Saudi mining firm makes global mark with 10% stake in Vale Base Metals - Arab News

Saudi mining firm makes global mark with 10% stake in Vale Base Metals | Arab News

RIYADH: Saudi Arabia has made a significant investment in the global mining industry after the Kingdom’s Manara Minerals secured a 10 percent share in Brazil company Vale Base Metals Ltd.

The Saudi firm — a joint venture between the Saudi Arabian Mining Company, also known as Ma’aden and the Kingdom’s Public Investment Fund — will now have access to supply chains across strategic minerals, including nickel, copper, and cobalt.

The move will boost the growth of the Kingdom’s mining sector in line with the objectives of the Vision 2030 initiative to diversify the Saudi economy away from oil.

VBM also sold a 3 percent stake to investment group Engine No.1, with the total equity value of the two deals coming in at $26 billion.

Robert Wilt, executive director of Manara Minerals and CEO of Ma’aden, said: “This investment is an important milestone for Manara Minerals. Through our investment in VBM, we are increasing the supply of strategic minerals and enabling Saudi Arabia to play a growing role in the global energy transition supply chains.

“Our proactive approach is a step further towards Saudi Vision 2030. It will support local industrial development, create jobs across the Kingdom, and strengthen the position of the mining sector as the third pillar of the economy.”

Eduardo Bartolomeo, Vale’s CEO, described the deal as a “major milestone” as the company works to expand its operations.

“With our high-quality portfolio, we are uniquely positioned to meet the growing demand for green metals essential for the global energy transition, while remaining committed to strong social and environmental practices and sustainable mining,” he added.

Formed in January following an announcement at the Future Minerals Forum in Riyadh, Manara Minerals aims to invest in mining assets globally to secure strategic minerals that are essential for the resilience of global supply-chains, according to a press release.

In an interview with Arab News in June, Mohammed Al-Dawood, head of industrials and mining sector for Middle East and North Africa investments at PIF, said the company will help to establish the mining sector as the third pillar of the Kingdom’s economy, along with providing an opportunity to explore new territories.

“This is a really exciting development that is going to give the PIF and Ma’aden an extensive international footprint in the mining space. It’s going to give the partners a platform to access minerals not available in Saudi Arabia and gives us an opportunity to move into new geographical territories,” he said.
Saudi Arabia heading to the next level thanks to esports gamble

Investment is part of Vision 2030 and plans to transform the Kingdom into a global hub for games and esports

Updated 29 July 2023

Rebecca Anne Proctor Nour El Shaeri

RIYADH: With marquee football signings and a shake-up of the international golf tour, Saudi Arabia is making waves in the sporting world at an unprecedented rate.

Yet it is not just on the pitch or the green where the Kingdom is looking to become a global leader, it is on the console screen.

In September 2022, the Saudi sovereign wealth fund earmarked nearly $40 billion for a new conglomerate aimed at transforming the Kingdom into a global hub for games and esports by 2030 — and the move is already starting to pay off.

According to Vlad Belyanin, co-founder of True Gamers, a worldwide network of esports clubs that is launching in the Kingdom in early September, “everyone in the industry is looking at Saudi Arabia.”

Speaking to Arab News, he said: “After Ronaldo’s move to Al-Nasr and Al-Hilals €600 million ($662.06 million) offer to Lionel Messi we can expect Saudi Arabia to increase the integration of esports elements into traditional sports.

“I do not exclude that someone will assemble the best mixed team in the world, taking notable esports and traditional sports players.”

The Middle East is a key player in the global gaming industry, with an impressive penetration rate and a strong commitment from governments to invest in the sector.

Alexander Schudey, managing director and partner at BCG

The investment by Saudi Arabia’s Public Investment Fund is part of the Kingdom’s Saudi National Gaming and Esports Strategy aimed at increasing the quality of life for egamers by improving players’ experience, providing new entertainment opportunities, and achieving an economic impact by contributing around SR50 billion ($13.33 billion) to the Kingdom’s gross domestic product by 2030.

