- Saudi Arabia’s PIF plans to spin off Manara Minerals, its mining JV with Ma’aden, to build technical capability and operate beyond pure capital allocation.
- Manara, formed in 2023 to invest globally in critical minerals, has completed one major deal: a US$2.5 billion purchase of 10% of Vale Base Metals.
- No timeline is set, but talks include bringing in new Saudi and foreign investors to strengthen governance and execution capacity.
- The move supports Vision 2030 and Saudi ambitions to capture value from an estimated US$2.5 trillion in mineral resources and expand across copper, lithium and rare earths.
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The decision to spin off Manara Minerals suggests a maturing of Saudi Arabia’s critical minerals strategy. While PIF has until now functioned primarily as a capital provider, separating Manara could allow for greater operational autonomy, enable direct engagement in technical mining, and attract specialized partners with sector expertise. This can enhance execution in mining projects that are often complex, capital-intensive, and risky.
Manara’s record shows both ambition and caution. Its formation in 2023 marked a push into securing supply chains for minerals essential to energy transition—copper, lithium, cobalt. Its largest and only completed deal to date is the US$2.5 billion purchase of 10% of Vale Base Metals (VBM), providing exposure to growth across Brazil, Canada and Indonesia. But the absence of other completed deals may reflect risk aversion, regulatory obstacles, or competitive tensions.
Strategically, the timing of the spin-off could help in recruiting co-investors and meeting international expectations of governance, technical capacity, and ESG performance. It may also improve Manara’s ability to strike offtake or processing relationships, and win global bids in markets with geopolitical and supply chain sensitivity. However, execution risks remain: establishing technical expertise, navigating international mining jurisdictions, managing volatility in commodity prices, and negotiating political or regulatory constraints.
Open questions include: What legal and organizational form will the spin-off take? What percentage ownership will PIF and Ma’aden retain? Who will the new shareholders be? Will Manara also spin up downstream capabilities (processing/refining), or remain purely investment/asset ownership focused? Finally, how will Saudi Arabia ensure environmental, social and governance compliance in its global projects so as to attract foreign investors and satisfy export markets?
Supporting Notes
- Manara Minerals is a joint venture between Ma’aden and PIF, established in 2023 with the aim of investing in global mining assets and securing critical minerals.
- PIF and Ma’aden have decided to spin off Manara to move beyond investment toward building technical mining expertise; no timeline has been given for the separation, but attracting new investors (Saudi or foreign) is under discussion.
- Manara has so far completed only one major transaction: a US$2.5 billion investment for a 10 % stake in Vale Base Metals, a carve-out from Brazilian miner Vale, in 2024.
- The Kingdom estimates its untapped mineral wealth—including phosphate, gold, bauxite and rare earth elements—at around US$2.5 trillion.
- Ma’aden is working on extracting lithium from seawater and exploring rare earth elements as part of its global and domestic expansion.
- PIF is targeting full mining value chains, including downstream processing and ESG compliance, while using advanced technologies (AI, robotics, digital twin) for exploration and development.