Saudi Arabia, long synonymous with its oil-rich economy, is making significant strides to diversify by tapping into the global race for critical minerals. The recent mining conference held in Riyadh served as a battleground for world powers, with the United States, China, and Russia vying for access to the kingdom’s abundant natural resources. The move is part of Saudi Arabia’s broader Vision 2030 strategy, initiated by Crown Prince Mohammed bin Salman, aimed at transforming the nation’s economy by fostering new industries unrelated to oil.
The Global Rush for Critical Minerals
1. Strategic Location and Resources
Riyadh’s claim to be a neutral party, capable of conducting business with all sides, positions Saudi Arabia as a strategic hub between Central Asia, the Middle East, and Africa. The kingdom asserts that this “super region” holds at least a third of the world’s natural resources, including critical minerals crucial for the global energy transition away from fossil fuels.
2. Diplomacy and Investments
The mining conference in Riyadh was not just about financial deals; it also provided an opportunity for foreign governments to strengthen diplomatic ties with Saudi Arabia. The kingdom’s investment in mining is a substantial part of its economic diversification plan, attracting government officials and top mining executives from around the world.
3. Economic Diversification Through Mining
Saudi Arabia envisions mining as the third pillar of its economy, alongside hydrocarbons and petrochemicals. The ambitious goal is to leverage the untapped mineral wealth, estimated at $2.5 trillion, to drive economic growth and reduce dependence on oil-related industries.
Saudi Arabia’s Mining Initiatives
1. Manara Minerals: A Key Player
Launched in 2021, Manara Minerals, a joint venture between Saudi Arabia’s sovereign-wealth fund and state-owned mining company, has become a key player in the kingdom’s mining landscape. With plans to invest more than $15 billion globally in mining assets, Manara has already made significant acquisitions, including a 10% stake in Brazilian miner Vale’s base-metals unit.
2. Global Mining Investments
The kingdom is not limiting its ambitions to domestic projects; it is actively seeking foreign investments in its mining industry. Talks with Pakistan on investing in the Reko Diq project, one of the world’s largest copper mines, highlight Saudi Arabia’s commitment to expanding its global footprint in the mining sector.
3. Revised Estimates and Increased Interest
Saudi Arabia’s revised estimates of its untapped mineral wealth to $2.5 trillion, up from $1.3 trillion in 2016, have sparked increased interest from international mining companies. The number of applications for mining permits from global firms has doubled since the previous year’s conference.
Global Powers and Saudi Arabia: A Delicate Balancing Act
1. United States: Diplomacy and Collaboration
The robust U.S. government presence at the mining conference signifies improving relations with Saudi Arabia. The memorandum of understanding signed with the U.S. Export-Import Bank focuses on financing U.S. exports to Saudi Arabia and collaboration in critical minerals projects. The U.S. is working with allies to counter China’s dominance in critical mineral supply chains.
2. Russia: Geopolitical Cooperation
Russia’s agreement with Saudi Arabia emphasizes cooperation in geology and mineral resources. The Russian Direct Investment Fund expresses a willingness to work with other nations, sharing expertise and technology. Geopolitically, this signals a collaborative approach to harnessing natural resources.
3. China: A Strategic Pivot
Saudi Arabia’s pursuit of business with China aligns with its larger geopolitical pivot to build stronger relations with Beijing. By becoming less dependent on the U.S., Saudi Arabia aims to enhance its influence in the global arena. Chinese mining companies, such as CMOC Group, see the region as strategically appealing for its abundant resources and prime location.
Saudi Arabia’s Ascent in Global Mining
As Saudi Arabia positions itself at the center of the global race for critical minerals, its mining ambitions become a key driver in the nation’s economic diversification. The kingdom’s commitment to becoming a major player in the mining industry opens avenues for international collaboration and investment. As world powers navigate the delicate balance of diplomatic relations and resource access, Saudi Arabia emerges as a pivotal player in shaping the future of global mining and critical mineral supply chains. The mining conference in Riyadh serves as a testament to the kingdom’s ambition to transform its economic landscape and play a central role in the global energy transition.