Saudi Arabia emerging as a critical minerals hub

This is a thought leadership report issued by the S&P Global Institute.

Saudi Arabia’s economic diversification: From oil to minerals 

Saudi Arabia is diversifying its economy away from oil by developing its mining sector. The country has increased exploration budgets, especially for gold and copper, and estimates its mineral wealth to be over $2.5 trillion. Vision 2030 aims to boost mining’s GDP contribution to 240 billion riyals ($64 billion), create 200,000 jobs and attract $27 billion of new investment by 2030. Policy reforms, including a lower mining tax, streamlined permitting and enhanced geological surveys have, until recently, been key drivers of foreign investment and sustainable sector growth. While regional conflicts have created shipping challenges, heightened insurance costs and increased investment uncertainty, they have not materially slowed Saudi Arabia's mining ambitions.

Saudi Arabia’s mining ambitions and industrial growth agenda are complementary. Initiatives such as the Oxagon industrial city, AI data centers at Oxagon, the NEOM Green Hydrogen project, and Diriyah and Qiddiya projects could increase local demand for steel, aluminum, copper and other critical minerals. Growth in renewables deployment will also spur domestic demand for minerals. However, the scale and timing of this demand are subject to increased uncertainty as the country reprioritizes and shifts its focus toward projects with clearer business cases. Nonetheless, these projects, which benefit from funding and infrastructure investments, aim to reduce the country's import costs for metals by creating a solid domestic market. 

Saudi Arabia’s critical minerals potential

Saudi Arabia possesses vast, yet underdeveloped, mining and mineral resources. The Ministry of Industry and Mineral Resources values these reserves at approximately 9.375 trillion riyals ($2.51 trillion), a nearly 90% increase from an estimated 5 trillion riyals ($1.31 trillion) in 2016. This upward revision incorporates newly discovered rare earth elements and transitional metals, along with increases in phosphate ore, copper, zinc and gold reserves. Saudi Arabia's western region hosts most of the country's mines, while the northern area is rich in phosphate deposits. 

Saudi Arabia's commitment to expanding its mining sector is evident in the substantial increase in its exploration budget since 2022. The minesite exploration budget surged almost sevenfold in 2025, reaching $146 million from $21 million in 2022, according to S&P Global Market Intelligence data. While this growth is considerable, Saudi Arabia’s exploration spending remains modest compared with established mining jurisdictions such as Australia and Canada, which typically allocate over $1 billion annually. 

The allocation of exploration budgets by commodity has shifted significantly, reflecting Saudi Arabia's evolving priorities and market dynamics. The share of gold has risen sharply to comprise 72% of the total exploration budget in 2025 from 55.2% in 2022, underscoring the metal’s importance as a driver of sector growth, foreign investment and economic diversification. Copper accounted for 23% of the 2025 budget due to its rising global demand, especially for the energy transition and infrastructure development. 

State-owned entities dominate the sector

State-owned entities are at the core of Saudi Arabia’s non-oil diversification strategy. Saudi Arabian Mining Co. (Maaden) remains the flagship operator and is one of the largest mining companies globally.

Manara Minerals Investment Co., established in January 2023, is a joint venture between Maaden and the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund. In contrast to Maaden, which primarily focuses on gold, phosphate and aluminum, Manara was founded to explore and develop minerals critical to defense applications and the energy transition, including lithium, cobalt, copper, nickel and rare earth elements. In July 2023, Manara acquired a 10% stake in Vale Base Metals Ltd., a move expected to be instrumental in facilitating Manara’s expansion of copper and nickel production throughout its portfolio. 

State-owned oil company Saudi Aramco is also pursuing opportunities in the sector, aiming to extract lithium from brine in its oil fields. In January 2025, Aramco and Maaden announced a $2 billion joint venture to extract lithium and advance direct lithium extraction technologies, with commercial production potentially starting in 2027. 

Location as leverage 

Saudi Arabia seeks to capitalize on its geography — with access to raw materials and proximity to end-use markets in Europe, Asia and Africa — and become a central player in the downstream supply chain, creating a hub for critical minerals processing and EV manufacturing.

The country has attracted foreign investment, with Vedanta Copper International VCI Ltd. planning a $2 billion copper smelter and refinery and Zijin Mining Group Ltd. committing up to $1.6 billion for zinc smelting, lithium extraction and copper refining facilities. Australia’s Hastings Technology Metals Ltd. has partnered with the Ministry of Investment on a multiphase rare earth processing project valued at up to $1.9 billion.

Saudi Arabia has also drawn foreign investment related to battery chemicals and EV production. Ceer National Automotive Co., a joint venture between PIF and Hon Hai Technology Group (Foxconn), was launched in November 2022. Lucid Motors Ltd., in which the PIF and its affiliates have invested about $8 billion, is slated to begin full-scale EV production at its King Abdullah Economic City plant near Jeddah in 2026.

Powering prosperity – Saudi Arabia’s competitive position

Saudi Arabia’s metals and mining sector benefits from abundant low-cost energy resources and reliable domestic fuel supplies, giving it a cost advantage in energy-intensive processes such as extraction, smelting and refining. Ongoing investments in natural gas and renewables further strengthen this edge. 

The country’s strategic location between major markets, integrated infrastructure and state-backed financing make it attractive for investment in mining, metals processing and emerging areas such as battery materials. One critical policy shift — reducing the tax rate for mining companies to 20% from 45% over the past few years — has further increased the sector's appeal to foreign and domestic investors.

Navigating supply chain risks

While regulatory reforms have improved Saudi Arabia’s global mining standing, further progress in transparency and governance is needed to meet international standards. The sector faces ongoing environmental challenges, such as water scarcity, and the underexplored Arabian Shield poses geological and technical risks as high exploration spending does not always yield discoveries. These concerns, alongside operational risks, infrastructure gaps, workforce shortages and logistical issues, could delay projects, requiring investment in solutions such as desalination and improved transport and power networks. Price volatility and financial risks are other considerations. Saudi Arabia’s new metals exchange aims to manage these risks by providing greater market stability and attracting global expertise.

Saudi Arabia’s mining sector is poised for growth as the country continues to implement reforms and attract global investment to meet the diversification goals of Vision 2030. By leveraging its strategic location, low-cost energy resources and integrated infrastructure, the country is positioning itself as a global leader in mining. 

Realizing this ambition will also depend on addressing environmental (water scarcity) and geological considerations and operational challenges in the sector. Still, the upcoming launch of the metals exchange, expanded licensing and high-profile events such as the annual Future Minerals Forum represent significant progress toward establishing Saudi Arabia as a regional and global hub for mineral trading, processing and responsible supply chains.