The Gulf States' race for strategic minerals to ensure their energy transition
Saudi Arabia and the United Arab Emirates, like other nations in the region, are seeking to position themselves as leaders in the extraction and processing of strategic minerals needed for green technologies. These resources, such as copper, lithium, cobalt and nickel, have become essential for the manufacture of batteries, solar panels and wind turbines, which have become key elements in the energy transition. With this in mind, these countries are steadily strengthening their international partnerships to secure supplies of rare minerals and ensure their strategic sovereignty.
The Middle East turns to Africa
In the diplomatic sphere, a tough battle is being waged to secure mineral supplies. In December 2023, the United Arab Emirates, via International Resources Holding, acquired a majority stake in the Mopani copper mine in Zambia for $1.1 billion. Saudi Arabia, meanwhile, created the $15 billion Manara Fund and acquired a 10% stake in the subsidiary of Vale, a Brazilian mining giant specializing in strategic minerals. In addition, the country has signed mining cooperation agreements with several countries, including the Democratic Republic of Congo, Egypt, Russia and Morocco. Finally, Saudi delegations also explored opportunities in lithium-rich Argentina and Chile.
These massive investments in strategic minerals are aimed at supporting local production of electric vehicles, such as the Lucid plant in Saudi Arabia, and supplying critical components to the aerospace and defense industries.
The stakes are clear: ensuring sovereignty to enable an energy transition.
Strategic success and nuclear ambition
"I am pleased to announce that our estimate of the kingdom's untapped mineral potential has risen from $1,300 billion to $2,500 billion, an increase of 90%."
These were the words of Bandar Alkhorayef, Saudi Minister of Industry and Mineral Resources, at a conference in Riyadh. The kingdom's 2030 strategic vision, spearheaded by Crown Prince MBS, is showing its first signs of success.
In addition, in 2023, the discovery of significant reserves of uranium, which can be mined locally. These resources could enable the country to independently produce the fuel needed for its future nuclear power plants. Recent explorations have identified a variety of uranium deposits in different regions of the Kingdom, including Jabal Saeed, Madinah and Jabal Qariah in the north.
Significant quantities of titanium have also been discovered. In addition to solar and wind power, the Kingdom is counting on nuclear power to meet its growing demand for electricity, which rose by 20% between 2012 and 2020.
Nuclear power will therefore play a key role in energy-intensive projects such as water desalination, currently dependent on the combustion of hydrocarbons.
With the announcement in 2018 of the construction of 16 nuclear reactors over 20 years, at a cost of $80 billion, Saudi Arabia has reaffirmed its commitment to nuclear power. Recently, Prince Abdulaziz bin Salman confirmed the development of two large reactors, which will exploit local uranium resources, marking a significant step forward in the country's energy transition.
A major economic and social impact
Climate transition and industrialization have created thousands of jobs in Gulf countries, reducing unemployment rates and improving living standards for local populations. In Saudi Arabia, for example, the mining sector could generate around 250,000 direct and indirect jobs by 2030. By investing in local training and infrastructure, the Gulf states aim not only to foster skills development and education, but also to prepare a new generation of skilled workers to support a sovereign industry.
The economic benefits are not limited to job creation. It is estimated that the mining projects underway in Saudi Arabia could add up to $64 billion to the country's economy each year. What's more, investment in the information technology and logistics infrastructure needed to support these mining operations is stimulating other economic sectors, creating a positive trickle-down effect across the economy as a whole. On a societal level, these developments provide education and vocational training opportunities for young people, helping to reduce inequalities and improve social mobility.
Gulf countries are setting up scholarship programs and partnerships with international academic institutions to train engineers and technicians specialized in the mining industry. Also in Saudi Arabia, initiatives such as the Mining Skills Development Program aim to train over 10,000 professionals by 2025.
Even if the positive consequences are numerous, and the objective of an energy transition both laudable and imperative, there are still many critics of mineral extraction, as the techniques employed remain polluting.
That's why Gulf countries are stepping up initiatives to promote sustainable, environmentally-friendly mining. Gulf governments are investing in green technologies to minimize the environmental impact of mineral extraction, in line with the energy transition objectives dictated by the COPs. Saudi Arabia, for example, has allocated over $2 billion for research and development projects in clean technologies and sustainable mining.
Thus, the Gulf countries' quest for strategic minerals is a proactive response to the challenges of climate transition and an opportunity to redefine their economies. Moreover, this dynamic is part of a long tradition of cultural and economic ties between the East and Africa, where trade and cultural interaction have shaped prosperous, interconnected civilizations.
Historically, the trade routes that crossed the Gulf and East Africa were essential vectors of prosperity and development. Today, these historic links are being rekindled by the Gulf countries' ambitions to industrialize and preserve their economic sovereignty. The common challenges shared by the East and Africa, particularly in terms of sustainable development and energy transition, place them at a common intersection, paving the way for enhanced cooperation and a prosperous shared future.
Sources :
https://alj.com/fr/news/leading-saudi-arabias-renewable-energy-revolution/
