces 60% of the world’s EV battery-grade lithium — critical for the burgeoning EV sector and the green economy. Last year, China’s decision to impose export restrictions on gallium and germanium — key metals used in chip and EV manufacturing — sent ripples through the US and Europe, stoking fears that China might deploy its mineral dominance to effectively shut down key American and European industries.

Despite US cajoling, Qatar’s recent investment wasn’t always a sure thing. The GCC member maintains warm relations with Beijing, one of the biggest buyers of the country’s natural gas, and has indicated in the past that it doesn’t want its close relationship with the US to come at the expense of its ties with China. Many companies also remain leery of major investments in strategic minerals, given uncertainty about future EV demand and governments’ commitment to hitting their climate goals.

Still, an investment in TechMet allows Qatar to add to its existing portfolio in critical minerals, which currently includes an 8.6% stake in mining and commodity training giant Glencore. As Saudi Arabia and the UAE continue to eye investments in strategic minerals, this first collaboration between the US and a GCC state on minerals might not be the last.

MARKETS THIS MORNING-

Asian markets are mostly in the red in early trading this morning. The Nikkei is looking at the biggest losses, down almost 1.20% as of dispatch. The Kospi (-0.9%) and Hang Seng (-0.8%) are also down this morning.

THE CLOSING BELL: TADAWUL-

The TASI rose 0.4% yesterday on turnover of SAR 7.0 bn. The index is down 2.0% YTD.

In the green: Petro Rabigh (+10.0%), Baazeem (+9.9%) and Albaha (+8.3%).

In the red: Malath Ins. (-6.1%), Walaa (-4.0%) and Rasan (-4.0%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.8% yesterday on turnover of SAR 32.2 mn. The index is up 5.6% YTD.

In the green: Pro Medex (+9.7%), Atlas Elevators (+8.9%) and United Mining (+8.6%).

In the red: Knowledgenet (-12.3%), Leaf (-8.0%) and Aqaseem (-5.9%)

CORPORATE ACTIONS-

#1- Arab National Bank will distribute SAR 1.3 bn in dividends at SAR 0.65 per share for 1H 2024, it said in a disclosure to Tadawul. Distribution is set for Wednesday, 21 August.

#2- Alkhabeer Capital will distribute SAR 13.2 mn in dividends to unitholders of its Alkhabeer Diversified Income Traded Fund for 1H 2024, at SAR 0.28 per unit, it said in a disclosure to Tadawul. Unitholders will receive their dividends within 10 business days of Monday, 19 August, the disclosure said.

#3- Knowledge Tower Trading Company’s board has recommended transferring SAR 897.2k in statutory reserves to its retained earnings, it said in a disclosure to Tadawul. The figure disclosed represents the statutory reserve balance as noted in the company’s financials for 1Q 2024.

#4- Theeb Rent a Car will distribute SAR 21.9 mn in dividends at SAR 0.5 per share for 2Q 2024, it said in a disclosure to Tadawul. The distribution date is set for Thursday, 22 August.

#5- Riyadh Cement will distribute SAR 120 mn in dividends at SAR 1 per share for 1H 2024, it said in a disclosure to Tadawul. The distribution date is set for Wednesday, 28 August.