His Excellency Khalid Al-Mudaifer, Vice-Minister for Mining Affairs, Ministry of Industry and Mineral Resources, Kingdom of Saudi Arabia, laid out the case for urgent investment in minerals and metals extraction and value chains in Saudi Arabia.
International delegates and global mining investors attending London’s Mines and Money conference have heard how Saudi Arabia is arguing that the energy transition from hydrocarbons to renewables is opening the path for it to become a global leader in the sustainable and innovative production of minerals and metals, especially since a vast, new and largely untapped minerals super-region is emerging, stretching from Africa to central Asia.
His Excellency Khalid Al-Mudaifer, Vice-Minister for Mining Affairs, Ministry of Industry and Mineral Resources, in a keynote address at the event said that minerals are indispensable to the energy change to renewables:
“Decarbonization – the net-zero transition – cannot happen without minerals and metals: a lot of minerals and metals. We need to scale up discoveries and we need to scale up production. The World Bank says that by 2050 the production of minerals such as graphite, lithium, cobalt and copper needs to increase by nearly 500% to meet the future demand for clean energy technologies. To achieve a ‘below 2°C increase’ future, the Bank estimated that more than 3 billion tons of minerals and metals are required.
As the transition accelerates, mineral and metal supply chains need to become more resilient. The pandemic and the geopolitical tensions have shown their weaknesses. And we have seen a rise in ‘resource nationalism.’ As a consequence, we see cost spikes for some minerals up to 350%.”
To achieve a ‘below 2°C increase’ future, the World Bank estimated that more than 3 billion tons of minerals and metals are required for the necessary wind, solar and geo-thermal power, and energy storage.
The Ministry highlighted the advances which Saudi Arabia has already made in its mining industry. The significant potential for KSA largely lies in precious and base metals—including gold, zinc, copper, and silver in addition to a few specialty metals such as niobium and tantalum. In terms of phosphate fertilizer production alone, the Kingdom has already become the world leader. Estimates for total phosphate reserves vary from approximately 2.3 billion to almost 7.3 billion tons. The total in-situ value of this phosphate resource is estimated between USD 102.4 billion and 321 billion.
The Kingdom stabilized aluminum markets by building an industrial city that focuses on extracting and producing final products for the world. And working with well-known electric vehicle manufacturers such as Lucid Motors and automotive sector suppliers such as EV Metals to build an integrated electric vehicle manufacturing complex.
HE The Vice-Minister further pointed to important projects such as the Kingdom’s work in hydrogen, with KSA creating the largest green hydrogen plant in the world. Eight months ago, it announced a $5 billion project that – from a standing start – is expected to produce up to 250,000 tons, by 2026.
Economies of scale are needed to make new green technologies such as hydrogen cost-competitive compared to conventional technologies, with costs needing to be cut by 50%.
A McKinsey consultants’ report published last week makes the case that an oil-rich country like Saudi Arabia can lead in green hydrogen.
KSA says that it is ripe for investment, not only in its Arabian Shield region but also to help spearhead minerals extraction in the super region:
“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. We have experience. We have low-cost energy. We have excellent infrastructure.”
HE The Vice-Minister ended his speech by highlighting the recent successes of KSA minerals production:
- “We have helped improve global food security by developing an integrated phosphate fertilizer value chain.
- We have stabilized aluminum markets by building an industrial city focused on the extraction and production of finished products for the world.
- And finally, we are working with well-known electric vehicle manufacturers Lucid Motors, and suppliers to the automotive sector such as EV Metals, to build a fully integrated EV ‘cluster’”.
HE the Vice-Minister renewed invitations for delegates to attend the powerhouse second edition of the Future Minerals Forum, championing the future of mining, attracting massive investment, and building solid partnerships in Saudi Arabia and throughout the mining super region that stretches from Africa to Western and Central Asia.
The Forum launches on January 10th, 2023, with an influential Round Table consisting of Government Ministers and their representatives, and is followed by two days of a conference and exhibition attended by 6,000 delegates.