Minerals are again in the information, with President Donald Trump announcing on Wednesday that he’d reached an settlement on a doable deal on Greenland that would come with rights to rare earth minerals.
Critical and rare earth minerals underpin applied sciences propelling the clear power transition, AI and superior navy {hardware}, amongst others, and their manufacturing is dominated by China. It controls over 90% of the world’s output of refined rare earths and over 60% of rare earth mining manufacturing, in keeping with the International Energy Agency.
Speaking to NCS final week at the Future Minerals Forum in Riyadh, Saudi Arabia, Abigail Hunter, govt director of the Minerals Center at SAFE (Securing America’s Future Energy), a nongovernment group, described China as “light years ahead” of the US, “through decades of strategic investments, state-backed projects and coordination with the private sector, and investing internationally.”
But now Saudi Arabia is rising its mineral sector, to cut back its financial dependence on oil and, in keeping with analysts, enhance its geopolitical affect.
Saudi claims it has $2.5 trillion in mineral reserves. These embody gold, zinc, copper and lithium, but additionally rare earth deposits, together with dysprosium, terbium, neodymium and praseodymium, that are used in all the pieces from electrical automobiles and wind generators to high-speed computing.
Saudi Arabia’s price range for exploratory mining elevated 595% between 2021 and 2025, per S&P Global (although it continues to be modest by the requirements of superior mining nations like Canada and Australia). Licensing new mining websites to home and worldwide firms has gathered tempo.
But exploration is one factor, finish product is one other. “The reality is mining is a really long game,” mentioned Hunter. “It takes three to five years to build a processing plant. It can take up to 29 years in some jurisdictions.”
The nation is slicing pink tape, decreasing tax charges for mining funding and intends to spend huge to meet up with established gamers.
At the Future Minerals Forum, state-owned mining firm Maaden introduced it would make investments $110 billion in metals and mining over the subsequent decade, together with coming into into worldwide partnerships and attracting business expertise. “We’re humble enough to realize we can’t do it alone,” mentioned Maaden CEO Bob Wilt, talking at the occasion.
The worth of Saudi Arabia’s minerals nonetheless pales in comparability to the worth of its oil (Saudi has the second largest proven reserves in the world). But there are different causes the nation is investing in the sector.
Saudi’s Vision 2030 plan goals to diversify the nation’s financial system and names mining as a key pillar. Its plan goes past simply mining minerals and consists of constructing out its provide chain for home industries — for instance, the nation has set ambitious targets for electric vehicle manufacturing.
Experts say Saudi’s rising infrastructure could additionally place the nation as a regional hub for refining crucial minerals mined elsewhere.
“Looking to the Global South and partnering with African countries … logistically, it makes a lot of sense for us to be able to process more minerals here,” mentioned Hunter.
Saudi Arabia’s ambitions have drawn the curiosity of the US. In the previous, after extracting its personal heavy rare earths, the US has sent material to China for refining. Last 12 months, China tightened export controls on heavy rare earths, many of which have military applications.
Last November, throughout a state go to to Washington, Saudi Arabia introduced it would make investments as much as nearly $1 trillion in US infrastructure, expertise and business. Part of that deal included a bilateral collaboration on minerals. US firm MP Materials (which is backed by the Pentagon) introduced that it would companion with Maaden and the US Department of Defense to construct a new refinery in Saudi Arabia, which would be 49% owned by MP Materials and the Department of Defense.
Melissa Sanderson, co-chair of the Critical Minerals Institute, a suppose tank, mentioned that Saudi Arabia’s greatest asset as a processing hub is its “reliable quantities of energy,” together with the experience of state-owned power firm Aramco, which could develop improved refining methodologies, “potentially displacing China as a lower-cost, more environmentally friendly processor,” she speculated.
Its environmental credentials stay to be seen. Saudi Arabia was amongst a group of resource-rich international locations who at the current United Nations Environment Assembly opposed a part of a draft decision of a treaty seeking greater supply chain transparency and to restrict the environmental hurt of mining.
Sanderson indicated that its transition to a mining hub might not all be clean crusing. Instability in the Middle East stays a problem, together with a combined bag of diplomatic relations between Saudi Arabia and African nations with mineral wealth. That mentioned, the kingdom could flip to Central Asian international locations with their very own deposits, the place Aramco has longstanding relationships, she mentioned.
“In many ways, the economic transformations underway (in Saudi Arabia) are designed more to elevate the political standing of the country … (to) an essential player — a pivot point, if you will — in a geopolitical scenario,” mentioned Sanderson.
“This is not a game about immediate return,” she added. “This is a strategy about long-term power and long-term influence and long-term gain.”