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Cobalt refinery to support Saudi EV ambitions

Saudi minister of industry and mineral resources Bandar Al-Khorayef at the inauguration of Lucid Motor's first EV manufacturing plant in Saudi Arabia SPA
Saudi minister of industry and mineral resources Bandar Al-Khorayef at the inauguration of Lucid Motor's first EV manufacturing plant in Saudi Arabia
  • Essential for EV batteries
  • ERG partners with Thara
  • Supply chain strengthened

A European mining company has announced plans to develop a refinery in Saudi Arabia to process cobalt hydroxide into cobalt sulphate, which is used in electric vehicle (EV) batteries.

Luxembourg-based Eurasian Resources Group (ERG) said the project aims to strengthen its position as a strategic supplier to the chemicals sector, particularly in batteries for EVs.

ERG said it has identified the kingdom as a potential host for the refinery and is partnering with Saudi-based Thara Future Investment Company to jointly investigate and pursue the investment.

Saudi Arabia has set a goal to produce 500,000 EVs annually by 2030 and it has unleashed the financial firepower of the $700 billion Public Investment Fund to make this a reality. 

PIF has pledged to buy up to 100,000 vehicles over a 10-year period from the California-based manufacturer Lucid, in which it has a 60 percent stake and has invested $5.4 billion since 2018.

It has also formed a joint venture with the Taiwan-based company Foxconn, best known as a supplier to Apple, to create Ceer, the kingdom’s own EV brand, which is due to launch in 2025. 

“ERG expects sustained market penetration of electric vehicles to drive a quadrupling of demand for cobalt-bearing batteries through 2030,” said Benedikt Sobotka, CEO of ERG. 

“Joining forces with Thara will accelerate our potential development of a cobalt sulphate refinery in the kingdom.”

The refinery will be supplied with cobalt hydroxide from ERG’s Metalkol facility in the Democratic Republic of the Congo.

ERG holds vast cobalt resources in the DRC and is one of the largest suppliers of cobalt hydroxide globally. “The planned cobalt refinery project is considerably de-risked,” said Sobotka.

The project is the latest to be announced in Saudi Arabia to develop its materials supply chain. 

In June, Obeikan Investment Group and the Australian startup European Lithium announced a joint venture to build and operate a lithium hydroxide refinery in the kingdom. 

The following month, the Saudi state mining company Ma’aden and the US-based company Ivanhoe Electric closed a deal to investigate 48,500 sq km of under-explored lands in the Arabian Shield for lithium and other rare metals.

In September, the Saudi investment company Energy Capital Group also announced a collaboration with the US tech startup Pure Lithium to develop batteries using lithium extracted from oilfield brines.

ERG has exploration, mining, processing, energy and logistics operations in Saudi Arabia, Kazakhstan, Africa and Brazil and is a growing supplier of critical raw materials that are enabling the global energy transition.

It launched in Saudi Arabia with an initial $50 million investment last year to help meet the surging demand for battery metals.

ERG is also a founding member of the Global Battery Alliance which is dedicated to establishing a sustainable global supply chain for the lithium-ion batteries.

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