Saudi Arabia pumping R9.5 billion into Limpopo

South Africa’s Cabinet has welcomed the Kingdom of Saudi Arabia’s announcement that it will invest around R9.5 billion to help build a platinum group metals (PGM) smelter and base metals refinery (BMR) in the Waterberg region in Limpopo.

At the tail-end of November, the Kingdom of Saudi Arabia’s Ministry of Investment (MISA) and Ajlan & Bros Company for Mining (a subsidiary of Saudi-based investment holding company Ajlan & Bros Holding), announced that a memorandum of understanding (MOU) had been signed to develop PGM smelters and base metals refineries.

According to the terms of the MOU, MISA will offer strategic guidance and financial support to the proposed PGM Smelter and BMR to be located in Saudi Arabia and the Waterberg Project located in South Africa.

This would be alongside Platinum Group Metals Ltd, the operator and majority owner of the platinum-rich Waterberg Project, a bulk underground palladium and platinum deposit located in Limpopo.

These investments are designed to meet Saudi Arabia’s “Vision 2030 initiative to develop the mining and minerals industry to become the third pillar of the Kingdom’s gross domestic product.”

The smelter and refinery is not yet in development, but in terms of the latest financial model, construction is deemed to begin in December next year, with the first production expected in September 2029.

“A key requirement before a Waterberg focused PGM Smelter and BMR can be constructed and operated in Saudi Arabia will be a long-term approval for the export of unrefined precious metals in concentrate from South Africa,” said MISA.

They said that Platinum Group has been working with the government of South Africa “to identify local beneficiation opportunities and to analyse the possible impact of exporting concentrate on the value chain.”

Speaking to the media on 5 December about the outcomes of the recent Cabinet meeting, Minister in the Presidency Khumbudzo Ntshavheni said that the new investment from its fellow BRICS+ member “is a strong vote of confidence in our nation.”

Ntshavheni said that it “builds on the first phase of our investment mobilisation drive under the Sixth Administration that saw our nation surpassing its investment target by 26% to reach a total of R1,51 trillion in investment pledges.”

“South Africa is now targeting R2 trillion in new investments over another five-year period between 2023 and 2028,” she added.

Saudi Arabia looking to boost mining industry

The ministry has officially been exploring building PGM smelters and BMRs for some time.

An agreement was reached in 2023 between MISA and Ajlan & Bros which saw the plans divided into three phases: a global market study, a Definitive Feasibility Study (Smelter DFS) for the smelter’s construction and operation, and an option to form a 50:50 joint venture after completing the Smelter DFS.

The outcome of the Market Study concluded that end of life auto and petrochemical catalysts, sourced from the Gulf Region, could augment the operation of a Waterberg focused PGM Smelter and BMR in Saudi Arabia.

Other sources of mined PGM concentrate from Southern Africa, if available, may also be considered over the longer term.

Now, that various boxes have been ticked, the project will involve exporting PGM concentrate from South Africa’s Waterberg Project to a port facility in Saudi Arabia, if all goes according to plan.

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