Trafigura Group signed a $500 million credit facility with the Saudi Export-Import Bank, which it will use to buy non-crude oil commodities from the kingdom.
The three-year deal announced on Wednesday gives Trafigura, one of the world’s top commodities houses, a big new chunk of credit tor trading at a time when energy prices are rising again. The facility covers all commodities produced in Saudi Arabia other than crude.
“This will enhance the opportunities for Saudi producers of commodities such as copper, gold and downstream products to access global markets,” Trafigura executive chairman and CEO Jeremy Weir said in the announcement.
Oil giant Saudi Arabia has been expanding its footprint in other commodities as part of the Vision 2030 program to broaden its economy beyond crude. Mining and exporting the country’s rich but under-explored resources has been described as a “pillar” in the strategy, but while it has been able to strike deals for overseas investment, driving domestic production has been less successful.
“Such credit facilities come as part of our ongoing efforts to expand the global reach of Saudi exports,” said Naif Al-Shammari, deputy CEO of Saudi EXIM.
Trafigura, whose executive committee is weighted with an energy trading background after a recent reshuffle, has structured similar credit-linked deals with Germany and Italy. They are to supply the countries with gas, metals and other key commodities at a time when exports from Russia have been cut following the escalation of war in Ukraine.
(By Archie Hunter)
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