Bahrain appoints firm for new $10bn airport

11 May 2023

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The Ministry of Transportation & Telecommunications has awarded Netherlands Airport Consultants a BD541,900 ($1.437m) contract to conduct an initial study for Bahrain's estimated $10bn greenfield airport project.

The Hague-based airport consultancy and engineering firm will oversee and coordinate the work of various specialist sub-consultants, serving as the principal adviser to the ministry.

The multidisciplinary study encompasses public policy, development strategy, technical, economic, financial and regulatory analysis and evaluation.

Reclaimed island

The new greenfield airport will eventually replace the existing Bahrain International airport (BIA) due to the inadequacy of its current infrastructure in meeting the kingdom's growing airport needs.

The new airport will be developed on a reclaimed island north of Muharraq, where BIA is located.

This project has been under consideration for some time and was mentioned as part of the Strategic Projects Plan announced in November 2021.

MEED reported in 2017 that the development could cost $10bn. The new island will require dredging and infrastructure development, including constructing a bridge or causeway connecting it to the rest of Bahrain.

Existing airport

The new terminal building at BIA, which opened in 2021, was directly developed by the government with financial support from the GCC.

There is ongoing development around the existing airport.

On 9 May, the Ministry of Works issued a tender for post-contract engineering services to improve access to BIA. It comprises stage three of phase one, which includes the construction of a flyover, culvert, reclamation and improvement of the Arad and Khalifa AlKaber Highway.

The ministry expects to receive bids by 4 June.
Eva Levesque
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  • Mergers soar in global mining sector

    23 February 2024


    This month's Agenda also includesSaudi Arabia transforms mining sector

    There was a surge in mergers and acquisition (M&A) activity in the global mining sector in 2023, extending a period of consolidation in the industry that began in the previous decade.

    The total value of M&A deals in the industry increased by 75% compared to the previous year, to reach $121bn, according to a report by GlobalData. The number of M&A transactions grew 5% year-on-year to 1,526, while the number of mega deals – which are defined as deals with a transaction value of $1bn or more – stood at 16.

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    In November, Swiss commodities giant Glencore announced it will acquire a majority 77% stake in Elk Valley Resources, the steelmaking coal business of Canadian miner Teck Resources. The transaction is valued at $6.93bn, making it the second-biggest deal of 2023.

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    Within months of being established, Saudi Arabia’s Manara Minerals entered into a transaction in July with Brazilian mining major Vale to become a 10% shareholder in its $26bn subsidiary, Vale Base Metals. 

    Manara Minerals teamed up with investment firm Engine No 1, which took a 3% stake in Vale Base Metals. The $3.4bn transaction was the third-biggest M&A deal in 2023.

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    In another key deal, Australia’s MMG entered into a share purchase agreement to acquire the parent company of Botswana’s Khoemacau copper mine, with a deal value of $1.8bn.

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  • Saudi Arabia transforms mining sector

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    This month's Agenda also includes: Mergers soar in global mining sector

    Saudi Arabia’s metals and mining industry is playing a pivotal role in the country’s non-oil growth trajectory. 

    Commercial exploitation of the kingdom’s massive mineral resource base, most of which lies untapped, is a key component of Riyadh’s Vision 2030 socioeconomic transformation strategy.

    The kingdom took the first step towards realising the commercial potential of its mineral resources when it enacted a new mining investment law in 2021. Since the law came into effect, the Ministry of Industry & Mineral Resources (MIMR) has awarded more than 2,000 mining permits to local and foreign firms under its accelerated exploration initiative.

    Addressing the Future Minerals Forum (FMF) in Riyadh in early January, Bandar Alkhorayef, the kingdom’s industry and mineral resources minister, said Saudi Arabia’s natural resources are worth $2.5tn – an increase of more than 90% compared with the 2016 estimated level of mineral reserves.

    This near-doubling of its deposits of natural resources – which excludes fossil fuels and includes phosphate, gold and rare earths – is set to act as a stimulus to the kingdom’s nascent mining industry.

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    The MIMR is leading efforts to boost investments in the Saudi metals and mining sector, and Riyadh is providing impetus to the mineral exploration incentive programme with a cash injection of $182m.

    “This programme will de-risk investments in our exploration, to enable new commodities, greenfield projects and junior miners,” Alkhorayef told the FMF.

    To tap into overseas mining experience, the ministry signed four memorandums of understanding at the FMF.

    Deals involving cooperation in the field of mineral wealth were signed with Egypt’s Petroleum & Mineral Resources Ministry, Morocco’s Energy Transition & Sustainable Development Ministry and Congo’s Mines of the Democratic Republic Ministry. A separate agreement inked with Russia involves geology. 

    Alkhorayef also announced the MIMR’s fifth and sixth mining concession licensing rounds at the conference in Riyadh. The rounds will offer local and international miners access to 33 exploration sites this year.

