US and Saudi Arabia Eye Critical Minerals Deals Amid China Strategy Rethink

Saudi Arabia and the United States are actively pursuing critical minerals deals, signaling a strategic shift in global supply chains. This collaboration aims to reduce reliance on current dominant players, particularly China, and bolster the security of essential resources vital for various industries, including technology and renewable energy. The discussions highlight Saudi Arabia's growing ambition to diversify its economy beyond oil through its Vision 2030 program.

US and Saudi Arabia Forge Critical Minerals Alliance

In a significant move to reshape the global critical minerals landscape, Saudi Arabia and the United States are engaging in high-level discussions regarding cooperation in mining and mineral resources. This initiative comes as the U.S. re-evaluates its strategy concerning critical mineral supply chains, seeking to reduce dependency on China, which currently holds a dominant position in the processing and supply of many key minerals.

Saudi Arabia's Vision 2030 and Mineral Wealth

Saudi Arabia is rapidly expanding its mining sector as a cornerstone of its Vision 2030 economic diversification program. The kingdom aims to transition its economy away from oil, leveraging its substantial mineral resources. Recent estimates have nearly doubled the kingdom's mineral reserves to an impressive $2.5 trillion, largely due to the discovery of extensive rare earth deposits.

Key aspects of Saudi Arabia's mining ambitions include:

• Diversification: Shifting economic focus from oil to a broader range of industries.
• Resource Expansion: Significant discoveries of domestic resources, including rare earths.
• Increased Valuation: Mineral reserves now estimated at $2.5 trillion.

Strategic Partnerships and Global Reach

Saudi Arabia's flagship mining company, Ma'aden, is actively exploring partnerships with international firms for rare earths processing. Companies under consideration include:

• MP Materials (U.S.)
• Shenghe Resources (China)
• Lynas Rare Earths (Australia)
• Neo Performance Materials (Canada)

Furthermore, Saudi Arabia has expanded its international mining presence through Manara Minerals, a joint venture between its sovereign wealth fund and Ma'aden. Manara Minerals has already made a significant investment, acquiring a 10% stake in Vale's $26 billion copper and nickel spin-off, Vale Base Metals, in 2023.

Key Takeaways

• The U.S. and Saudi Arabia are actively pursuing agreements on critical minerals to secure supply chains.
• Saudi Arabia's Vision 2030 heavily relies on the expansion of its mining sector.
• The kingdom has significantly increased its estimated mineral reserves, including rare earths.
• Ma'aden is seeking international partners for rare earth processing, including a U.S. firm.
• Saudi Arabia is expanding its global mining footprint through ventures like Manara Minerals.

Sources

• Saudi Arabia eyes key role in critical minerals as U.S. rethinks China strategy, KITCO.
• Saudi Arabia, US to discuss deal in mining, mineral resources, cabinet says, KITCO.