The strategy is expected to lead to the creation of 39,000 new job opportunities by 2030.

Over $3 billion was invested in the industry by PIF last year, as part of the $38 billion commitment to be used by its company Savvy Games Group.

About a third of the announced amount will be spent on the purchase of a major game publisher, and the remaining funds will be used to acquire minority stakes in other gaming companies.

Acquisitions so far have included ESL and FACEIT for $1.5 billion in January 2022, Embracer Group for $1 billion in June 2022; VSPO for $265 million in March 2023, as well as Scopely for $4.9 billion in April 2023.

Brian Ward, CEO of Savvy Games Group told Arab News how the acquisition and merger of ESL FACEIT Group has enabled the creation of a force able to set the gold standard for esports competitions and gaming industry events.

Saudi Arabia is attracting worldwide attention in the sector through its investments and acquisitions in cybersports. (Supplied)

“Saudi Arabia is very important for Savvy,” Ward said, adding: “It is a very exciting and rapidly growing market — the 19th biggest market globally. There are over 21 million gamers in KSA, 70 percent of the population — over 40 percent of whom are women.”

Ward stressed how Savvy’s aim is to make Saudi a global gaming hub. The company intends to do this by building capabilities and leading international and local gaming investments.

“We believe Savvy will have a significant beneficial economic impact in Saudi Arabia, both through its direct and indirect contribution to GDP, job creation and skills development,” he added.

The growth in esport is not confined to Saudi Arabia or the Middle East. Last year PwC predicted that in 2026 the global gaming industry would be a $320-billion industry, twice as much as in 2019.

Yet despite its global size, the Middle East is being seen as one of the hotspots for this growing industry.

According to a report from Boston Consulting Group released in June, more than 60 percent of the Middle East population are gaming enthusiasts, resulting in one of the highest shares of gaming mobile app downloads — 50 percent compared to the global average of 40 percent.

“The Middle East is a key player in the global gaming industry, with an impressive penetration rate and a strong commitment from governments to invest in the sector,” Alexander Schudey, managing director and partner at BCG in a statement.

Record investments are generating high expectations. Entrepreneurs who want to make money are now thinking about entering the Saudi-Arabian market.

Vlad Belyanin, co-founder of True Gamers

He added: “The region’s focus on gaming and the establishment of dedicated gaming hubs makes it an attractive destination for global gaming companies.

“The young and digitally savvy population, particularly in Saudi Arabia, where 70 percent of the population is below the age of 30, combined with higher disposable incomes and a preference for indoor activities due to the hot weather, further contribute to the region’s thriving gaming ecosystem.”

BCG’s latest report identified four major trends that will likely leave the biggest impact on the industry’s future.

These include audience growth and demographic shifts, whereby the gaming industry growth is broadening its demographic reach, appealing not just to Gen Y, who grew up playing video games, but also those entering their 30s, with an average gamer age of 31.

Another trend is innovation from players, with consumer communities playing a significant role in driving change in the industry, while mergers and acquisitions activity is leading the gaming industry to witness a surge in consolidation as major publishers, media companies and technology firms purchase studios and gaming-related assets globally.

FAST FACTS

• Saudi Arabia’s National Gaming and Esports Strategy aims to contribute $13 billion to the Kingdom’s gross domestic product by 2030.

• PwC predicts that in 2026 the global gaming industry will be a $320-billion industry.

The final trend identified by the BCG report is new use cases, whereby the gaming industry is witnessing the emergence of the metaverse as a concept that is revolutionizing digital experiences.

The Kingdom is quickly becoming a global hub for gaming through investment and the launch of new products and technologies reflective of the above trends.

It is not just participants driving the growth of the sector, but those who wish to watch esports.

According to the Consumer Technology Association, the audience for cybersports will be 519 million viewers by 2024.

Technology and innovation play a major role in the esports industry and entrepreneurs, especially in Saudi Arabia, are capitalizing on these advancements to spur growth in the sector.

