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Saudi Arabia Makes Emphatic Entrance onto Critical Minerals Stage — With Implications for U.S. and Allies

Earlier this month, industry stakeholders and investors flocked to Riyadh, Saudi Arabia to attend the kingdom’s Future Minerals Forum.  Reports that Saudi Arabia was throwing its hat into the critical minerals ring had made headlines on several occasions throughout 2023, but the kingdom’s growing importance was palpable at the event, which previously had not been “on the circuit for most of the industry’s biggest players.”  According to Bloomberg, the event drew about 16,000 delegates, among them top representatives from nearly every leading mining company and a significant contingent of U.S. government officials.

As ARPN noted in 2023, Saudi Arabia’s Crown Prince Mohammad bin Salman is preparing to invest billions of dollars into the mining sector to harness the potential of more than $1.3 trillion worth of metals and minerals the Saudi government claims are buried in the kingdom in the context of his Grand Vision 2030 plan to transform the Saudi economy.  If successful, he would make mining the so-called “third pillar” of the economy next to oil and gas.

More specifically, the kingdom is looking to secure access to materials ranging from the battery criticals to other 21stcentury tech metals which are to be processed by new refineries and smelters to feed a “wider industrial network” across the country.

But what does Saudi Arabia’s “plunge into the world of mining” mean for the rest of the world, and especially the United States and its allies?

Thomas Biesheuvel, writing for Bloomberg’s Energy Daily, believes that the emergence of Saudi Arabia will make it “even harder for the U.S., Europe and Japan to secure the battery minerals they want.”

Says Biesheuvel:

“Saudia Arabia crashed into the world mining scene in the middle of last year with a $2.6 billion deal to buy 10% of Vale SA’s base metal unit, beating off competition from Qatar and Japan in the process.

It’s looking to buy more stakes in foreign mining operations through Manara Minerals Investment Co., a vehicle established by the kingdom’s powerful sovereign wealth fund and Saudi Arabian Mining Co. In doing so, it wants to secure metal offtake in return.”

Biesheuvel argues the model is similar to one long deployed by Japan’s commodity trading houses, but Saudi Arabia’s Mantra is state backed, and can “deploy capital with long-term strategic goals in mind.”

He concludes:

“That poses a challenge for countries such as the US, which is rushing to catch up. There have been suggestions the nation could piggyback off Saudi ambitions to secure its own supplies — essentially subcontracting out the heavy lifting.  But Saudi Arabia’s focus is to develop its own industry, and it’s becoming clearer that it will work with any country that helps achieve those goals.”

Reports in the fall of 2023 indicated that auctions for exploration licenses in the kingdom had only attracted smaller players thus far, but ARPN posited at the time that the crown prince’s willingness to take commercial risks might draw in the big players before long.  The buzz around this month’s Future Minerals Forum clearly points in this direction.

Saudi Arabia has clearly taken note that we are leaving the Petro Age, and is taking steps to position itself in a post-Petro Tech Metals Age.

Meanwhile, the U.S. has taken several positive steps to strengthen domestic supply chains, but, with the U.S.-Chinese trade war showing signs of intensifying and other players — like Saudi Arabia — making an emphatic entrance onto the world stage of the resource wars, it is time to cast aside simplistic “not in my backyard,” or “keep it all in the ground” mantras that still appear to hamper U.S. resolve, and to push forward with a comprehensive all-of-the-above critical mineral resource strategy.