London Metal Exchange to build delivery centers in Saudi Arabia

LONDON — Saudi Arabia’s Minister of Industry Bandar Alkhorayef announced Tuesday that the kingdom has reached an agreement with the London Metal Exchange (LME) to establish warehouses and delivery centers for its metals in the Gulf country. 

Investors and mining companies are bracing for a wave of exploration licenses awarded in Saudi Arabia after the kingdom nearly doubled its untapped mineral estimate to $2.5 trillion and announced new incentives for miners in January.

Alkhorayef announced the LME agreement at the PIF Private Sector Forum in Riyadh.

“The kingdom has worked to establish a very large base for the military industries sector, and the Public Investment Fund (PIF) is an important partner in this respect,” the minister said.

The LME is the main global center for trading industrial metals, and last year some 134.2 million lots were traded on the exchange. Al-Monitor has contacted the LME for comment on the Saudi deal.