As part of Saudi Arabia’s Vision 2030 initiative, the country is making significant strides toward creating a sustainable economy driven by clean energy. To support this transformation, Saudi Arabia is increasingly focusing on expanding its mining sector to secure a strong position in global supply chains for essential minerals. While many countries struggle with a shortage of mineral resources, the African continent is becoming a focal point for countries seeking to meet the growing demand for minerals crucial to the energy transition.
Saudi Arabia is heavily investing in its mining industry to become a global hub for essential minerals and to ensure a steady supply of resources necessary for the energy transition. Over the past year, the country has made substantial investments in the exploration and development of its mineral reserves. This two-pronged approach aims not only to develop domestic resources for long-term growth but also to forge international partnerships with countries such as the US, select African nations, and India.
Saudi Arabia has recently updated its estimates of untapped mineral resources, with the total value increasing from approximately $1.3 trillion to $2.5 trillion. This surge in value is attributed to the discovery of additional reserves, the inclusion of new minerals in the resource estimates, and a revision of commodity prices. In November, Saudi Arabia revealed nine significant investment agreements in the metals and mining sector, totaling $9 billion. These investments highlight the vast quantities of essential minerals, including aluminum, copper, and rare earth elements, that the kingdom possesses. According to the Global Risks Report 2023, Saudi Arabia’s mining sector is one of the fastest-growing and most investment-friendly environments globally, seeing a 138% increase in mining licenses since the new Mining Investment Law was implemented in 2021.
This diverse mineral resource base is crucial as global demand for transition metals rises, driven by advancements in renewable energy technologies and electric vehicle production. Saudi Arabia’s mining strategy also includes offering new mining licenses, forming international partnerships, and prioritizing the exploration of strategic minerals required for battery production and renewable energy technologies.
However, Saudi Arabia still faces a challenge in meeting its local demand for copper, importing around 365,000 tonnes annually, with projections indicating that these imports will double by 2035. In response to this, key players in the mining sector, such as Vedanta Metals, are planning to develop a smelter and refinery with a capacity to process more than 400,000 tonnes of copper per year, meeting the demand for copper used in electrical cables.
Saudi Arabia is also investing heavily in geological research and analysis, utilizing modern technologies and international expertise to discover new mineral deposits. Notable initiatives include the Jabal Sayid Copper Project, a joint venture between Saudi Arabian mining company Al-Ma’aden, Barrick Gold, and the Al-Jalamid Phosphate Mine.
In summary, Saudi Arabia is actively transforming its mining sector to support its Vision 2030 objectives and position itself as a key player in the global mineral market. By investing in resource development and international partnerships, the kingdom aims to secure essential materials for the energy transition, which will play a critical role in its sustainable future.
