According to Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Alkhorayef, the Kingdom is committed to sourcing lithium from abroad as it looks to invest in the electric vehicle industry and produce EV batteries. The minister also noted that efforts to secure domestic supplies were still in the early stages.
To diversify its economy, Saudi Arabia, whose economy has for decades been centred around oil, has invested billions in trying to establish itself as a centre (at least in the Gulf region) for the production of electric vehicles.
“Lithium is a very important mineral that happens to be part of a very important part of the supply chain, especially for batteries,” Minister of Industry and Mineral Resources Bandar Alkhorayef told Reuters in an interview, as reported by Zawya.
“I wouldn’t imagine that we would live without it,” he said on the sidelines of the World Economic Forum’s special meeting in Riyadh.
In collaboration with Aramco, Saudi Arabia has started investigating the possibility of extracting lithium from seawater and salinated discharges from the Kingdom’s oil fields, but it was unsure if these efforts would be fruitful at the time.
“There are some signs which are encouraging, but we need to do more. For something to be economically feasible, there are two things we need to look at: the size of deposits and concentration. We do not have enough evidence to say that we have the right size of deposits and concentration,” Alkhorayef said.
To invest in mining assets overseas, Saudi Arabia’s Public Investment Fund (PIF), a sovereign wealth fund, and its leading mining company Ma’aden established a joint venture last year called Manara Minerals.
“I’m quite confident that Saudi Arabia’s natural resource needs will be satisfied one way or another. Either through the products that we have in the country or through imports, be it Manara investing or other partners,” Alkhorayef said, in response to a question on international lithium investments.
Meanwhile, talking about Saudi Arabia’s efforts to support its nascent EV industry, reports in March 2024 suggested the Kingdom’s national oil company planning to extract lithium from its oilfields.
While Saudi’s neighbour UAE has undertaken a similar plan, other oil companies, including Exxon Mobil and Occidental Petroleum are also mulling taking advantage of emerging technologies to filter lithium from brine (water with a high-concentration solution of salt), as the world seeks to move away from fossil fuels.
As per Reuters, Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) were in the very early stages of work to extract lithium.
“DLE technology is in its infancy and its economics are far less certain than those of oil. However, Saudi Arabia and the UAE can draw on expertise in handling oil brine and wastewater at oil production sites. An advantage of filtering the ultralight battery metal from salt water is that it avoids the need for costly and environmentally challenging open pit mines or large evaporation ponds, as employed in the world’s leading producers Australia and Chile,” the report commented further.
Talking about Lithium, its prices have fallen by about 80% since touching a peak in November 2022, amid a slowdown in electric vehicle sales, due to the higher interest rates and the resultant demand slump.
“Leading carmakers, however, are among those looking for new lithium supplies in anticipation of future demand. Analysts have said the EV industry will depend on lithium for years to come, even though cheaper battery technology alternatives using less or no lithium are being studied,” Reuters stated further, while adding that Aramco was working on using new filtration technology that seeks to solve the issue of concentration, while another source stated about Adnoc mulling a similar approach.
The Kingdom has already established its own EV brand Ceer, and built an EV metals plant. Its sovereign wealth fund, the Public Investment Fund (PIF), has a goal to produce 500,000 EVs annually by 2030. The Gulf nation-based Saudi Arabian Mining Company (Ma’aden) is already working to extract lithium from seawater.