Saudi Arabia is working to balance its long-established oil dominance with the development of its mineral resources, with the goal of expanding the role of its mining industry in the national economy. Currently, the mining sector contributes approximately US $17 billion to the country’s GDP, but the Kingdom is aiming for a significant increase, targeting US $75 billion by 2035.
The Saudi Arabian Mining Company (Ma’aden), a key state-owned entity, plays a central role in the country’s mining strategies, forming partnerships to develop mineral resources and manage major projects. To support these efforts, Saudi Arabia has launched a $182 million exploration incentive program and granted 33 new mining licenses.
Building partnerships to enhance mining capabilities
Saudi Arabia has been proactive in engaging with international players to strengthen its mining industry. Recent agreements with countries such as the Democratic Republic of the Congo, Turkey, Egypt, Morocco and Russia demonstrate the Kingdom’s drive to enhance its capabilities and influence in the global energy transition.
The Kingdom’s focus on rare earth minerals is particularly significant, especially with its push to secure access to lithium. Lithium is crucial for the production of electric vehicle (EV) batteries and is considered a key resource in the global transition to cleaner energy solutions. In collaboration with Turkey, Saudi Arabia signed a Memorandum of Understanding (MoU) to exchange knowledge and research on minerals essential for EVs and solar panels. As Mining Vice Minister Khalid al-Mudaifer explained, the Kingdom aims to position itself as a commercial, refining, and research hub for sectors reliant on these critical minerals, including EV manufacturers and battery producers.
Expanding focus on Africa for rare earths
As the global transition to a clean economy hinges on the extraction of minerals for technologies such as EV batteries, wind turbines, and solar panels, Saudi Arabia is tapping into opportunities in Africa. Reports suggest that the country is leveraging its financial resources and expertise to partner with African nations to meet its growing demand for rare earth minerals. Additionally, the Saudi Fund for Development has signed agreements worth $553 million to support African nations facing debt challenges.
Demand for rare earth materials, which are critical for electronics, renewable energy technologies, and national defense, is expected to rise sharply, reaching 315,000 tons by 2030. Saudi Arabia’s investment in Africa positions it strategically in this rapidly growing market.
Geopolitical context and Saudi Arabia’s role
The geopolitical landscape is influencing Saudi Arabia’s mineral strategy, particularly in the context of the EU’s growing need for strategic mineral partnerships. The ongoing U.S.–China rivalry and Russia’s war in Ukraine have spurred the European Union’s efforts to ensure greater autonomy in securing its raw material supply. In response, the EU has introduced the Critical Raw Materials Act (CRMA), which aims to diversify supply sources and foster strategic partnerships with resource-rich nations.
Saudi Arabia is seen as a potential partner for the EU in this initiative, although the necessary conditions for a formal strategic partnership are not yet in place. The U.S., meanwhile, has embraced a “friendshoring” strategy, aligning its mineral supply chain efforts with politically friendly nations through initiatives such as the Minerals Security Partnership (MSP). While the EU is a member of the MSP, its more cautious diplomatic approach reflects the need to balance sustainability and economic ties with various global regions.
Saudi Arabia’s growing influence in mineral resources
Saudi Arabia is positioning itself as a critical player in the global minerals market, seeking to expand its foreign economic relations and secure mutually beneficial raw material agreements. By presenting itself as a geopolitically neutral partner, the Kingdom is diversifying its relationships, maintaining strong ties with the U.S., while also deepening engagement with China. This dual alignment, combined with its expanding role in the mineral sector, makes Saudi Arabia an appealing partner for the EU, despite the absence of institutionalized cooperation on mineral resources at present.
Looking ahead
Saudi Arabia’s approach to mineral resource development reflects its ambition to balance its energy dominance with a growing role in the global transition to a sustainable economy. By leveraging financial resources, forming strategic global partnerships, and focusing on critical minerals, the Kingdom aims to secure its future leadership in the minerals and energy sectors.
However, challenges remain, particularly in navigating global geopolitical tensions and balancing economic development with environmental responsibility. If successful, Saudi Arabia has the potential to transform its economic landscape and global identity, positioning itself not just as an oil giant, but as a multifaceted leader in the energy and minerals industries.
