Saudi Arabia stated on Wednesday that the estimated worth of its mineral assets had almost doubled to $2.5 trillion, highlighting a sector it hopes will assist diversify its oil-reliant financial system.
“I’m delighted to announce that our estimate for the dominion’s untapped mineral potential has elevated from $1.3 trillion to $2.5 trillion, a rise of 90 %,” Industry and Mineral Resources Minister Bandar Alkhorayef instructed a convention in Riyadh.
“This relies on new discoveries within the type of uncommon earth parts, and a mixture of the rise in volumes of phosphate, gold, zinc and copper, in addition to the revaluation of those minerals.”
The earlier valuation of $1.3 trillion had been cited by officers together with Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, since a minimum of 2017.
Under Prince Mohammed, the world’s greatest crude oil exporter hopes to diversify away from fossil fuels, and the federal government is eyeing the mining sector as a possible supply of billions of {dollars} in overseas direct funding every year.
Risk intelligence agency Verisk Maplecroft wrote final yr that the deal with mining was “among the many extra possible elements” of Prince Mohammed’s Vision 2030 reform agenda, aided by current mines, crops, and infrastructure together with railways.
Energy Minister Prince Abdulaziz bin Salman instructed the convention that reasonably than being referred to as an oil-producing nation, “what we’re engaged on is that we want to be an energy-producing nation for all sources of power.”
Last yr, the dominion’s deep-pocketed sovereign wealth fund, the Public Investment Fund, and state mining agency Ma’aden established Manara Minerals to grab up international mining belongings.
Manara introduced its first high-profile acquisition, a 10-percent stake in Brazil’s Vale, in July.
But overseas funding in Saudi Arabia “stays far behind formidable targets,” stated Torbjorn Soltvedt of Verisk Maplecroft.
“The mining sector nonetheless represents the most effective bets for reinforcing overseas funding, however Saudi Arabia has but to safe a landmark settlement with a serious international mining firm for any of its energetic mining licenses.”
While the valuation soar introduced on Wednesday may assist, Soltvedt stated the present dynamic “mirrors a broader downside: Saudi Arabia remains to be seen extra as a supply of funding than a vacation spot for FDI.”
US, Africa outreach
This week’s convention in Riyadh drew delegations from “over 77 nations”, organizers stated, together with resource-rich African nations the place Saudi Arabia is anticipated to pursue mining acquisitions.
Washington despatched a big contingent together with Geoffrey R. Pyatt, assistant secretary of state for power assets, who instructed reporters his authorities was centered on “how we de-risk our dependence on China, particularly for therefore most of the key inputs which are going to be a pacing issue within the success or failure of our power transition.”
Soltvedt stated mining may grow to be “one other pillar” of ties between Washington and Riyadh, who’ve navigated a tough oil-for-security partnership for many years.
“A proper association the place Saudi Arabia acquires African mining belongings and US firms safe rights to purchase a number of the manufacturing has but to emerge,” Soltvedt stated.
“But discussions will proceed, particularly as Saudi Arabia turns into extra energetic within the African mining sector this yr.”