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Following a summer of record high temperatures, the world’s governments are increasingly aligned in their plans to move beyond fossil fuels and electrify their economies. However, a decade of depressed commodity prices, falling capex budgets and weak merger and acquisition activity in the mining sector has meant that the key minerals required to build wind turbines, power batteries and wire electric cars face supply crunches. There are few major copper and nickel mines on the horizon. Lithium and rare earth production will struggle to keep pace with surging demand and the refining and processing of these crucial elements is concentrated in a tiny number of countries. In this challenging market outlook, the emergence of Saudi Arabia as both a destination for mining and as a hub for global refining and processing of critical minerals as part of its Vision 2030 strategy provides welcome relief. The Gulf Kingdom stands uniquely placed to provide the leadership, experience and capital needed to tackle one of the world’s key challenges in the coming decades.

Saudi Vision:

Since his appointment as Crown Prince in June 2017, Mohammed bin Salman Al Saud has embarked on several eye-catching and far-sighted projects designed to diversify the economy and shake up the national image: a US$500 billion green city for nine million inhabitants; a floating manufacturing and logistics city in the Red Sea; a professional soccer league attracting some of the biggest names in the game. A decisive move into mining and mineral processing could be the most ambitious move yet. It would require massive industrial investment but, given the market conditions, could reap huge future dividends for the economy. Already the world’s top oil exporter and a top-ten exporter of petrochemicals, Saudi Arabia looks set to add critical minerals production as the third pillar of its economy to drive industrial growth. Few other countries have the natural resources, the top-down leadership or the capital to do it.

In March 2023, Mining Journal conducted a research survey among 50 global respondents from mining organisations with less than 10,000 employees. The sample was pulled from respondents in management roles aligned primarily with operations/technical functions. Click to view a snapshot of their responses.

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Emerging Super Region:

It is outside Saudi Arabia’s borders, though, that the Kingdom’s minerals strategy is at its most ambitious. The plan identifies a ‘super region’ encompassing Africa, the Western, Central Asia and India covering a third of the world’s total land area and home to over 3.5 billion people. It is also host to major deposits of the minerals and metals essential for the energy transition, including coltan and copper in central Africa, phosphate and potassium projects in Jordan and the world’s largest uranium deposits in Kazakhstan.

A voice for the region – new perspectives in a global conversation:

The Kingdom’s own minerals industry contributed around $17 billion to its economy in 2022, equivalent to about 2% of gross domestic product, mainly through phosphate, bauxite and gold production. However, Saudi officials say they have estimated $1.3 trillion of untapped mineral deposits within the territory and are targeting a tripling of mineral production to $64 billion in the coming decade. They expect the identified resources to double on the back of wide scale geological surveys. Following the introduction of a new mining code that included easing rules on foreign investment and streamlined the permitting process, over 400 new exploration licences have been approved, with the world’s majors bidding for contracts in the most attractive prospects. 

“The Saudia Arabian entry as a major global force of mining and processing of all kinds of metals and minerals, including critical minerals is significant…it’s more than just signalling,” Colorado School of Mines professor of public policy Morgan Bazilian told Mining Journal. “Saudia Arabia knows how to take on these long-term, difficult engineering tasks with aplomb.”

This new-found experience as a ‘global force’ could see Saudi Arabia come to play a critical role in the super region’s minerals strategy. In the past, many of these super region countries have struggled to develop their natural resources. Poor road, rail and port infrastructure has kept many deposits stranded, while a lack of available capital and a scarcity of qualified talent has pushed up costs. Through the creation of strategic partnerships with local governments and corporations, Saudi Arabia can become a key enabler, bringing fresh perspectives to the conversation while also helping to develop new mines and build the infrastructure needed to export production to refining and processing sites within the kingdom.

Future Minerals Forum:

To bring the region together, the Ministry of Industry and Mineral Resources established the Future Minerals Forum (FMF) to become a government-led platform that brings together international decisions makers to work out how the region can maximize benefits from its collective mineral endowments, through establishing minerals and metals value chains that have local communities at their heart, and ultimately improving the quality of lives around mining operations in the super region. The FMF has quickly become one of the leading events for shaping and influencing the global discussion on minerals, as it brings together governments, industry and civil society. The FMF is leading initiatives to develop regional critical minerals strategies; enhance sustainability performance through traceability and certification; create centers of excellence in the super region; and develop hubs for decarbonized metals production.

Turning talk into action:

Following global best practices, the Saudi Arabian strategy is to help countries in the super region achieve a “just and equitable” transition of the economy, according to the vice minister of industry and mineral resources, Khalid bin Saleh Al-Mudaifer. Projects would benefit from the latest mining technology, clean energy from hydrogen and other sources, and would develop international sustainability standards centred on transparency and certification that reflect the views of host countries. 

Saudi Arabia also anticipates being able to play a similar role in the super region to that which the Canadian and Australian mining ecosystems currently play for the Americas and East Asia respectively. This is particularly the case with respect to talent and manpower: with over $32 billion in investment earmarked for mineral processing projects (in addition to an existing $4 billion steel plate mill complex and a $2 billion electric vehicle battery plant), the Kingdom is expected to become a natural headquarters for many mining service companies. Work is underway on developing ‘centres of excellence’ that can link up the super region and build capacity to help underpin these new mineral industries by providing a new generation of skilled workers; expanding geological surveying and providing more transparent access to mineral data to attract more investment; and developing and deploying new technologies. 

Through mapping the mineral chain potential in the super region, attracting investment in exploration and mine building, and developing the supply chains and processing infrastructure, Saudi Arabia would provide crucial leadership and direction towards a resilient and responsible mineral value chain. Meanwhile, super region countries would benefit through investment, jobs and royalties, and would likely relish the opportunity to work alongside new partners beyond the traditional North American and European investors, according to Sheila Khama, a sustainable development expert. 

“The Saudis are offering the African countries the opportunity to break with history…they are not marching to the orders of a colonial power,” she told Mining Journal. “The Saudis have been very successful [in the development of the petroleum sector]. There is an opportunity for peer learning, for African countries to take the opportunities presented by the growth in demand for critical minerals.”

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