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Saudi Arabia targets Chile for lithium investments

Two companies are dominant in the lithium industry – Chile’s SQM and US business Albemarle. In 2023, each commanded about 20 percent of global supply Creative Commons/Maria Vilaró
Two companies are dominant in the lithium industry – Chile’s SQM and US business Albemarle. In 2023, each commanded about 20 percent of global supply

Saudi Arabia’s mining minister Bandar Alkhorayef will visit Chile next month to negotiate a deal to secure lithium to support the kingdom’s ambition to expand its electric vehicle (EV) sector, a news report said.

Alkhorayef will meet with his counterpart in Santiago, Reuters reported, quoting a Chilean government statement.

The report said the two officials will discuss potential lithium industry investments.

The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, owns 60 percent of Californian EV manufacturer Lucid, with its investments reaching $5.4 billion since 2018.

In May 2023, Lucid announced its latest capital raise of $3 billion, including a $1.8 billion investment by a PIF affiliate.

The EV maker opened its first car manufacturing facility last September in King Abdullah Economic City, which will have the capacity to assemble 5,000 vehicles per annum in the first phase.

In March, Ceer, Saudi Arabia’s first electric vehicle brand, awarded a SAR5 billion ($1.3 billion) contract to construct a manufacturing complex in King Abdullah Economic City.

Raw lithium is used primarily in battery manufacture and is extracted via two processes: mining of metal-bearing rocks – which accounted for about 57 percent of global supply in 2023 – and distillation from brine, which accounted for the rest. 

Lithium is one of the most abundant metals on Earth because of its presence in salt water, explains Martin Jackson, head of battery raw materials at metals and mining analyst CRU. 

Two companies are dominant in the industry – Chile’s SQM and US business Albemarle. In 2023, each commanded about 20 percent of global supply.

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