Sep. 17, 2024 - Saudi Arabian Mining Company, also known as Ma’aden, said on Monday that it had signed a non-binding agreement to merge its aluminium units with Aluminium Bahrain (Alba) in return for shares in the Bahraini aluminium producer.

Ma’aden would sell the entire share capital of the units — Ma’aden Aluminium Company and Ma’aden Bauxite and Alumina Company — to Alba, and the Bahrain Bourse-listed company would, in exchange, issue new shares for allotment to Ma’aden.

Ma’aden and Alba said in separate statements that they agreed to seek a cross-listing of Alba shares on the Saudi Exchange. The proposal deal, which is subject to regulatory approvals, comes a day after Ma’aden signed an agreement with US aluminium maker Alcoa.

The potential deal is set to reshape the aluminium market, positioning the merged entity as one of the largest aluminium producers worldwide.

“The potential merger accelerates Alba’s growth strategy, creating a global champion and cementing our position as the largest regional aluminium producer. This combination will allow both companies to scale up production, extend our global presence, and explore new opportunities for clean energy,” said Khalid Al Rumaihi, the chairman of Alba’s board.

Alba is among the world’s largest aluminium smelters outside of China, producing more than 1.55 billion metric tonnes per annum. Its top shareholders are Bahrain Mumtalakat Holding Company (69.38 per cent) and SABIC Industrial Investments Company (20.62 per cent).

Ma’aden and Alba have emerged as major players in the global aluminium industry in recent years, particularly in value-added products that a handful of suppliers have historically dominated.

“Harnessing the combined scale and expertise of both businesses to forge a new global champion will not only advance Ma’aden’s ambitions for aluminium but also significantly boost the economic ties between Bahrain and Saudi Arabia,” said Bob Wilt, the CEO of Ma’aden.

Meanwhile, Ma’aden agreed to acquire Alcoa’s stakes in a bauxite facility and an aluminium smelter for $150m (SAR563m) in cash and SAR3.6bn of stock in the Riyadh-based miner.

The deal, which is expected to be completed in Q1 2025, is subject to regulatory and corporate approvals.

Ma’aden will wholly own its aluminium business, and Alcoa will hold a 2.2 per cent stake in the state miner once the deal is completed.

Alcoa formed a joint venture with Ma’aden in 2009 to develop a $10.8bn bauxite mine, refinery, smelter, and other facilities as part of Saudi Arabia’s push to diversify its economy beyond oil production and exploit the country’s other natural resources.

Last year, Ma’aden joined forces with the Public Investment Fund to form a company that will be funded with as much as SAR11.95bn to invest in mining assets internationally. The venture, known as Manara Minerals, signed its first deal in August 2023 involving the acquisition of a 10 per cent stake in Vale’s base metals unit at an implied enterprise value of $26bn.

Ma’aden discovered multiple gold deposits south of its existing Mansourah Massarah gold mine, indicating the potential to expand gold mining in the kingdom.