Saudi Arabia plans to attract investment worth $32bn to its mining and minerals sector

Kingdom plans to finance nine mining projects as it seeks to tap into demand for minerals during energy transition

A miner works in the Al Amar gold mine south-west of Riyadh. Reuters

Saudi Arabia, the Arab world’s biggest economy, aims to attract investments worth $32 billion to its mining and minerals sector through nine new projects.

The kingdom “targets to finance nine mining projects for midstream minerals and metals”, Saudi Press Agency quoted Bandar Al Khorayef, Minister of Industry and Mineral Resources, as saying on Friday.

The coming projects aim to supply mineral products to local as well as international markets, SPA said.

Expansion of Saudi Arabia’s industrial and mining sectors is an important part of its Vision 2030 strategy that aims to reduce its reliance on oil revenue by diversifying its economy.

The Arab country currently accounts for about 37.9 per cent of the Middle East and Africa’s $16bn metals and mining market, official data show. Its mining industry has grown 27 per cent annually to reach more than $194 million — achieving its highest revenue last year.

In 2020, the kingdom approved a mining law to boost foreign direct investment in the sector. The law, which came into effect in January 2021, will help the country explore mineral resources worth about $1.3 trillion, Invest Saudi- reported.

Saudi Arabia is looking to attract $170bn to its mining sector by 2030, Mr Al Khorayef told Bloomberg TV earlier this year. The Gulf country is aiming to tap into growing demand for metals that are used to produce batteries — an integral component in electric cars.

Lithium, nickel, cobalt and manganese are integral components for batteries while rare earths are important for wind turbines and electric vehicle motors. An electric car requires six times the mineral input of a conventional car while an offshore wind plant requires 13 times more mineral resources than a gas-fired power plant, S&P reported.

The Saudi Ministry of Industry and Mineral Resources has reportedly secured a $6bn project to build a steel plate mill complex and an electric vehicle battery metals plant as part of its plans to attract the $32bn in investment, a Reuters report showed.

Last month, Lucid Motors, the electric vehicle maker backed by Saudi Arabia's Public Investment Fund, signed an agreement with the kingdom's government for the sale of 100,000 cars that will support Riyadh's sustainability drive.

The kingdom is ramping up its mining activity in anticipation of a surge in demand for minerals required for the energy transition.

This year, Saudi Arabia announced the next steps related to the awarding of licences for the Khnaiguiyah project, the kingdom’s largest mining exploration site.