Riyadh’s Saudi Arabian Mining Company (Ma’aden) turned in strong financial numbers last quarter thanks in large part due to significant strides in aluminium and alumina production, coupled with the recovery of global aluminium prices.
Ma’aden turned out 369 thousand metric tons of alumina in the quarter, a 5% increase over the previous quarter. The firm exported 300 thousand metric tons of the mineral in the quarter, significant due to the fact that the company now produces more than it can use. Ma’aden says it expects production levels to continue to rise over the course of the current year.
The firm produced 228 thousand metric tons of primary aluminium in the quarter, 5% more than the last quarter’s total, and a 4% increase year-on-year. Ma’aden chalks up the increase due to strides made in production efficiency and a greater volume of scrap processed through its recycling facilities. Cash costs fell substantially in the quarter thanks to an increase in production volume, lower fixed costs, lower levels of raw material consumption, and a lower cost of alumina.
Ma’aden also points out continuing progress made on its aluminium rolling mill as attempts to make inroads into the region’s beverage can market.
“Ma’aden continues to deliver on all fronts, achieving both outstanding operational performance as well as a strong financial performance in the first quarter of the year,” opined Ma’aden’s president and CEO Khalid Al Mudaifer. “We ramped-up production as planned in all our businesses and we continued our relentless focus on cost optimization and on generating strong free cash flow to strengthen our balance sheet. The recent recovery in the prices for aluminium, copper and gold underline our belief that we are in the right commodities for the long term. Overall, we remain cautious on commodity prices for 2017 but this quarter demonstrates that with strong cost discipline, Ma’aden can deliver industry leading performance. Stronger commodity prices will support our ongoing drive to deliver on our strategy which is closely aligned with the ambitions of Vision 2030.”
Ma’aden was founded in 1997 in an effort by the Saudi government to more fully develop the kingdom’s non-petroleum mineral resources. The Saudi government continues to own a 50% interest, with the other half traded as stock on the kingdom’s stock market. The firm signed an agreement with Alcoa in 2009 to build an aluminium complex at Ras Al-Zour. The complex includes a 1.8 million metric tons per annum alumina refinery and a 750 thousand metric tons per annum aluminium smelter.