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Saudi Arabia’s quest for mineral riches: Diversifying beyond oil

Saudi Arabia is eyeing a transition beyond its oil-centric economy, targeting the vast mineral resources hidden beneath its soil, valued at over $2.5 trillion. Khalid al-Mudaifer, the kingdom’s Vice Minister for Mining, outlined Saudi Arabia’s ambitions to leverage its mineral wealth, not only for domestic development but also to establish a prominent role in the global minerals market.

Under its ambitious “Vision 2030” initiative aimed at economic diversification, Saudi Arabia is positioning mining as a fundamental pillar alongside oil, gas, and petrochemicals. This strategic move is crucial for the kingdom’s long-term economic resilience, especially amid projections of declining revenues from fossil fuels.

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Al-Mudaifer emphasized the importance of maximizing the value of mineral resources to drive economic growth. The kingdom’s focus extends beyond mere extraction to capturing value across the entire mineral value chain, particularly targeting high-value sectors like electric vehicle (EV) manufacturing and battery production.

Saudi Arabia’s mineral potential is significant, with estimates suggesting trillions of dollars’ worth of untapped resources, primarily in phosphate and rare earths. However, the kingdom recognizes the need for international partnerships to access critical minerals not abundant within its borders, such as nickel, cobalt, and lithium.

To address this, Saudi Arabia has established the Manara Minerals fund, aiming to secure mineral supplies globally and potentially facilitate their processing within the kingdom. This strategic investment aligns with Saudi Arabia’s vision of becoming a regional hub for mineral processing and refining.

While Saudi Arabia acknowledges the importance of collaboration in the global minerals market, it remains cautious about formal alliances like the Minerals Security Partnership (MSP). Unlike the oil market, minerals’ extraction and refining processes are more dispersed globally, making broader partnerships more favorable than OPEC-style alliances.

In essence, Saudi Arabia’s mining ambitions represent a significant shift in its economic strategy, aiming to leverage its mineral wealth to drive sustainable growth, diversify its economy, and establish a prominent position in the global minerals market.

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