A Bold Shift in the Desert: Saudi Arabia’s $100bn Mining Venture and the Future of Battery Metals

Saudi Arabia is accelerating its economic transformation. In its latest move to reduce reliance on the oil that has long been the backbone of its economy, the Kingdom recently announced a massive mineral exploration project valued at $100 billion. This new venture, revealed by Khalid al-Mudaifer, the Saudi vice minister for mining affairs, seeks to tap into a treasure trove of metals that are critical to the global battery supply chain. Among these metals are lithium, zinc, copper, nickel, and gold—essential ingredients in the world’s shift to electric vehicles (EVs) and renewable power.

This mining announcement underscores Saudi Arabia’s determination to position itself as a key player in the energy transition. By broadening its investment portfolio, the nation is signalling to global markets that it intends to remain relevant and profitable long after oil demand peaks. But there is far more to this development than a mere pivot away from “black gold.” Below, we explore what this massive project entails, how it fits into Saudi Arabia’s broader strategy, and the implications for the global battery industry.

From Black Gold to Real Gold: Rethinking Economic Foundations

Saudi Arabia’s economy has long revolved around its vast oil reserves, which still form the bedrock of its Gross Domestic Product (GDP). But as global conversations around climate change gain traction, and technologies such as electric cars become mainstream, the Kingdom is confronted with an urgent need to diversify. Saudi Arabia’s Public Investment Fund (PIF)—its sovereign wealth fund—has historically turned to Silicon Valley for flashy investment opportunities, pouring significant capital into companies like Uber and Lucid Motors. While these ventures have achieved varied results, a new approach is now emerging: instead of merely investing in global tech darlings, Saudi Arabia is looking inward and refocusing on industries that can power the post-oil world.

The scale of the new mining initiative is indicative of how seriously the Kingdom regards its future beyond oil. Mineral extraction—particularly of battery metals such as lithium and nickel—aligns with a world that is increasingly running on renewable energy and electric vehicles rather than fossil fuels. As demand for these raw materials grows, Saudi Arabia aims to become a leading supplier, capitalising on global trends while stabilising its own economic outlook.

The Race Against Time: Forecasts and Rising Uncertainties

In mid-2023, the International Energy Agency (IEA) released an oil demand forecast that garnered significant attention. While it noted that geopolitical uncertainties—such as potential sanctions on Russia and Iran—could tighten the oil market in the near term, it also slightly lowered its demand outlook for 2025. Around the same time, the Organization of the Petroleum Exporting Countries (OPEC) issued its own forecast, projecting that global oil demand would continue to rise at least into next year. These conflicting reports underline a broader debate over the exact timing of ‘peak oil.’

Whether oil demand peaks soon or in a more distant future, the Kingdom’s leadership is not taking any chances. Saudi Arabia is well aware of the possibility that oil revenues could plateau or even decline in the coming years—a development that could drastically affect national income. By diversifying into mining and other domestic projects, the government is insulating itself against potential downturns in the global oil market. It is a strategy that also leverages the current boon in oil prices to fund new ventures while the coffers are still flush.

Strategic Partnerships: Aramco Steps Beyond Oil

A central part of Wednesday’s announcement is a collaboration between Aramco, the state oil giant, and the national mining company. Historically, Aramco’s expertise and resources have centred on extracting and exporting oil. But now, the corporation is broadening its horizons to include critical minerals essential for the energy transition. The Kingdom is aiming to establish a competitive advantage in the commodities that power electric vehicles, battery storage, and other low-carbon technologies.

For Aramco, this partnership offers a logical entry into an industry with long-term growth prospects. Companies in the battery supply chain are actively seeking new, reliable sources of minerals, especially at a time when electric vehicles are capturing a larger share of the automotive market. By anticipating that need, Saudi Arabia could develop a lucrative new revenue stream capable of offsetting any future decline in oil exports.

