Saudi Arabia has emphasised the need for a more “resilient” supply chain for minerals and metals after the Covid-19 pandemic caused significant disruption in the industry.
“The pandemic and the geopolitical tensions have shown their weaknesses and we have seen a rise in resource nationalism,” Khalid Al Mudaifer, Vice Minister for Mining Affairs at the Saudi Ministry of Industry and Mineral Resources, said during the Mines and Money London conference.
“As a consequence, we see cost spikes for some minerals up to 350 per cent.”
Demand for minerals such as graphite, lithium and cobalt could increase five-fold by 2050 to meet the growing demand for clean energy technology, the World Bank has said.
More than three billion tonnes of minerals and metals will be needed to realise the Paris Agreement's goals of achieving net-zero emissions by 2050, the global financial institution has said.
Saudi Arabia, the Arab world’s largest economy, aims to attract $170 billion in investments to its mining sector by 2030.
The kingdom is aiming to tap into growing demand for metals used to produce batteries — an integral component in electric cars.
Expanding the kingdom’s industrial and mining sectors is an important part of its Vision 2030 strategy, aimed at reducing reliance on oil and diversifying the economy.
Saudi Arabia currently accounts for nearly 38 per cent of the Middle East and North Africa’s $16 billion metals and mining market, official data shows.
“The net-zero transition cannot happen without minerals and metals,” Mr Al Mudaifer said.
“We need to scale up discoveries and we need to scale up production."
He also spoke about the progress made by Saudi Arabia in the green hydrogen sector.
In 2020, US-based Air Products signed a $5 billion agreement with Riyadh-based utility Acwa Power and Neom to build the world’s largest green hydrogen-based ammonia production facility in the kingdom's planned futuristic city.
The project, which will be owned jointly by the three parties, is expected to produce up to 250,000 tonnes of ammonia by 2026.
The global hydrogen industry is expected to be worth $183 billion by 2023, up from $129 billion in 2017, according to Fitch Solutions.
French investment bank Natixis estimates that investment in hydrogen will exceed $300 billion by 2030.
Hydrogen has the potential to cover 12 per cent of global energy demand and cut 10 per cent of carbon dioxide emissions by 2050, the International Renewable Energy Agency has said.
“We are well placed to further scale-up mining, and build integrated value chains. We have a stable government, and we have stable fiscal policies,” Mr Al Mudaifer said.