Saudi’s Manara sounds out firms over push into metals trading

Saudi Arabia’s state-controlled metals and mining vehicle is in talks with some of the world’s biggest commodity houses over a push into trading, as the kingdom expands its presence in global supply chains.

Manara Minerals Investment Co., a venture between the kingdom’s sovereign wealth fund and state mining company, has held discussions with traders including Glencore Plc and Mercuria Energy Group Ltd. about forming a partnership, according to people familiar with the matter who asked not to be identified as the talks are private.

Middle East investment vehicles, such as Abu Dhabi’s International Resources Holding and Manara, have been looking to increase their exposure to metals trading at a time when prices for many commodities are near record highs and securing supplies of critical minerals becomes a political flash point from Washington to Beijing.

Last year, metals desks were some of the biggest moneymakers at trading houses as soaring prices and a fractured copper supply chain created conditions for some once-in-a-generation trades. That helped prompt an influx of capital into those markets through new trading launches from companies like Saudi Aramco and Citadel.

Saudi Crown Prince Mohammed bin Salman laid out plans in his Vision 2030 agenda for mining and metals to be the “third pillar” of the economy, as the kingdom attempts to diversify away from oil. Launched in 2023, Manara made an initial splash, buying a $2.6 billion stake in Vale SA’s base metals unit, but since then has struggled to find more deals at an attractive valuation.

Manara — tasked with snapping up stakes in mines overseas and funneling the raw materials back to the kingdom for processing — is weighing a range of options. That includes forming an official trading joint venture, or striking an agency agreement, where a trader helps with things like logistics. They could also work together on a deal by deal basis, the people familiar said.

The Saudi vehicle, which reached out to more than a dozen trading companies, is also talking with Javelin Global Commodities, Ocean Partners Holdings and Trafigura Group, the people said.

Spokespeople for Manara, Glencore, Mercuria, Javelin, Ocean Partners and Trafigura declined to comment.

The talks are at an early stage and there’s no guarantee an agreement will be reached, the people said.

As part of the Vale deal, Manama receives offtake of copper and nickel, which the Saudi firm has been tendering. A joint venture would allow Manara to better monetize that supply, as well as potentially securing more raw materials for Saudi Arabia and state-owned Saudi Arabian Mining Co.

(By Archie Hunter and Thomas Biesheuvel)