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16/04/2024
Mining News

Middle Eastern oil titans pivot towards critical minerals

While oil has long fueled the economies of Middle Eastern countries, there’s a notable shift towards investing in critical minerals like lithium, cobalt, and rare earths. Recognizing the pivotal role these resources play in clean energy and electric vehicle technologies, oil-rich nations such as Saudi Arabia and the United Arab Emirates (UAE) are diversifying their economic portfolios and positioning themselves in this burgeoning industry.

Ahmed Mehdi, managing director at Renaissance Energy, notes that this move isn’t about replacing oil but rather ensuring a presence in the energy transition, given the geopolitical significance of critical minerals. Rising tensions and China’s dominance in mineral processing have sparked concerns about strategic vulnerabilities, prompting Middle Eastern countries to secure alternative supply chains and participate in the clean energy transition.

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Gracelin Baskaran, a senior fellow at the Center for Strategic and International Studies, emphasizes Saudi Arabia and the UAE’s emergence as major players in the critical minerals sector. With ambitions outlined in Saudi Arabia’s Vision 2030, the country aims to become an economic powerhouse by leveraging its $2.5 trillion in untapped mineral reserves. Riyadh has initiated partnerships with various countries, including the Democratic Republic of the Congo, Egypt, Russia, the United States, and Morocco, to bolster its mining sector.

Similarly, the UAE is actively pursuing opportunities in critical minerals, evident in its partnerships with the Democratic Republic of the Congo and Zambia. Discussions for a free trade agreement with Australia further highlight Abu Dhabi’s interest in investing in critical minerals.

Both countries have substantial financial resources to support their ambitions, enabling them to capitalize on opportunities in the critical minerals market while Western companies remain cautious due to low commodity prices.

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