Riyadh:  Saudi Arabian Mining Co. announced on Wednesday that it had decided to create a joint venture with the sovereign wealth fund of the Kingdom to invest in mining assets around the world.

The Public Investment Fund will own 49 percent of the venture, according to the company's regulatory filing, and the largest miner in the Gulf, also known as Ma'aden, will own 51 percent.

As a non-operating partner taking minority equity positions, Ma'aden stated that the new venture's initial strategy will be to invest in the iron ore, copper, nickel, and lithium sectors.

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"This will provide physical offtake of critical minerals to ensure supply security for domestic downstream sectors of the mineral industry," it was added in the filing. "It will also position Saudi Arabia as a key partner in global supply-chain resilience."

SR187.5 million ($50 million) will be the initial paid-up capital of the new company, of which Ma'aden will contribute SR96 million as its share of the investment.

Ma'aden and PIF agreed to provide up to SR11.95 billion in additional funding if capital increases or other requirements arise as the new company's operations mature.

Ma'aden stated that, unless both parties later agree otherwise, its maximum contribution shall be SR6 billion.

In a different statement, Ma'aden also said it had agreed to buy a 9.9 percent stake in the American company Ivanhoe Electric, which specialises in the exploration and development of mineral resources, and to join forces with Ivanhoe to explore and develop mining projects in Saudi Arabia.

Robert Wilt, CEO of Ma'aden, stated that cooperation with Ivanhoe will aid Saudi Arabia in discovering the true mineral resources in the Kingdom on January 11 at the Future Minerals Forum in Riyadh.

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To help uncover the potential and ascertain the true mineral resources, we will enter into a joint venture with Ivanhoe, according to Wilt.

Ivanhoe Electric stated in a separate press release that it had signed a heads of terms agreement with Ma'aden outside of the FMF to investigate copper, gold, silver, and electric metals in Saudi Arabia. 

The joint venture would allow for the use of Typhoon technology, which conducts geophysical surveys, according to the statement. The joint venture will be run by an equally constituted board of directors and technical committee, Ivanhoe Electric further stated. Ma'aden informed Tadawul that the acquisition will cost a total of SR474 million ($126.4 million) in a statement.

The agreement will be paid for with resources from Ma'aden, and it is anticipated to be completed by the end of the first quarter of 2023. Technology company Ivanhoe Electric is traded on the New York Stock Exchange and the Toronto Stock Exchange.

Wilt added that Ma'aden and Barrick Gold Limited, a division of Barrick Gold Corp., had signed a new partnership agreement. A new limited liability company will be established in Umm Ad Damar as per the agreement to quicken mineral exploration efforts in the Kingdom.

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Ma'aden announced in a statement to Tadawul that it would contribute SR28.5 million from internal funds to the exploration activities. Wilt stated in his speech at the FMF that Saudi Arabia is undergoing change and that the mining industry is the third pillar of the country's economy.