We believe Savvy will have a significant beneficial economic impact in Saudi Arabia, both through its direct and indirect contribution to GDP, job creation and skills development.

Brian Ward, CEO of Savvy Games Group

“Cybersport is becoming an experimentation ground for artificial intelligence, chips, visualization, and big data technologies,” Belyanin told Arab News.

He added: “Games are becoming more accessible. The growing popularity of games on smartphones and tablets compared to PC gaming systems is driving game makers to release games on different platforms.

“Cross-platform and cloud-based gaming solutions promote hardware-independent games, and artificial intelligence ensures fair gameplay. Social gaming and cyber sports provide a platform for developers and players to build healthy gaming communities and improve brand reach.”

Sponsoring and hosting esports events and competitions further allows developers to build brand awareness and attract new players, he states, noting how True Gamers is developing and implementing new technologies in the user experience at its cybersports centers.

For example, True Gamers is the first in the world to use robotic dogs as waiters in clubs. Three mechanical assistants will appear in different clubs in Dubai, and by the end of 2024 their number will increase to around 20. Production of the test technology cost $100k, as well as an average $10k a month on updates and modifications of robots.

Saudi Arabia, stresses Belyanin, is attracting worldwide attention in the sector through its investments and acquisitions in cybersports.

“Record investments are generating high expectations,” he adds. “Entrepreneurs who want to make money are now thinking about entering the Saudi-Arabian market.

“They are thinking: ‘There is a lot of investment, so there is a lot of profit, and therefore I need to enter the market.’”

Belyanin added: “My point of view is different. If there are a lot of investments, the new gaming culture starts to grow there and therefore, it is interesting to work with it.

“This is huge long-term work, which will bring much more than a quick profit. We are not afraid of large-scale tasks; we are keen to create the future of gaming with our own hands.”
Germany’s Delivery Hero raises stakes in Saudi Arabia

Healthy venture capital ecosystem boosts startup funding in the region

Updated 29 July 2023

Nour El-Shaeri

CAIRO: With strong economic fundamentals and rising investor confidence, the Middle East and North Africa region has become a hot spot for business consolidation and fundraising startups.

The growing presence of a well-developed venture capital ecosystem has also significantly improved startup funding in the region, disrupting traditional markets.

For instance, German food-ordering giant Delivery Hero has left no stone unturned in entering the region.

On July 24, the company acquired the remaining 37 percent stake in HungerStation, a leading food-ordering platform in Saudi Arabia.

The acquisition pushes the Saudi company toward the unicorn status of $1 billion, with the deal’s $297 million closure elevating its total value to $802.7 million.

Last year, HungerStation experienced a substantial 36 percent surge in revenue, accumulating €609 million ($678 million) and concluding the year with profits exceeding €50 million.

“We believe in the Kingdom of Saudi Arabia’s 2030 vision, ambition and potential and are committed to contributing to its ongoing success through HungerStation. I look forward to continuing to build great products and delivering an amazing experience for our Saudi customers,” said Niklas Ostberg, CEO and co-founder of Delivery Hero, in a statement.

Taking sole ownership will allow Delivery Hero to build stronger ties between HungerStation and the rest of its ecosystem, leading to better knowledge sharing and tech integration.

Founded in 2012 by Ebrahim Al-Jassim and Hossein Bukhamseen, HungerStation is a food delivery app in Saudi Arabia and Bahrain.

Delivery Hero has a presence in over 70 countries and generated over €11.4 billion in gross merchandise value in the first quarter of 2023. It is also the parent company of regional companies Talabat and InstaShop.

UAE’s Wellx raises $2m to fuel expansion

The UAE-based insurance technology startup Wellx announced it closed a $2 million seed funding round.

Launched in 2022, the wellness company plans to use the capital to drive growth in the region, stimulate technological innovation, and push its mission of nurturing healthier and more resilient communities.

Dubai Future District Fund led the seed funding round in the presence of a diversified group of investors.

