Ma’aden is now a
national mining
champion with
global ambitions

My fellow board members and I are honored to guide Ma’aden’s Board at such a critical juncture of the company’s very successful journey. As we start 2017, we are hopeful that we are past the lowest point of the long commodity price cycle. We are preparing to
pursue our new vision and strategy as we manage the challenges posed by the global market conditions, capture the opportunities ahead and align ourselves with Saudi Vision 2030. I salute my predecessor as Chairman and the previous Boards of Directors, the executive
management, the staff of Ma’aden, our shareholders and joint venture partners, our local communities and all our other stakeholders for
their contributions to Ma’aden’s achievements.

On my part, as someone familiar with the industrial landscape of the Kingdom of Saudi Arabia, I thought I knew Ma’aden well prior to my appointment as Chairman of the Board of Directors in April 2016. However, I have come to realize since then: that Ma’aden’s achievements so far, its capabilities, its stature as a national champion and its potential to grow as a global industry leader are even better than I had expected.

Ras Al Khair, Saudi Arabia’s new industrial city in the Eastern Province, is one symbol of Ma’aden’s success. When the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al Saud visited Ras Al Khair on November 29, 2016 and inaugurated Ma’aden’s major projects, it was a fitting recognition of the company’s achievements and its prominent role in national development.

Meanwhile, work on Wa’ad Al Shamal, the new industrial and minerals city in the north of the Kingdom in which Ma’aden is a key stakeholder, is progressing well.

Ma’aden’s impressive growth and achievements developing Saudi mineral resources deserve special praise for the scale of the integrated industries we have built, how they convert natural resources into diverse modern products and how they have opened up job opportunities for thousands of people in areas with great potential throughout our homeland.

This has not been easy; we have overcome great challenges to reach where we are now.

New vision and strategy
Ma’aden’s new vision and the 2025 strategy invoke two key strategic shifts: first, we now see Ma’aden as the champion of the Saudi mining sector, and secondly, we are prepared to explore investment opportunities inside and outside the Kingdom building on our success. In 2017, we will develop these two thrusts further. We will also continue working hard on our basic goal: maximizing returns from our assets through operational excellence.

Ma’aden’s aspiration to be the national mining champion is embedded in Saudi Vision 2030 and we take seriousely our responsibilities as the leader of the Kingdom’s mining industry that is reflected in our distinguished investments and operational performance.

As reflected throughout this annual report, operational excellence was a priority during 2016 and continues to remain so in 2017. Our success in executing operational excellence programs has resulted in higher productivity, optimization of financial and human capital and cash generation – all leading to significant financial optimization.

Our 2025 strategy foresees further growth across all three of our strategic business segments: Phosphate, Aluminium, and Gold and Base Metals.

Champion’s role in Saudi Vision 2030
Saudi Arabia is pursuing a new path towards building a vibrant society and a thriving economy under Saudi Vision 2030. Healthy economic and social development, industrial diversification, localization and support of small and medium enterprises (SMEs), creation of new jobs, community service and environmental sustainability are some of the key national goals put forward by Saudi Vision 2030.

The Saudi Vision 2030 and the National Transformation Program (NTP) have assigned a major role for the mining sector. The NTP’s immediate objective for the minerals and mining sector is to boost the industry’s GDP contribution to SAR97 billion by 2020, creating 90,000 job opportunities in the process. Saudi Vision 2030 will further advance these goals with plans for structural reforms that will spur growth in the mining sector. These include steps to stimulate private sector investments by intensifying exploration, reviewing the licensing procedures for extraction and investing in infrastructure.

Clearly, as the leader of the sector, Ma’aden has a central role to play in championing the sector’s growth. With our experience of building this vital industry after overcoming severe challenges such as the desert

environment, remote locations and difficulty accessing a trained workforce with relevant experience, Ma’aden is in a strong position to provide guidance and leadership for the country’s private sector to be part of this growth story. The Board of Directors is confident that Ma’aden will be a responsible champion of the industry, effectively tackling the challenges and assuming the accountabilities that accompany the role.

Ma’aden’s new vision and strategy complement the national goals of sustainability and social development. As a responsible industry leader, we are committed to further strengthening our investments in sustainability and social performance through our many community programs. We are also reviewing our supply chain practices with the goal of strengthening the local and SME content in our procurement activities.

Financial performance
Our financial performance in 2016 reflects the global commodity market slump. Throughout the current downcycle, and based on our approved investment program, Ma’aden has been building new large-scale integrated value chains within Saudi Arabia. Our investments have led to higher output of phosphate fertilizers, ammonia, aluminium and gold as

well as the introduction of copper into our product portfolio.

As we start a new commodity cycle, we expect demand and commodity prices to rise as our projects exit their commissioning phase and enter the full production stage. It is obvious that we must wait for our new assets to yield the expected return on investments. This is particularly true in the case of our world-class mine-to-market aluminium value chain.

History also tells us that economic and industry downturns are followed by periods of recovery.

However, businesses must learn to live with market realities that include the changes in the investment environment and international competitiveness. More importantly, successful companies need to come up with creative plans to overcome challenges. Ma’aden’s new vision and strategy do exactly that to complement and synergize with Saudi Vision 2030. We are confident that our 2025 strategy will enable us to be in a stronger position as market conditions change for the better.

Before I conclude, I salute my predecessor as Chairman and the previous Boards of Directors, the executive management, the staff of Ma’aden, our shareholders and joint venture partners, our local communities and all our other

stakeholders for their contributions to Ma’aden’s achievements. Together, they have built a solid organization that is delivering on its promises and upholding the highest level of corporate governance and values.

In conclusion, on behalf of Ma’aden’s Board of Directors I promise our partners that we will work hard to ensure that the company grows stronger, more profitable and sustainable. We will enhance the internal mechanisms of governance and good management as we continue to build a corporate culture built on integrity, productivity, partnership, ownership and teamwork.

Khalid Bin Abdulaziz Al-Falih
Chairman of the Board of Directors