Saudi Arabia’s Mining Ambition: The Next Global Minerals Powerhouse?
Saudi Arabia is making a significant leap in its mining industry, underlined by an impressive array of investments and strategic initiatives. With a total investment of $100 billion in new mineral projects, the country is set to transform itself into a dominant player in the global mining arena. This ambitious endeavor highlights the Kingdom’s emergence as a mining hub, focusing on expanding its exploration and production capabilities for critical minerals.
Expanding Exploration and Production
The Kingdom’s strategy is multifaceted, with plans to explore and extract lithium, copper, gold, zinc, phosphate, and nickel. Notably, the Ministry of Industry and Mineral Resources increased its valuation of unexploited mineral resources from $1.3 trillion to $2.5 trillion, driven by the discovery of these elements. This doubling of value underscores the immense potential of Saudi Arabia’s mining sector.
Strategic Investments
At the heart of this transformation is the $20 billion investment in projects already in the final engineering phase or under construction. The rapid development is driven by a sense of urgency, with Energy Minister Abdulaziz bin Salman emphasizing that mining activities must be conducted “as fast and furious as possible.” This urgency is partly due to the Kingdom’s commitment to diversifying its economy away from oil dependence and into sustainable and high-value sectors like mining.
Key Collaborations
One of the flagship projects is the collaboration between Saudi Aramco and the state mining company Ma’aden to explore and produce energy transition minerals. This joint venture aims to capitalize on the promising lithium concentrations identified in the Kingdom’s oilfields, which exceed 400 parts per million. With lithium being a critical component for batteries in electric vehicles and advanced technologies, Saudi Arabia is positioning itself as a key player in the global energy transition landscape.
Global Supply Chain Resilience
In addition, the establishment of Manara, a venture between Ma’aden and the Public Investment Fund (PIF), signifies a strategic move to secure and develop mining assets globally. Manara is set to enhance the resilience of supply chains by investing in mining operations around the world. This proactive approach ensures that Saudi Arabia can meet its resource demands while contributing to global supply stability.
Mineral Processing Hub
The Kingdom’s drive to become a hub for mineral processing is also noteworthy. With roughly two-thirds of the global lithium processing market controlled by China, Saudi Arabia is aiming to create more resilient and diversified supply chains. The successful extraction of lithium from brine samples in Aramco’s oilfields, along with the commercial pilot program in collaboration with local startup Lithium Infinity, marks a significant milestone in this endeavor.
Development of Wa’ad Al-Shamal
February’s latest news unveiled that Wa’ad Al-Shamal city is emerging as a major hub for the Kingdom’s mining industry, with nearly SR29 billion ($7.7 billion) in investments. The launch of Ma’aden’s Phosphate 3 project, supported by the Shareek program, is set to significantly boost Saudi Arabia’s phosphate production capacity to 9 million tonnes annually. This expansion will bolster the country’s industrial supply chain, generate new investment opportunities, and create employment within the sector.
The city has transformed into a model for integrated industrial cities, combining major industries, logistics services, and modern residential communities. The development includes infrastructure projects, such as a 132 kilovolt, 200 megavolt-amperes power substation, overhead transmission lines, and a 7-km bridge connecting the industrial zone to the international highway. These projects aim to improve logistics and energy reliability, creating an attractive environment for investments, particularly in the phosphate industry.
Incentive Programs and Infrastructure Development
Moreover, the government’s $182 million incentive program for minerals exploration further highlights its commitment to fostering a robust mining ecosystem. By developing modern infrastructure, including new industrial projects and residential units, Saudi Arabia is creating an attractive environment for both local and international investors.
Saudi Arabia’s ambitious mining projects are set to propel the Kingdom to the forefront of the global mining industry. With substantial investments, strategic collaborations, and a commitment to rapid development, Saudi Arabia’s emergence as a mining hub is poised to redefine the global minerals market. The Kingdom’s focus on critical minerals and energy transition elements aligns perfectly with its Vision 2030 goals, ensuring sustainable economic growth and diversification.
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