Wellx’s $2 million seed funding will support its expansion plans. (Supplied)

These included DASH Ventures, Annex Investments and Sanabil 500 MENA Seed Accelerator from Saudi Arabia.

International venture capitals such as Aditum Investments from Luxembourg, Toronto’s Loyal VC and Silicon Valley’s Plug and Play Ventures were also party to the deal.

Founded by Vaibhav Kashyap, Javed Akberali and Anushka Patchava, Wellx leverages behavioral science and gamification, incentivizing healthier lifestyle choices for its users via personalized rewards.

The startup intends to allocate this capital toward refining its product design and investing in emerging technologies, such as artificial intelligence coaching, to enhance the user experience in the insurance industry.

Wellx CEO Kashyap said: “This investment enables us to expand our global customer base and accelerate our growth.”

Akberali reflected on the high growth potential of digital health insurance and wellness in the backdrop of UAE’s National Strategy for Wellbeing 2031, disrupting several traditional business models and creating sunrise industries.

The funding will also support Wellx’s expansion plans, including recruiting global talent.

DESAISIV secures $2m for tech disruption

Saudi Arabia’s insurance technology startup DESAISIV has secured $2 million in a pre-seed funding round.

The company, co-founded by Saed Khawaldeh and Mohamad Nabhan, focuses on disrupting the health insurance sector with an innovative, artificial intelligence-powered insurance customization platform.

DESAISIV is working with top machine learning scientists from the University of Oxford to develop AI solutions that drive insurance decisions.

“Our mission is to revolutionize the insurance sector by leveraging the limitless potential of artificial intelligence,” said Khawaldeh.

I look forward to continuing to build great products and delivering an amazing experience for our Saudi customers.

Niklas Ostberg, CEO and co-founder of Delivery Hero

With access to a vast database of hundreds of millions of patient records, DESAISIV has achieved a prediction accuracy of over 95 percent using its technology.

These insights fuel its AI-powered products, which optimize various aspects of health insurance, including automating underwriting procedures, tailoring policies, predicting emerging diseases, identifying high-risk behaviors and reducing customer attrition.

“By fusing AI-driven innovations with the insurance industry, we are on a mission to transform the entire global landscape, bringing forth a new era of unparalleled efficiency and customer-centricity,” said Nabhan.

The pre-seed funding round included investment from 500 Global, Terra VC, Oqal and influential figures from leading insurance firms in the MENA region, the UK and the US.

The funds will be used to expand operations and teams, develop additional AI products and explore new markets.

“By harnessing the power of AI, we are reshaping the insurance industry worldwide, empowering insurers and clients with unprecedented capabilities and paving the way for a brighter future,” said Khawaldeh while sharing his global ambitions.

“With this strategic funding, DESAISIV is poised to transform the insurance sector at its core,” added Nabhan.

Updated 28 July 2023

RIYADH: SNB Capital has been given the go-ahead by Saudi Exchange Co. to conduct market-making activities related to oil giant Saudi Aramco.

According to the firm, market makers are exchange members who ensure the availability of liquidity for a listed security by continuously quoting buy and sell orders while a market is open.

This helps boost trading activity and combats dramatic price changes.

In a release, the exchange said the market maker obligations on Aramco are an 80 percent minimum presence of orders, with a minimum size of SR500k ($133,353). The minimum spread is 0.3 percent.

The activity will begin on Aug. 1.

SNB Capital joined Saudi Exchange’s market-making framework in February, and in an interview with Arab News that same month, the firm’s Head of Securities Loai Bafaqeeh said such a move was a crucial step to ensure a good level of liquidity in the Kingdom’s stock exchange.

“At SNB Capital, we believe that we need to be ahead of the game. Market making is extremely important to ensure a good level of liquidity when it comes to equity or derivatives,” said Bafeeqah at the time.

He added: “I believe we were one of the few who signed (a market-making deal with Saudi Exchange) and the only one who will be offering both the equity part and the derivatives. And, we believe the opportunity, when it comes to securing this type of liquidity on derivatives will be even more important.”

