Aerial view of the brine and processing areas of the lithium mine of Chilean company SQM (Sociedad Quimica Minera) in the Atacama Desert, Calama, Chile, on September 12, 2022.
Martin Bernetti | AFP | Getty Images
RIYADH, Saudi Arabia – The energy minister of Saudi Arabia – the Gulf kingdom whose wealth and power rests disproportionately on vast oil reserves – believes that oil is no longer a challenge to energy security.
Instead, he said, the coming battle will be for entirely different materials buried underground: critical minerals.
“Oil is no longer a challenge for energy security – it will be gas, electricity, mostly minerals,” Saudi Energy Minister Abdulaziz bin Salman told attendees at the annual Future Minerals Forum in Riyadh.
“Today some of these countries have, as a state, 50% ownership of some of these necessary minerals and critical minerals… countries are racing to access critical minerals and secure their own supply chain. Rushing to secure access to resources will ultimately lead to greater emissions, higher metal costs and higher energy prices.”
The energy minister was referring to minerals key to the energy transition and advanced technologies – including lithium, cobalt, nickel, graphite, manganese and other rare earth elements that are key to making things like electric vehicles, batteries, renewable energy technology, computers and household goods. .
China currently controls approximately 60% of the world’s production of minerals and rare earth materials, according to a recent report Rice University’s Baker Institute for Public Policy. This has worried many countries, especially those in the West, as these resources are becoming increasingly important for national security and economic stability.
“More artificial intelligence [artificial intelligence] and data centers mean more energy,” Bin Salman said. “You will have AI, data centers, mining, crypto mining…can you imagine what will happen to energy demand? Can you imagine a race between mining to create energy and energy to create mining and the growth of those economies?” asked the energy minister.
“I really don’t like the idea of being energy secretary at that time.”
Demand for electricity around the world is rising, fueled by increasing demand for the data centers needed to power AI, factories, electric vehicles, and hotter and longer summers. A recent Energy Department memo cited in numerous press reports predicts that the US power grid could see demand for as much as 25 gigawatts of new data centers by 2030.
Critical minerals and rare earth metals are also essential to renewable energy technology such as solar panels and wind turbines, which are key to many countries’ efforts to transition away from fossil fuels. China refines 95% of the world’s manganese — a chemical element used in batteries and steel production — despite mining less than 10% of its global supply.
Saudi Arabia announced on Wednesday that it had is working on a $100 billion mining investment as it aims to become a global hub for both mining and mineral extraction and processing. The kingdom plans to significantly expand its exploration of lithium within its borders, as well as other critical minerals.
Strengthening the minerals sector and investing in the domestic supply chain is part of Saudi Arabia’s Vision 2030 mission to diversify its economy away from oil.
