Saudi Arabia announced Tuesday that it is preparing to sign a mining cooperation agreement with the United States, a move that reflects the Kingdom’s intensified efforts to position itself as a key global player in critical mineral supply chains. According to a statement carried by Saudi state media, the Saudi cabinet, chaired by Crown Prince Mohammed bin Salman, has approved a plan for its Minister of Industry and Mineral Resources—or a designated deputy—to engage directly with U.S. officials on a draft memorandum of cooperation. The agreement is expected to be finalized with the U.S. Department of Energy. While full details of the draft have not been publicly disclosed, the focus will center on joint collaboration in mining and mineral resource development.
The announcement comes as Saudi Arabia continues to pursue economic diversification strategies under Vision 2030. Central to this strategy is a shift away from oil revenues toward building up industrial sectors, including electric vehicles and battery production. The Kingdom aims to become a regional and global hub for battery manufacturing and mineral processing, which are vital for clean energy technologies. Bandar bin Ibrahim Alkhorayef, Saudi Arabia’s Minister of Industry and Mineral Resources, has stated publicly that the country plans to import raw materials while also leveraging its own mineral resources to manufacture battery components. That approach aligns with recent moves to secure stable supplies of key materials, including lithium and copper.
Earlier this year, Saudi officials entered preliminary discussions with Chile’s state-owned copper miner, Codelco, over potential joint investments. These talks indicate Saudi Arabia’s growing interest in forging upstream and midstream partnerships in Latin America’s mineral sector, particularly in copper and lithium. Both materials are essential to global battery production and energy storage technologies.
The Saudi strategy is not limited to bilateral agreements. Through Manara Minerals Investment Co., a joint venture between the Public Investment Fund (PIF) and Saudi Arabian Mining Company (Ma’aden), the country has made targeted acquisitions abroad. One of the most significant so far was the 2023 purchase of a 10% stake in Vale Base Metals, a $26 billion spinoff from Brazil’s Vale focused on copper and nickel. That investment gave Saudi Arabia a foothold in critical mineral production outside its borders. Domestically, Saudi Arabia is working to unlock its own mineral potential. It currently imports most of the 365,000 tonnes of copper it consumes each year, but that demand is projected to more than double by 2035. To reduce reliance on imports, the country has ramped up mineral exploration over the past two decades. According to the Ministry of Petroleum and Mineral Resources, surveys have identified major deposits of gold, silver, copper, tin, tungsten, nickel, zinc, phosphates, and bauxite.
The country has also started to explore offshore mineral extraction. The Red Sea seabed is believed to hold commercially viable concentrations of valuable metals. Plans are already in place to process materials extracted from the Red Sea at facilities in Yanbu, one of the Kingdom’s main industrial centers. In addition to known mineral deposits on land and sea, the ministry says it has mapped over 1,270 sources of precious stones and 1,170 sources of other minerals across the country. This has led to a steady increase in the number of exploration licenses and mining concessions issued in recent years. The upcoming agreement with the U.S. fits into this broader picture. Washington has been looking to build resilient and diversified supply chains for critical minerals, especially those required for the energy transition and high-tech manufacturing. For Saudi Arabia, partnering with the U.S. brings technical expertise, potential investment, and greater geopolitical alignment on industrial development.
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.
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