|

Saudi Arabia Invests $100 billion in Mining

The focus will be on mining earth metals including lithium, zinc, copper and nickel, all crucial metals for battery-making.

Photo of mining
Photo by Dominik Vanyi via Unsplash

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

Even after Saudi Arabia runs out of oil, it’ll be powering your car.

The kingdom’s vice minister of mining affairs, Khalid al-Mudaifer, announced on Wednesday that the country is kicking off a new mineral investment project worth $100 billion. The focus will be on mining earth metals including lithium, zinc, copper, nickel, and gold, all crucial elements for battery-making, and therefore for the electric vehicle market.

From Black Gold to Real Gold

Saudi Arabia’s economy and its enormously influential sovereign wealth fund run on oil. But the Gulf nation is in the middle of re-tooling its economic future, and part of that involves making more domestic investments rather than hunting for buzzy Silicon Valley companies to back, which has been its modus operandi in the past. 

Saudi Arabia is hunting for industries that can keep the money coming in once oil prices stop climbing, which according to the International Energy Agency could be very soon

  • The IEA put out an oil demand forecast on Wednesday, and while it said potential sanctions on Russia and Iran could tighten the oil market in the short term, it also slightly lowered its demand forecast for 2025. 
  • The Organization of the Petroleum Exporting Countries released its own rather less climactic forecast on Wednesday, predicting demand will continue to rise through next year, but that wouldn’t be the first time OPEC and the IEA have given very different predictions about where oil is headed.

Whether peak oil is just around the corner or way over the horizon, Saudi Arabia is preparing for a post-oil economy while it’s got plenty of cash to splash. Part of Wednesday’s mining announcement features a partnership between Aramco, the state oil company, and its state mining company to hunt for metals important to the energy transition.

Metal Sans Mines: On Wednesday, GM announced a partnership with Norwegian company Vianode, a synthetic graphite manufacturer. The supply deal will run from 2027, when Vianode plans to get a factory up and running in North America, until 2033 and cost unspecified “multi-billions.” Vianode’s USP is that it can provide a source of graphite outside of China, the world’s top producer and exporter of the metal. “What General Motors wants and we want is a resilient supply chain for North America,” Vianode CEO Burkhard Straube told Reuters.