Saudi Arabia’s strategic push to become a major player in the global mineral resources sector is part of its broader economic transformation under Vision 2030, a plan to diversify its economy away from oil dependency. Central to this shift is the development of the mining sector, aimed at both tapping into the Kingdom’s mineral reserves and adding significant value through local processing, industrial development, and technological innovation.
Strategic aims and Vision 2030
Saudi Arabia is working aggressively to modernize its economy, with an emphasis on industries like mining, renewable energy, electric vehicles (EVs) and steel production. The Kingdom aims to boost local value-added manufacturing, particularly for metals critical to the green energy transition, such as copper, lithium, nickel and iron. By focusing on minerals essential for battery production and renewable energy infrastructure, Saudi Arabia hopes to position itself as a key player in the global transition to cleaner energy.
While mineral extraction in Saudi Arabia is currently a minor part of its economy (less than 1% of GDP), the Kingdom plans to significantly increase investments in mining over the next decade. The government has set a target of investing $46 billion in the sector by 2030. This effort is primarily being supported by the Public Investment Fund (PIF), which plays a central role in financing not only domestic mining projects but also international investments in mining operations.
International partnerships and geopolitical strategy
Saudi Arabia is leveraging its economic clout, particularly through the PIF, to secure international mineral resources through partnerships and investments in countries like Brazil, Zambia, Chile and Pakistan. This strategy is designed to ensure a steady supply of raw materials for its burgeoning industries, including battery production and EV manufacturing.
The Kingdom’s geopolitical approach is one of balancing relationships between major powers. While it has longstanding ties with the United States, especially in energy and defense, Saudi Arabia is also keen to deepen its relationship with China, the world’s largest consumer of raw materials. This cautious yet strategic engagement with both East and West reflects Saudi Arabia’s desire to maintain its stance as a neutral economic link between competing global powers. This neutrality is especially important in the context of the growing US-China rivalry, where resource security is becoming an increasingly contentious issue.
On the other hand, the European Union has begun to show interest in Saudi Arabia as a partner in mineral supply chains, largely due to the EU’s desire to reduce its dependence on China for critical raw materials. However, for a closer partnership to materialize, key conditions such as transparent governance and compliance with environmental and human rights standards would need to be met.
PIF’s dominance and risks
The Public Investment Fund (PIF) is the primary engine behind Saudi Arabia’s mining and industrial development strategy. The fund controls significant portions of major projects, including Ma’aden, the state-owned mining company, and holds stakes in several international mining projects. The PIF is also behind large-scale investments in downstream industries such as EV production (e.g., Ceer Motors with Foxconn and Lucid Motors). Its deep pockets, bolstered by an expected $1 trillion in assets by 2030, allow it to take on risky ventures and subsidize projects that might otherwise struggle due to high capital demands.
However, the PIF’s dominance raises several concerns. Critics point to the lack of transparency in investment decisions, which are often influenced by political considerations and the consolidation of power by Crown Prince Mohammed bin Salman. The PIF’s close ties to the royal family have led to concerns about cronyism, corruption, and the long-term sustainability of projects, particularly in high-risk sectors