    The ministry launched its last concession licensing round in August 2023, offering eight mining sites in the kingdom. Six of the sites are located in the Eastern Province – in Ghounan, Al Misnah, Al Samman, Ras Al Qaryah and the eastern and western zones of Salwa – and are understood to contain limestone ore, sand and other minerals.

    The other two sites are in Riyadh Province, in Al Armah and Hofayrat Nesaah. These sites are estimated to hold gravel and sand deposits, among other minerals.

    Prior to the August licensing round, the ministry announced in April that it had shortlisted 13 local and international companies for the exploration phase at the Muhaddad and Al Ridaniyah mining sites.

    The Muhaddad exploration site, located in Bisha within the Asir geological terrane, covers 139 square kilometres and includes copper, zinc and lead ore deposits. The Al Ridaniyah exploration site is in the Riyadh region within the Al Dawadmi geological terrane. It covers more than 75 sq km and includes deposits of zinc and silver ore.

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    The near-doubling of its deposits of natural resources is set to act as a stimulus to the nascent mining industry

    Maaden steps up

    Saudi Arabian Mining Company (Maaden) is at the forefront of Riyadh’s campaign to develop and expand the kingdom’s metals and mining sector. By 2040, the company, which is majority owned by the Public Investment Fund (PIF), aims to build its upstream mining capabilities, gain exposure to future minerals and form partnerships with global mining companies.

    Last January, Maaden signed a joint-venture agreement with the PIF to establish a new company to invest in mining assets globally. Maaden owns a 51% stake and the PIF holds the other 49% in the company, known as Manara Minerals, which will have a capital allocation of $50m.

    Manara Minerals aims to invest in iron ore, copper, nickel and lithium projects as a non-operating partner, taking minority equity positions. The firm’s first overseas investment was a deal in July to become a 10% shareholder in Brazilian mining major Vale’s $26bn subsidiary, Vale Base Metals.

    In terms of metals production, Maaden announced in mid-January that its subsidiary Maaden Gold & Base Metals Company (MGBM) had started commercial production of gold from the first phase of the Mansourah-Massarah gold project.

    MGBM operates six gold mines, with the Mansourah-Massarah mine being one of its concession areas. In June 2021, the Maaden subsidiary awarded an estimated $880m contract for the first phase of the Mansourah-Massarah gold mine to a consortium of India’s Larsen & Toubro and Finland-based Metso Outotec. The award of that engineering, procurement and construction (EPC) contract represents the biggest investment in gold mining in Saudi Arabia to date.

    In August last year, MGBM also awarded an EPC contract for the second phase of the Mansourah-Massarah gold mine project, worth $28m, to a consortium of Riyadh-based Darkstone and Australia-headquartered ATC Williams. The contract involves installing tailings storage facilities and wastewater management systems.

    Maaden exploration push

    On the mineral exploration front, Maaden signed an agreement with US-based Ivanhoe Electric in July 2023 to undertake exploration for high-demand minerals in the Arabian Shield zone in Saudi Arabia. As part of the $130m deal, the partners are to survey an area of 48,500 sq km in the Arabian Shield, starting in September.

    About the size of Switzerland, the Arabian Shield region is understood to be rich in reserves of minerals such as copper, nickel, gold, silver and possibly lithium.

    Maaden has had success in its exploration drive. In late December, it announced the discovery of significant gold resource potential extending along a 100km strike from its Mansourah-Massarah gold mine. This is the first find from the company’s exploration programme, which was launched in 2022 with the aim of building Maaden’s production pipeline.

    Exploration around Mansourah-Massarah has focused on identifying potential deposits of a similar scale and with similar geology. Encouraging drill results from several sites on Uruq South, along a 100km stretch south of Mansourah-Massarah, uncovered similar geological characteristics and chemistry to the gold deposit. These results include high-grade drill intercepts found 400 metres away from and under Mansourah-Massarah, with several high-grade intercepts.

    In addition, Maaden has continued the expansion of its exploration footprint at the Jabal Ghadarah and Bir Tawilah prospects located 25km north of Mansourah-Massarah, where the company is converting an inferred resource of 1.5 million ounces to indicated and measured status.

    In combination, these positive drilling results have identified a 125km strike with significant potential to become a major gold belt in Saudi Arabia. The near-mine drilling results around Mansourah-Massarah indicate that the resource is open both at depth and along the strike, offering significant potential to expand resources at the mine and possibly to extend the mine life with underground development.

    Mansourah-Massarah had stated gold resources of almost 7 million ounces as of the end of 2023, and a nameplate production capacity of 250,000 ounces a year.

