Aramco, the world’s largest oil company, plans to form a Saudi mining joint venture with Ma’aden to extend its capabilities, Kallanish reports.

The energy and chemicals giant said on Wednesday it has identified “promising” lithium concentrations exceeding 400 parts per million in its existing area of operations. Commercial lithium production could potentially start by 2027.

A non-binding head of terms was signed by Aramco and the Saudi multi-commodity mining and metals company during the Future Minerals Forum in Riyadh. Further details of the terms, however, have not been disclosed.

“This proposed JV would enable us to accelerate exploration of the Arabian Platform, combining Aramco’s vast knowledge of the area with Ma’aden’s extensive mining and exploration expertise,” comments Darryl Clark, Ma’aden senior vice president of exploration.

The miner is undertaking one of the world’s largest single-jurisdiction exploration programs across the Arabian Shield, to unearth the estimated $2.5 trillion mineral endowment.

Aramco says the new focus on energy transition minerals would extend its capabilities into an adjacent sector, leveraging technological innovation and skills in resource and data management. The JV initially aims to extract lithium from high-concentration deposits and advance cost-effective direct lithium extraction (DLE) technologies.

“This announcement reflects Aramco’s focus on positively contributing to the global energy transition…  to the growth of more sustainable energy solutions while diversifying our portfolio for a lower-carbon future,” notes Nasir K. Al-Naimi, Aramco Upstream president. “We expect that this partnership will leverage the world’s leading upstream enterprise to apply significant low-cost advantages, industry experience, technological innovation, accumulated subsurface knowledge and an integrated supply chain ecosystem.”

The companies say the JV’s planned lithium output could potentially help meet the kingdom’s lithium demand, which they estimate will grow 20-fold between 2024 and 2030. Global demand for the battery material has tripled over the past five years and its compound annual growth rate is anticipated to exceed 15% through 2035, they add.

The joint venture is subject to customary closing conditions including regulatory approvals.