Saudi Arabia has signed nine investment deals in metals and mining worth more than 35 billion riyals ($9.32 billion) as the kingdom builds domestic supply chains for critical metals.
The Global Supply Chain Resilience Initiative, a Saudi government programme under the National Investment Strategy, unveiled the deals with Indian mining conglomerate Vedanta and China's Zijin Group, during the World Investment Conference in Riyadh on Tuesday.
“We are announcing today nine deals that will help increase access to critical materials, advance domestic manufacturing here in the kingdom, and reinforce sustainability and overall Saudi participation in global supply chains,” Khalid Al Falih, Minister of Investment of Saudi Arabia, said during a keynote speech.
India's Vedanta signed an initial agreement with Saudi Arabia's Ministry of Investment and Ministry of Industry and Mineral Resources to invest $2 billion in copper projects within the kingdom.
The projects include a 400,000 tonne per annum greenfield copper smelter and refinery, along with a 300,000 tonne per annum copper rod project, Vedanta said in a statement.
Vedanta's projects will be established in Ras Al Khair Industrial City, a major centre for mining and mineral processing industries in the kingdom.
“Our projects will enhance the kingdom’s self-reliance in the copper supply chain,” said Chris Griffith, chief executive of Vedanta Base Metals.
“Saudi Arabia has been a leader in oil exploration and hydrocarbons for decades. Now … it is poised to tap into its vast, unexplored mineral potential,” he added.
The kingdom has more than 5,300 mining sites, valued at about $1.3 trillion, containing minerals including gold, silver, copper, zinc, phosphate, bauxite and limestone, according to a 2022 study by the Ministry of Industry and Mineral Resources.
Vedanta said the kingdom's copper demand is around 365,000 tonnes per annum and will “more than double” by 2035.
Meanwhile, China’s Zijin will invest between 5 billion riyals and 6 billion riyals ($1.33 billion to $1.6 billion), with a first phase focused on building a zinc smelter with capacity for 100,000 tonnes per annum of zinc ingots and 200,000 tonnes per annum of sulphuric acid, Reuters reported, citing a conference presentation.
Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are crucial for many modern clean energy technologies, including wind turbines, power grids and electric vehicles.
Riyadh has been investing billions of dollars to transform itself into an electric vehicle centre as it seeks to catch up with the world's top electric car makers, the US and China, while weaning itself away from oil exports.
Mr Al Falih said the latest agreements are part of a “pipeline of deals” developed under the Jasri initiative, which aims to boost the kingdom’s value chains.
Many countries are developing their own supply chains to reduce the risks associated with global disruptions, a trend that accelerated after the Covid-19 pandemic.
Ideas such as “near-shoring” and “friend-shoring” have gained popularity, and since Saudi Arabia enjoys good relations with many countries and has abundant green energy, “we have termed our shoring initiative [as] green-shoring”, Mr Al Falih said.
Saudi Arabia’s National Renewable Energy Programme aims to achieve a 50:50 energy mix from gas and renewables by 2030, replacing liquid fuels in electricity and other sectors across the kingdom.
