Skip to content Skip to Search
Skip navigation

Saudi hunts for critical minerals in energy transition

Mining and processing lithium is becoming more attractive as it is a vital component of electric vehicle batteries
  • Ma’aden and Ivanhoe Electric to explore for minerals in Arabian Shield
  • Saudi Arabia wants lithium to fuel its electric vehicle ambitions
  • Ma’aden and Saudi PIF have a fund of up to $3bn for overseas mining

Saudi state mining giant Ma’aden and US-based Ivanhoe Electric have closed a deal to investigate 48,500 sq km of under-explored lands in the Arabian Shield for “critical minerals” that are key to powering the global energy transition.

Surveys could begin as soon as September in the new joint venture, which is worth nearly $130 million.

The Saudi region – roughly the size of Switzerland – is understood to be rich potential for critical minerals such as copper, nickel, gold, silver and possibly lithium.

Lithium is of great interest to Saudi Arabia as it is a key component of EV batteries. The kingdom wants to develop a significant industry around electric vehicles and to produce 500,000 electric cars a year by 2030.

Last month, Australian startup European Lithium and Saudi Arabia’s Obeikan Investment Group announced a joint venture to build and operate a lithium hydroxide refinery in Saudi Arabia. 

A long-term supply agreement has also been signed with BMW.

The plan builds on an agreement signed in 2021 with EV Metals Groups to build a battery chemicals complex in Yanbu Industrial City in Al Madinah.

Refinery ambitions

Ionut Lazar, principal consultant at CRU Consulting, told AGBI that Saudi Arabia could play a big part as a primary processor.

He said the kingdom is considering development of a large-scale copper smelter, plus smelters or refineries for silicon, aluminium and nickel. 

“The kingdom continues to offer attractive power tariffs and financial incentives to create industrial clusters,” Lazar explained. “These advantages have attracted market-leading players to the region.”

Experts believe that while Saudi Arabia has enough mined copper to justify smelting facilities, the prospects for critical mineral refining projects that would rely on imported material are less certain.

Christopher Ecclestone, strategist and principal at Hallgarten & Company, said Saudi Arabia might have the funds to become a player but not yet the expertise.

“They need to put their money where their mouth is and quickly,” he said, referring to a fund set up by Ma’aden and the Public Investment Fund earlier this year to invest in mining assets overseas.

Initially sized at $50 million, the fund could grow to over $3 billion, the two parties said in January. 

A quickly growing market

Last week, the International Energy Agency (IEA) said the market for minerals that help power electric vehicles, wind turbines, solar panels and other technologies key to the clean energy transition has doubled in size over the past five years.

It said record deployment of clean energy technologies is propelling huge demand for minerals such as lithium, cobalt and nickel. 

People, Person, AdultERG
Luxembourg’s Eurasian Resources Group is committing $50m to battery mineral exploration in Saudi Arabia

From 2017 to 2022, demand for lithium has trebled, while cobalt (70 percent) and nickel (40 percent) have also gained. The market for energy transition minerals reached $320 billion in 2022.

Saudi Arabia sees mining as central to its Vision 2030 strategy to diversify its economy outside of fossil fuels. The kingdom values its mineral wealth at more than $1.3 trillion.

Luxembourg’s Eurasian Resources Group is investing an initial $50 million to large-scale, early-stage exploration for battery transition minerals in the Ad Dawidimi region.

CEO Benedikt Sobotka told AGBI: “If we are to meet the increasing demand for secure, sustainable and responsible mining, we must first invest in territories that have been previously overlooked and under-explored – that’s why ERG made a significant investment into Saudi Arabia.” 

He added: “The potential for establishing state-of-the-art processing facilities for critical battery metals is extremely important. Such effort would align with the kingdom’s comprehensive industrial development strategy and help bridge the gap — improving sustainable access across the sector.” 

To date, the production of critical minerals is highly concentrated geographically, raising concerns about security of supplies. 

The Democratic Republic of Congo supplies 70 percent of cobalt and Indonesia has 40 percent of nickel. Australia accounts for 55 percent of lithium mining and Chile for 25 percent, according to the IEA. 

Processing of these minerals is also highly concentrated. China, for example, is responsible for refining 90 percent of rare earth elements and 60-70 percent of lithium and cobalt.

Latest articles

Terminal, Railway, Train

Alstom to upgrade driverless transit system at Jeddah airport

French train maker Alstom will upgrade the automated and driverless passenger transit system at King Abdulaziz International Airport, as the Jeddah airport aims to receive 114 million passengers by 2030. As part of the contract, Alstom will design, engineer, supply, integrate, test and commission a complete system upgrade of its Innovia automated people mover (APM) at the airport’s terminal […]

Abu Dhabi to generate 50% power from green sources by 2030 

Abu Dhabi plans to generate more than half of its electricity from renewable and clean energy by 2030, a senior Emirates Water and Electricity Company (Ewec) official has said. The state-owned entity is intensifying the emirate’s solar energy production plan to 7.6 gigawatts (GW) by 2030, the UAE state-run Wam news agency reported, quoting CEO Othman Juma […]

An Acwa Power solar facility in Saudi Arabia. The Bank Of China loan will help finance its solar projects in Uzbekistan

Acwa Power takes China bank loan in first for Saudi Arabia

Saudi energy major Acwa Power has secured an $80 million loan from the Bank of China as the appeal of the Chinese Renminbi as a trade currency gains traction in the GCC. Acwa Power, the world’s largest private water desalination company and a first mover into green hydrogen, has received the equity bridge loan to […]

Solar power panel

Cost of Xlinks Morocco-UK project balloons by a third

The cost of an ambitious project to deliver green energy from the south of Morocco to power homes in the UK has ballooned by more than a third to $30 billion. Xlinks First is behind the Morocco-UK renewables project, which would construct the world’s longest high-voltage direct current (HVDC) subsea power cable between the North […]