The kingdom of Saudi Arabia is planning to transform into a global mineral processing hub, Khalid Saleh Al-Mudaifer, Saudi Arabia’s vice-minister for mining affairs, told a mining conference in London.

“We are moving beyond just mining; leveraging our location, world-class infrastructure, and investment appetite, we are building an entire ecosystem to transform the kingdom into a global, regional mineral processing hub,” the minister says at the Resourcing Tomorrow conference attended by Kallanish.

Al-Mudaifer stresses the need for minerals to further the transition to clean energy: “The world has realised that the energy transition is at risk without a steady supply of minerals and metals, especially those required for the electrification and renewable energy in the required quantity and affordable prices.” 

However, the mining industry is fraught with challenges. For one, the sector faces “persistent underperformance and exploration” and miners are “underinvesting” in exploration, he notes.

“Second, the mining industry is struggling with unprecedented volatility in commodity markets,” he adds. “Demand forecasting has become increasingly difficult due to the uncertainties around the [debates] of the energy transition. Supply chains are also facing significant disruptions from extreme weather events to geopolitical [complexities] and regulatory changes.”

In addition, to meet the increasing demand for minerals, driven by the energy transition, investments to the tune of $6 trillion are required by 2035. However, this is 4 times the market capitalisation of the top 20 mining companies. “To bridge this gap, the industry needs to attract significant new capital, potentially opening doors for new players, including sovereign funds and oil and gas companies,” the minister explains.

Stakeholder management is also becoming more important, with companies facing increasing pressure from various stakeholders. The industry also faces a “major” talent gap, Al-Mudaifer adds.

“Rising demand for minerals, combined with increasing complex global supply chain and geopolitical issues, have increased the importance of supply chain resilience,” the minister notes, adding that 14 of the G20 countries have already announced critical mineral strategies.

Despite the challenges, the increasing mineral requirements, coupled with advancements in technologies like AI and quantum computing, present opportunities to revolutionise mining and mineral processes.

“The energy transition presents a unique opportunity for the sector to reduce its carbon footprint and contribute to the greener future,” he concludes. By embracing sustainable practices such as energy-efficient technologies, renewable energy sources, and responsible waste management, miners can significantly lower their greenhouse emissions and reduce their environmental footprint.”

Last week, Riyadh inked nine mineral-related MOUs worth SAR 35 billion ($9.31 billion), which includes a $2 billion investment in copper processing by Vedanta Copper International.