Battery Metals on the Global Stage: GM’s Big Bet

Saudi Arabia is not the only major player focusing on supply security for critical minerals. On the same day as the Kingdom’s announcement, General Motors (GM) revealed a partnership with Norwegian company Vianode, a synthetic graphite manufacturer. The agreement will commence in 2027—when Vianode expects to open a factory in North America—and run until 2033. Although the exact figures remain undisclosed, the multi-year deal is valued at “multi-billions,” according to both companies.

Vianode’s unique selling point is that it provides an alternative source of graphite—a key component in lithium-ion batteries—outside of China. China is the world’s largest producer and exporter of graphite, raising concerns about overreliance and potential supply chain vulnerabilities for automakers and battery producers. According to Vianode CEO Burkhard Straube, the deal exemplifies the desire of both GM and Vianode for a “resilient supply chain for North America.”

Why It Matters: Supply Chains and Energy Security

These developments indicate that the world’s biggest automotive and energy players are racing to ensure dependable sources of the metals essential for battery production. As countries push to cut carbon emissions and automakers produce more electric vehicles, demand for lithium, graphite, nickel, and cobalt is set to explode. However, the supply side has not always kept up with this surge in demand, leaving many manufacturers scrambling to lock down future resources.

Saudi Arabia’s move is significant for two reasons. First, by building a robust domestic mining sector, the Kingdom reduces its own economic vulnerability. Second, it positions Saudi Arabia as a leading exporter of the raw materials essential for the energy transition—allowing the country to wield influence in global supply chains even as demand for oil eventually wanes. In a world increasingly run on electric power, these critical minerals could become as strategic as oil is today.

The Broader Vision: Beyond Oil, Beyond Traditional Investments

The $100 billion mining initiative is just one facet of Saudi Arabia’s Vision 2030, a wide-ranging plan designed to modernise the nation’s economy and society. Beyond investing in metals, Saudi Arabia is also making waves in high-tech industries, entertainment, tourism, and even professional sports. Earlier major investments, such as the acquisition of Newcastle United in the English Premier League, signal a drive to build global influence and diversify revenue streams.

Meanwhile, the country’s increasingly proactive foreign policy and economic strategies—from peace negotiations to multi-billion-dollar green energy deals—highlight a desire to be seen not just as an oil powerhouse, but also as an emerging global force in clean energy, technology, and finance. This multi-pronged approach indicates that the Kingdom’s leaders are aware of the immense challenges posed by an evolving global economy.

Challenges Ahead: Sustainability and ESG Concerns

Although the announcement is momentous, Saudi Arabia’s mining ambitions are not without potential pitfalls. Mining operations can have significant environmental impacts, including habitat destruction, water pollution, and carbon emissions from heavy machinery. In today’s world, where Environmental, Social, and Governance (ESG) criteria are becoming increasingly important to investors, Saudi Arabia will need to address these risks head-on. Ensuring transparent oversight, following global best practices, and adopting sustainable technologies will be critical in establishing credibility.

Moreover, competition for battery metals is growing fierce. Nations like Australia, Canada, and Chile already have established mining industries and deep expertise in handling commodities like lithium and copper. For Saudi Arabia to truly stand out, it must offer compelling value—whether that be in the form of infrastructure, regulation, or technology—to attract the big players in the EV and battery sectors.

Looking Ahead

Saudi Arabia’s $100 billion mining gamble represents a pivotal moment in the country’s ongoing efforts to rewrite its economic story. Whether it’s lithium for electric vehicle batteries or copper for renewables infrastructure, the stakes could not be higher for global industries vying for these critical materials. In the short term, oil may continue to fill the Kingdom’s coffers, but the government’s eye is firmly on a post-hydrocarbon horizon. Through massive capital injections, global partnerships, and a strategic push for energy-transition metals, Saudi Arabia is actively shaping a new role for itself in the global economy.

For international investors, automakers, and tech giants, this could open up new avenues for collaboration—and competition. The countries and companies that manage to secure reliable access to these precious resources will gain a powerful edge in the booming EV and clean energy markets. In this sense, Saudi Arabia’s bold foray into mining is not just about shoring up its finances. It’s also about positioning the Kingdom at the centre of the world’s next great industrial revolution.