Saudi Arabian Mining Company (Maaden) has said its second-quarter net profit slumped 50.95 per cent as sales revenues for the Gulf region’s largest mining firm tumbled due to sliding prices of commodities.

Maaden reported a net income SR132m ($35m) for the three-month period ending 30 June, down from SR270.1m for the same period in 2015.

The mining giant which had reported a 35.3 per cent drop in income for the first three months of this year, said profit fell 22 per cent quarter-on-quarter.

Gross profit fell to SR540m at the end of the second quarter, a 30 per cent retreat from the corresponding period a year-earlier, the company said in a statement to Saudi Stock Exchange (Tadawul), where its shares are traded.

Profitability was affected as sales revenues declined 16 per cent due to lower commodity prices for ammonium phosphate fertilizer, ammonia and aluminium products. An increase in finance charges by 80 per cent due to rise in Saudi interbank offered rate (Sibor), a surge in the provision for zakat by 34 per cent and the decline in other income by 91 per cent also affected net profit.

The income decline, however, was offset by increased volume of sale for gold, ammonium phosphate and ammonia. “The average realized prices for gold were slightly higher compared to the same period last year,’’ it said in the statement.

Profits for the quarter also benefited from an increase in income from short-term investments, which rose by 319 per cent, it said without giving the details of those investments. The decline in share of losses in the jointly controlled entity Samapco by 27 also supported the income for the quarter.

The government-controlled Ma’aden, which operates in gold, aluminium and phosphates, is at the heart of the Saudi Arabia’s plans to diversify its economy away from oil and cut its dependence on sale of hydrocarbons fro revenues. Unlike the kingdom’s smaller GCC neighbours, Saudi Arabia has a large wealth of mineral resources that it is integrating into downstream industries such as aluminium and fertiliser production.

The company in July announced that its Maaden Barrick Copper Company (MBCC) has started commercial production at the Jabal Sayid copper mine in Saudi Arabia. The operation is expected to produce an average of 45,000 tonnes a year (t/y) of copper concentrate. Jabal Sayid, which is located 120 kilometres southeast of Mecca, has a mine life of about 16 years, with estimated reserves of about 635,000 tonnes of copper.

The main deal for the project was awarded to Canada’s SNC Lavalin in 2010.

MBCC is a 50:50 joint venture of Maaden and US-based Barrick Gold Corporation. Maaden, which bought into the company in July 2014 for $210m, announced in April that the start-up of the operation had been pushed back from the first quarter of 2016.

The company has also turned to bank finance to manage its funding requirements. Maaden Phosphates Company (MPC) closed a SR11.5bn refinancing deal this year. Maaden Waad al-Shamal Phosphate Company another Maaden subsidiary in January borrowed SR4bn in four separate loans from Saudi Industrial Development Fund to construct chemical plans in the kingdom.