Saudi Arabian Mining Company (Maaden) is to undergo a radical overhaul of its management board over the next six months, following the company’s flotation on the Saudi stock exchange (Tadawul).

The changes will involve company chairman and Natural Resources Minister Ali al-Naimi, stepping aside for a senior executive from the private sector.

While the firm has to replace Al-Naimi because of his status as a government minister under the regulations covering publicly listed companies, Abdallah Dabbagh, president and chief executive officer of Maaden, says he also hopes other private sector representatives will join the board.

“I expect to have more people from the private sector represented on the board of Maaden soon,” says Dabbagh. “We have three people from the private sector and I expect to increase that to about five.”

Dabbagh says he expects the last board meeting under the current management of Maaden will be held this month. This will be followed by a shareholder meeting in October, when the new management team will be approved. Several as yet unnamed senior executives have been proposed for the role of chairman, with a decision expected to be made at the September board meeting.

Shares in Maaden were trading at more than 40 per cent above the initial offer price of SR20 ($5.33) as MEED went to press, after falling from an initial peak of SR31.5. The firm made proceeds of SR9.25bn from the initial public offering (IPO), which will be used for equity investments in the firm’s upcoming projects. Maaden also secured fresh equity investment from the government of SR1.25bn.

The majority of the new finance will be used for the company’s aluminium and phosphate projects, including the $10.5bn Maaden Aluminium Company, which is expected to be about 30-40 per cent equity financed.

Bankers working on the project say they expect the project finance debt to come to the market by the end of 2008 or early 2009.

Debt financing has already been secured for the $5.6bn Maaden Phosphate Company project, a joint venture with Saudi Basic Industries Corporation (Sabic) to develop a phosphate mine and fertiliser project at Ras al-Zour.

Dabbagh says some smaller equity investments may also be made to expand the company’s gold business.

He adds that he expects all of Maaden’s project finance commitments will continue to be made in dollars, despite the eagerness of many Saudi banks to lend in the local currency. “We insist on only using dollar financing for our projects,” says Dabbagh. “We have looked at using some Saudi riyal tranches as the banks in Saudi Arabia are all trying to lend in riyals now rather than dollars, but we expect all our commitments for projects to be in dollars.”

Maaden sold 462.5 million shares through its IPO, representing 50 per cent of the company.

The IPO was announced by the Capital Market Authority on 12 May and the share sale was officially launched on 21 June for institutional investors, running for four days. Subscriptions for retail investors ran from 5 to 14 July.