    Positive drilling results have identified a 125km strike with the potential to become a major gold belt in Saudi Arabia  

    Maaden technology investments

    To extend the role of technology in Saudi Arabia’s mining sector, Maaden signed a master agreement with Germany’s Thyssenkrupp Uhde at the FMF. The deal covers the development of engineering and licensing of a calcination plant for phosphogypsum processing.

    The purpose of the proposed plant, which is to be located at Maaden’s Ras Al Khair site, is to recycle phosphogypsum and enable the capture of carbon dioxide (CO2) emissions. The joint research and development will be carried out together with Thyssenkrupp Polysius and Metso Outotec.

    Also at the FMF, Maaden and US firm GlassPoint announced plans to develop a solar steam technology. The first stage of project development will have the capacity to supply 9 tonnes of steam an hour to begin the decarbonisation of Maaden’s aluminium supply chain, in what is expected to be the world’s largest industrial solar thermal project.

    The technology will combine the direct generation of heat and storage to provide a continuous base load of steam to Maaden’s alumina refinery at Ras Al Khair. The initial capacity will be about 1% of the larger project, which is slated to save more than 12 million British thermal units of energy annually and reduce CO2 emissions by 600,000 tonnes a year.

    Maaden and digital reality firm Hexagon also partnered at the FMF to launch a "digital mine".

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    MEED's October 2023 special report on Saudi Arabia includes: 

    > COMMENT: Riyadh reshapes its global role
    > POLITICS: Saudi Arabia looks both east and west
    > SPORTSaudi Arabia’s football vision goes global
    > ECONOMY: Riyadh prioritises stability over headline growth
    BANKSSaudi banks track more modest growth path
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    > DOWNSTREAMSaudi chemical and downstream projects in motion
    > POWERRiyadh rides power projects surge
    > WATERSaudi water projects momentum holds steady
    > GIGAPROJECTSGigaproject activity enters full swing
    > TRANSPORTInfrastructure projects support Riyadh’s logistics ambitions
    > JEDDAH TOWERJeddah developer restarts world’s tallest tower
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  • Data centre activity soars in Saudi Arabia

    23 February 2024

    Saudi Arabia is experiencing a major uptick in the construction of data centre assets across the country.

    Despite the preference for data centres to be inconspicuous due to security concerns, it is not uncommon to see certain construction sites or completed facilities marked clearly as such when one navigates the capital city, Riyadh.

    Data sovereignty regulations as well as the widespread use of electronic commerce and social media particularly by young Saudis are driving the data centre construction boom, notes a Riyadh-based expert.

    Government agencies, banks, and family-owned conglomerates, in addition to local and international data centre developers and operators, have either started constructing or are planning to start the construction of data centre facilities across Saudi Arabia. 

    The value of known data centre projects pipeline in the kingdom falls under $1bn, according to regional projects tracking service MEED Projects. While this value corresponds to just one utility-scale renewable energy plant or a minor upgrade of an oil production facility in Saudi Arabia, future plans point to a major expansion of such facilities, which underpin the kingdom's digital hub and artificial intelligence (AI) strategies.

    For instance, the government announced in 2021 a plan to build a network of large-scale data centres that will require investments of up to $18bn by 2030.  At the time, the kingdom's Communications & Information Technology Ministry (MCIT) tapped local firms Gulf Data Hub, Al-Moammar Information Systems and Saudi FAS Holding as its initial partners for the scheme. 

    The following year, Saudi-headquartered Quantum Switch Tamasuk (QST)  unveiled plans to design and operate data centre projects with a cumulative total capacity of 300MW for the MCIT  by 2026. The project will comprise six locations across Riyadh, Dammam, Jeddah and Neom, with a reported budget of at least $2bn.

    Foreign investments have started pouring in to accommodate the rising capacity demand as well as the kingdom's ambition to become a digital hub.

    Dubai developer Damac Properties-owned Edgnex is constructing a data centre, which will have a minimum capacity of 20MW, at Industrial City 2. 

    In October last year, South Korea’s second-largest telecoms company, KT, in collaboration with Hyundai Engineering & Construction (Hyundai E&C) and the local telecoms group STC, signed a memorandum of understanding (MoU) to construct internet data centres (IDC) and smart cities in the kingdom. 

    Similarly, the UAE-based cloud and data service provider Khazna Data Centres also plans to build data centres in Saudi Arabia as it executes its overseas expansion plans. 

    In May last year, sovereign vehicle, the Public Investment Fund (PIF), teamed up with US-based infrastructure investor and asset manager DigitalBridge to develop data centres and related digital infrastructure in Saudi Arabia and across the GCC states.

    Telecoms service provider Zain is also expected to build a new data centre with some support from the kingdom's SR5tn ($1.35tn) Shareek private sector investment programme.

