The Kingdom of Saudi Arabia is betting on lithium from overseas suppliers to aid its electric vehicle goals, Reuters reported, citing an exclusive interview with a senior minister.
Local Battery production plans
According to the report, Saudi Arabia aims to source lithium from other countries to support its domestic electric vehicle battery production plans.
Minister of Industry and Mineral Resources Bandar Alkhorayef said in an interview with the international news outlet that the government’s efforts to obtain domestic supplies are currently at an “early stage.”
“Lithium is a very important mineral that happens to be part of a very important part of the supply chain, especially for batteries. I wouldn’t imagine that we would live without it.”
Minister of Industry and Mineral Resources Bandar Alkhorayef
Major Lithium efforts
Saudi Arabia has long depended on the oil industry to boost its economy.
In a major shift, it has already spent billions to make the country an electric vehicle production hub. It is apparently part of the efforts of Crown Prince Mohammed Bin Salman to diversify the economy.
Therefore, the Kingdom has partnered with petroleum giant Aramco to explore lithium extraction from seawater and salinated discharges from existing oil fields. However, it has yet to determine if the project will succeed.
“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.”
Minister of Industry and Mineral Resources Bandar Alkhorayef said in an interview during the World Economic Forum
In hindsight, the sovereign wealth fund Public Investment Fund (PIF) and its flagship mining firm, Ma’aden, established a new joint venture in 2023. The Manara Minerals JV primarily aims to invest in mining assets overseas to aid the country’s demand for lithium.
“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.”
Minister of Industry and Mineral Resources Bandar Alkhorayef
In addition, the Kingdom’s embassy in Santiago recently expressed interest in negotiating potential investments in the Chilean mining industry, particularly about lithium.
2030 EV Production Target
Saudi Arabia announced its target to hit an annual production output of 500,000 electric vehicles by the end of the decade, EV-a2z reported last year, citing Investment Minister Khaled Al Faleh.
According to Learning English, the PIF also set a target of producing 150,000 EVs in 2026.
Saudi’s increased focus on lithium is crucial for the country to hit these targets. As of today, China dominates the electric vehicle supply chain.
In contrast, Saudi Arabia struggles with a lack of critical auto parts supply. There is apparently no major domestic industry that produces such products, from car doors to engines.
The PIF and Taiwanese company Foxconn established an electric vehicle brand called “Ceer.” It plans to launch an electric car by 2025. However, the company has not yet developed its local electric vehicle factory.
Eye of Riyadh reported last month Ceer CEO Mohammed Abuazzah’s estimate that the company may finish the electric vehicle factory development in the next two years. Therefore, it would be unlikely for the company to launch an electric car before 2026.
