Saudi Arabia’s Vision 2030 reform agenda has elevated the mining sector’s role in the Saudi economy, positioning it as a third key economic pillar as part of the National Industrial Development and Logistics Program. The kingdom’s focus on mining is driven by a desire to diversify the economy and increase non-oil revenue as it weans itself off oil dependence. Furthermore, minerals are key inputs in many industries essential to Vision 2030 objectives, such as achieving a green transition, digitizing the economy, becoming a global hub for technology and connectivity, producing nuclear energy, and localizing military procurement.

Vision 2030 identifies the mining sector as essential to achieving Riyadh’s target of net-zero carbon emissions by 2060. For example, Saudi Arabia hopes that its mining-powered green transition will bring the contribution of renewable energy to the overall energy mix to 50% by 2030. The kingdom is working to boost the contribution of the mining sector to its gross domestic product from $17 billion to $75 billion by 2030, which Saudi officials hope will create thousands of high-value jobs. Local mining investments are expected to reduce Saudi mineral imports from $19 billion currently to $11.5 billion by 2035, reducing costs and increasing the competitiveness of Saudi industries reliant on minerals.

To date, over 48 minerals have been identified in the kingdom, including marble, granite, gold, copper, and iron. These metals are being extracted rapidly, especially high-demand metals, such as aluminum and steel. Saudi Arabia has an estimated mineral wealth of $1.3 trillion and is seeking to attract nearly $200 billion in investments in the mining sector by 2030. The Saudi Arabian Mining Company, commonly known as Maaden, the Gulf’s largest mining company, is leading the mission alongside the Public Investment Fund.

Saudi Arabia created the Ministry of Industry and Mineral Resources in 2019 to accelerate the mining industry’s growth. To attract international and domestic investment, Saudi Arabia introduced a new mining law making it easier for companies to explore for and extract minerals and offering financial incentives. Saudi Arabia also increased the activities of the Saudi Geological Survey, which recently awarded a $207 million contract to the Chinese Geological Survey as part of a bid to complete, by 2025, 50% of the survey of Saudi Arabia’s Arabian Shield, a more than 230,000 square mile area of Precambrian rocks located in western Saudi Arabia.

Mapping Saudi Arabia’s mineral resources through the National Geological Database is intended to offer clearer information about potential mining investment opportunities. Moreover, Saudi Arabia recently established the Future Minerals Forum to spark discussions about international cooperation in the field. The Saudi Metal and Mining Exchange is being established as a stock market for mining companies and a mineral trading platform in cooperation with the National Stock Exchange of Australia, or NSX, and Saudi Ajlan, a leading investment holding company in the kingdom. More broadly, Riyadh believes its geographic location will also make it an appealing destination for investors interested in exporting.

Saudi Arabia is also seeking partnerships to utilize its mineral resources in the electric vehicle market. In July, the Saudi Ministry of Investment signed a $5.6 billion deal with Chinese electric car maker Human Horizons to collaborate on electric vehicle production. Riyadh aims to utilize China’s leading position in the global electric vehicle market to compete in the regional market for electric vehicles, which require batteries heavily dependent on minerals found in Saudi Arabia, including lithium and copper. The kingdom aims to manufacture and export more than 150,000 electric cars annually by 2026. In May 2022, Saudi Arabia announced a $6 billion project to build a steel plate mill complex for the shipbuilding, oil and gas, construction, and defense sectors and an electric vehicle battery metals plant. U.S.-based electric vehicle company Lucid Group began construction of an overseas plant in Saudi Arabia in 2022, which it expects to open by 2026 and eventually meet a 150,000 electric vehicle per year production goal. In November 2022, Saudi Arabia launched its first national electric vehicle company, Ceer Motors, in efforts to localize manufacturing.

Saudi Arabia’s mining aspirations also link to its nuclear power plans. The kingdom has engaged in negotiations to launch a civilian nuclear program with U.S. support as part of a broader agreement to normalize relations with Israel, though that may be less likely in the near future due to heightened regional tensions over the Israel-Hamas conflict. Saudi Arabia wants to use its domestic uranium reserves to fuel such a program despite Israeli objections to U.S. support for Saudi domestic enrichment. Saudi Arabia is also pursuing seabed mining to utilize the mineral and metal resources of the Red Sea, though environmental concerns and the lack of a specific regulatory framework may delay these plans.

Regional Partnerships and Competition

Saudi Arabia is setting up regional partnerships related to mining across the value chain – through investments, processing capacity, and finished goods. In June, Egypt and Saudi Arabia signed two agreements on cooperation in non-oil sectors, including the electric vehicle and mining industries. In August, Turkey and Saudi Arabia signed a memorandum of understanding for cooperation on critical minerals, including knowledge transfer and research on critical minerals used for solar panels and electric vehicles. Moreover, Saudi Arabia gave Mauritania $51 million in 2022 to develop iron ore mines through a joint venture.