    Crucially, US-headquartered IT and cloud services giants Microsoft and Oracle pledged at the annual Riyadh tech conference, Leap, last year, to invest a total of $9bn in the kingdom. This will go into the construction of multiple data centres to form a so-called cloud region catering to Saudi Arabia and the wider Middle East region.

    Similarly, Chinese tech firm Huawei has pledged to invest $400m to build cloud services in the kingdom.

    "The demand is there that's why we are focusing on these projects," said the Riyadh-based construction expert, who also acknowledges that the depreciation rate for data centres is higher compared to real estate assets due to the high obsolescence of technology and the need to replace data centre components frequently.

    Digital hub

    A growth in the number of subsea cable landing sites in the kingdom is occurring in parallel with the substantial growth in data centre facilities and capacity.

    A 45,000-kilometre subsea cable network connecting Africa, Asia and Europe, 2Africa, reached two of its four landing sites in Saudi Arabia in May 2023. The landing sites are in Jeddah and Yanbu.  The cable is expected to reach the third landing site in Duba late last year and the fourth site in Al-Khobar in 2024.

    Once completed, 2Africa will connect Saudi Arabia to 33 countries, bringing the kingdom closer to its goal of becoming a digital hub.

    The stakes are high for the kingdom, which has simultaneously launched plans to industrialise its economy, decarbonise its industries, increase localisation and reach net-zero carbon emissions by 2060.

    While constructing energy-intensive data centres – which globally account for 1% of energy-related greenhouse gas emissions –  may seem counter-intuitive to these objectives, the rapid advancements in cooling and other data centre components, as well as the potential deployment of clean energy to power them, are expected to ease these assets' environmental impact.

    Jennifer Aguinaldo
  • US firm wins Al Kahfah solar tracker package

    23 February 2024

    Riyadh-headquartered Acwa Power and India's Larsen & Toubro (L&T) have selected the US-headquartered Nextracker to provide solar trackers for the Al Kahfah solar photovoltaic (PV) power plant in Saudi Arabia.

    The project is one of three utility-scale solar projects being jointly developed by Acwa Power and its partner, Water & Electricity Holding Company (Badeel). as part of the kingdom's National Renewable Energy Programme (NREP).

    The US solar tracking manufacturer will supply its all-terrain NX Horizon-XTR product for the project located in the kingdom's Central Province.  

    The area the solar plant will occupy underpinned the choice to deploy Nextracker's smart solar tracker systems for the Al Kahfah project.

    The location is dominated by a hilly, hard-soil land surface that would otherwise typically require a combination of explosives and grading machines to flatten.

    Nextracker’s all-terrain solar tracker system can conform to the natural terrain to reduce the need for costly land grading while significantly reducing environmental impact, Acwa Power and L&T said.

    The project is understood to be the largest deployment of Nextracker's NX Horizon-XTR solar tracking technology in a single order.

    Nextracker founder and chief executive Dan Shugar said the project bolsters the Saudi government's leadership in energy transition and the dominance of solar technology in driving the transition to renewables in the region.

    L&T is understood to be the project's engineering, procurement and construction contractor.

    PIF solar projects

    Acwa Power and Badeel signed the power-purchase agreements with Saudi Power Procurement Company to develop and operate the three projects in May last year.

    In addition to the Al Kahfah solar project, the developer team will also develop the 2,000MW Al Rass and 1,125MMW Saad 2 solar PV projects.

    The projects are estimated to cost a combined SR12.8bn ($3.4bn).

    The projects are expected to reach financial close after they have satisfied the conditions precedent for senior loans drawdown, as a recent Acwa Power bourse filing has indicated.

    The banks that agreed to provide senior debt financing of SR8.6bn ($2.3bn) for the three projects include:

    • Banque Saudi Fransi (local)
    • HSBC (UK)
    • Mizuho Bank (Japan)
    • Riyad Bank (local)
    • Saudi Awwal Bank (local)
    • Saudi National Bank (local)
    • Standard Chartered Bank (UK)

    The financing duration is 27.75 years. The project debt financing amount is non-recourse to Acwa Power, which owns a 50.1% equity in the three projects.

    Its partner, the Public Investment Fund (PIF) subsidiary Badeel, owns the remaining 49.9% equity in the projects.

    The three projects take the number of solar PV contracts awarded by the PIF under the kingdom’s NREP to five.

    It awarded contracts for the development of the 1,500MW Sudair solar PV in 2021 and the 2,060MW Shuaibah 2 solar PV in 2022.

    Badeel is a wholly owned subsidiary of the PIF, which is mandated to develop 70% of the NREP’s target capacity through the kingdom's Price Discovery Scheme.

    The PIF also owns a 44% stake in Acwa Power.

    Neither SPPC nor Acwa Power has disclosed the levelised electricity cost for the latest three schemes.
    Jennifer Aguinaldo