Saudi Arabia Advances Lithium Plans, Looks Beyond Oil For Commodity Diversification

Saudi Arabia has unveiled a joint venture between the state oil company Aramco and the state mining company Ma'aden. The collaboration focuses on extracting lithium, a vital component in batteries for electric vehicles (EVs), renewable energy storage, and electronics. Commercial production is expected by 2027.

"We expect that this partnership will leverage the world's leading upstream enterprise to apply significant low-cost advantages, industry experience, technological innovation, and an integrated supply chain ecosystem," said Nasir K. Al-Naimi, Aramco's upstream president.

The venture aligns with Saudi Arabia's Vision 2030, an ambitious economic transformation plan designed to reduce dependency on oil by developing sectors like mining, technology, and renewable energy.

Vision 2030 targets unlocking $2.5 trillion of mineral resources, including lithium, copper, and gold, while increasing mining's GDP contribution from $17 billion to $64 billion.

Demand for lithium has surged due to the global shift toward green energy. According to Aramco, domestic lithium needs could increase twenty-fold by 2030, supporting the production of 500,000 EV batteries and 110 gigawatts of renewable energy capacity.

The new joint venture aims to explore direct lithium extraction (DLE) technologies and tap into high-concentration deposits within the region. In contrast to traditional evaporation methods, DLE bypasses the need for lithium ponds, allowing faster extraction rates, minimized environmental impact, and reduced water consumption, which are crucial factors in arid climates.

The project also builds on Saudi Arabia's first successful lithium extraction from oilfield brine last December, which was conducted in collaboration with a local startup, Lihytec. Ma'aden is making strides in other commodities, unveiling promising gold and copper deposits at Wadi Al Jaww and Jabal Shayban.

Ma'aden CEO Bob Wilt noted that these findings are part of one of the world's largest single-jurisdiction exploration programs. "We are committed to establishing mining as the third pillar of the Saudi economy, in line with Vision 2030," he stated.

Strengthening domestic copper production is a priority since the country imports most of its copper—365,000 tons annually. While this demand could double by 2035, the country might secure some of this increasingly important metal from Pakistan as it evaluates a stake in Barrick Gold's Reko Diq project.

Price Watch: Global X Lithium & Battery Tech ETF (NYSE:LIT) is up 0.79% year-to-date.

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