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Robert Friedland’s Ivanhoe Electric one of three finalists for Saudi Arabia project

Robert Friedland, Founder and Co-Chairman of Ivanhoe Mines, speaking at the 2022 Future Minerals Forum in Riyadh, Saudi Arabia. Credit: FMF

Saudi Arabia has narrowed the field to three finalists for a massive mining exploration licence about 175 km west of Riyadh that it says contains about 25 million tonnes of zinc and copper at grades of 4.11% zinc and 0.56% copper. 

The kingdom received six proposals for the 350-km Khnaiguiyah licence and has selected three for its short list: a consortium between Saudi Arabian Mining Company (Ma’aden) and Ivanhoe Electric (TSX: IE; NYSE-AM: IE); a consortium between Alara Saudi Ventures Pty. Ltd. Resources and AlTasnim Enterprises LLC; and a consortium between Moxico Resources Plc and Ajlan & Bros Mining Company. 

The third and final stage of the application process will kick off on Sept. 4. 

As part of its plan to transform the mining sector into the third pillar of its national economy, Saudi Arabia offers incentives including co-funding of up to 75% of capex through the Saudi Industrial Development Fund (SIDF); a five-year royalty holiday for miners and a 30% reduction on royalty payments for further downstream production processing. 

The government hosted its first ever Future Minerals Forum in January to showcase its mining potential and the urgency of finding more critical metals. lt passed a new minerals investment law last year and in the first ten months of 2021 the country provided 13 reconnaissance licences, 133 exploration licences and eight exploitation licences, according to government data. 

Mining companies active in the country include Barrick Gold (TSX: ABX; NYSE: GOLD), which has a 50-50 joint venture copper operation with Ma’aden. The Jabal Sayid mine went into commercial production in July 2016.  

Among the finalists for the Khnaiguiyah licence, Ivanhoe Electric is focused on electric metals projects. Its two flagship projects are in the United States: Santa Cruz, a copper project in Arizona, and Tintic, a copper, gold and silver project in Utah. 

The company also has what it describes as advanced exploration technology including Typhoon, a geophysical survey technology based on Pulse Power, as well as data analytics and geophysical modelling and artificial intelligence for water, oil and mineral discoveries. In addition, it holds a controlling interest in VRB Energy, a developer and manufacturer of large-scale energy storage systems.