Apart from SNB Capital, Al Rajhi Capital and Riyad Capital also joined the market-making framework, an initiative that was launched in December 2022 to help ensure liquidity and raise price-determination efficiency.

During the same interview with Arab News in February, Bafaqeeh described SNB Capital as being unique as it offers “market making on your terms.”

“If you want us to do market making for you, we will be able to do that. If you want to manage how you are going to put the orders, we can enable it for you. Also, we can work with a third party that we can assign for market making, in case the client prefers,” he said.

KARACHI: Pushed by food and energy prices, Pakistan’s short-term inflation rate spiked by 3.73% during the week that ended on July 26, according to data released by the Pakistan Bureau of Statistics (PBS), with analysts saying on Friday this was the highest rate since October 2022.

A major increase was observed in the prices of food items, including a 28.98% increase in the price of chili powder, 19.71% of tomatoes, 4.77% of eggs, 20.98% of electricity charges for the first quarter (Q1) and 4.12% of LPG prices.

Annual basic inflation increased by 29.21%, pushed by 132.36% increase in wheat flour rates, 110.75% in cigarettes, 108.38% in gas charges, 79.60% in broken basmati rice, 63.72% in sugar, 62.65% in potatoes and 18.06% in electricity for Q1 on a year-on-year basis.

Analysts said the weekly inflation rate hike was the highest since October last year when it increased by 4.13%.

“This is the highest weekly change in SPI since October 2022 when the currency was massively depreciated,” Samiullah Tariq, Director Research at Pakistan Kuwait Investment Company, told Arab News on Friday.

Inflation, measured by the Consumer Price Index (CPI), reached on all-time high of 38% in May, but eased to 29.4% on a year-on-year basis in June 2023 as compared to 21.3% in June 2022.

“Inflation in July 2023 is expected to ease out compared to the month of June 2023,” the Ministry of Finance said in a report released on Wednesday.

“The recent decrease in administered prices of petrol and diesel will be transmitted into lower domestic prices of essential items by impacting the transportation cost.”

As inflation remains stubborn at elevated levels, the central bank is expected to further hike the key interest rate in its next monetary policy on Monday.

“The central bank is expected to jack up the policy rate by 100 basis points to 23%,” Tariq said, hoping the move would help “control inflation.”

Updated 28 July 2023

Reuters

GANDHINAGAR: India wants to emerge as a trusted partner for the semiconductor industry and is keen to be a chip supplier for the world, Prime Minister Narendra Modi said on Friday, as he steps up efforts to attract global investors to establish production in the country, according to Reuters.

“To expedite the growth of the semiconductor sector in the country, we are continuously undertaking policy reforms,” said Modi, who has made chipmaking the top priority of his economic policy. “We are working with partner countries for a comprehensive roadmap for semiconductor industry.”

At the SemiconIndia conference, held in Modi’s home state of Gujarat, US chipmaker Advanced Micro Devices announced plans to invest around $400 million in the country over the next five years and build its largest design center in the tech hub of Bengaluru.

The investment bodes well for the event, which is the prime minister’s latest attempt to attract investors into the chip industry after his initial bid to offer incentives floundered.

A few weeks ago, Foxconn backed out of a $19.5 billion chips joint venture with Vedanta, saying “the project was not moving fast enough.” Foxconn has since decided to go solo.

Two other consortia, including one that involved Israel’s Tower Semiconductor, had announced plans to invest $3 billion each, but the proposals have since stalled.

India is currently re-inviting applications under a $10 billion incentive scheme.

Most of the world’s chip production is limited to a handful of centers, such as Taiwan. Modi’s comment received endorsement from Foxconn.

Young Liu, the chairman of Foxconn that is officially called Hon Hai Precision Industry Co. Ltd, told the event: “I can feel the determination of the Indian government. I am very optimistic of where it’s headed.”

Despite being a late entrant, India estimated the local chip market to be worth $80 billion by 2028, almost four times its $23 billion size now.