Saudi Arabia is competing with other countries that are also attempting to gain a greater share in the mineral market and the electric vehicle industry by extension. In March, Iran claimed it discovered a massive deposit of lithium, potentially holding 8.5 million tons of the rare element necessary for building batteries and computer chips, giving it the second-largest lithium reserves in the world. Iran is also planning a $15 billion investment to boost copper production. In August, Algeria announced plans to spend up to $10 billion on developing an iron mine with a targeted yearly production capacity of 40 million tons.

Iran’s and Algeria’s prospective mining expansion can be a base for collaboration with Saudi Arabia, but it also highlights how regional competition for a place in the global mineral supply chain is intensifying. Even in the electric vehicle market, regional competition may hinder the viability of Saudi plans. Egypt, the United Arab Emirates, Jordan, and Bahrain in March discussed developing the first jointly produced Arab electric vehicle. Togg, the first major national Turkish electric vehicle manufacturer, aims to produce 175,000 vehicles annually. Meanwhile, Iran’s largest automaker, IKCO, unveiled its first electric vehicle in 2022. Iran is seeking to compete in the electric vehicle market by catering to countries such as Iraq, Syria, and Lebanon alongside its domestic market. Overall, the forthcoming regional competition for market share may undermine the economies of scale needed to support the Saudi mining industry’s input into a domestic electric vehicle market.

International Deals

On top of its domestic and regional initiatives, Saudi Arabia is seeking to build international partnerships and attract foreign investments. In July, Maaden acquired a 10% stake in Brazil’s base metals company Vale, through Manara, its joint venture with the PIF. Manara’s investment in Vale will help it expand production of copper and nickel. Maaden also acquired a 9.9% stake in mineral exploration and development company Ivanhoe Electric and established a joint venture to explore for copper, gold, silver, and other metals in Saudi Arabia.

Luxembourg-based Eurasian Resources Group has announced its intention to invest $50 million in the Saudi market for large-scale, tech-enabled early-stage exploration for battery transition minerals. In August, Jersey-based Royal Road Minerals Limited and Saudi MSB Holdings Limited established a joint venture to explore for copper, gold, and other metals in Saudi Arabia. Local Saudi investor Ajlan & Bros, in partnership with United Kingdom-based Moxico Resources, plans to invest $14 billion in developing mines and processing facilities by 2030.

The Wall Street Journal reported September 10 that the United States is in talks with Saudi Arabia to secure metals in Africa to aid in both countries’ energy transitions. It added the kingdom is seeking to buy $15 billion in global mining stakes to strengthen its position in the global race for cobalt, lithium, and other metals needed for building batteries and chips. The PIF has also discussed purchasing mining assets in the Democratic Republic of Congo via a $3 billion joint venture with Maaden.

Challenges for Saudi Mining

Despite such initiatives, some experts have expressed skepticism about the Saudi mining sector’s potential. One analyst called Saudi uranium reserves “severely uneconomic,” since the copper ore deposits in which the reserves are found are expected to only be found in small or medium-sized areas, which makes them less attractive for major global mining companies to mine than larger deposits. There are also concerns about limited water supplies in the desert and a lack of infrastructure. Moreover, international scrutiny regarding the environmental, social, and governance impact of the mining industry may limit international investors’ appetite to expand investments in the sector and engage in partnerships abroad.

Saudi Arabia and Global Competition for Minerals

In the 20th century, Saudi Arabia was a key supplier of oil for both the West and the developing world. Today, as the long-term demand for oil is projected to wane, Riyadh wants to reposition itself among Russia, China, India, Europe, and the United States as a leading global energy and connectivity hub. Having seen the strong position China enjoys in the global supply chain of rare earth metals and the advantages it brings, Saudi Arabia is seeking to learn from the Chinese experience and build a similar role for itself.

Riyadh is also interested in becoming a data hub and corridor, and access to minerals will help it secure resources to build and maintain necessary infrastructure. It is also seeking to be an integral part of the digitization of the global economy by becoming part of the global supply chain and trade of minerals. The recently announced India-Middle East-Europe Economic Corridor highlights the role Saudi Arabia aims to play as a global energy and connectivity hub.

These ambitions for Saudi Arabia’s still nascent mining industry are bold. The investments already made or anticipated are massive; and the prospects for collaboration with great powers and other countries and entities, variously endowed with mineral riches or high-tech exploration capabilities, are uniformly impressive. Impressive also, in their own right, are the challenges that Saudi Arabia will confront in this great mining venture. If fortune indeed favors the bold, particularly in business, strategic investment, and partnership, Saudi Arabia is well positioned to make good on its mining promise.