Highlights
- Saudi Arabia launches an ambitious $170 billion mining development program, targeting rare earth elements and critical minerals.
- The proposed US-Saudi memorandum of cooperation aims to deepen bilateral ties in mining and mineral resources, potentially reshaping global supply chains.
- Despite vast energy reserves, Saudi Arabia lacks proven rare earth element deposits and processing capabilities.
- Saudi Arabia seeks to transform from an oil kingdom to a mining powerhouse.
In a move that raises both strategic eyebrows and geological questions, Reuters reports that Saudi Arabia and the United States will begin formal discussions on a memorandum of cooperation in mining and mineral resources, according to a statement from the Saudi Cabinet (Reuters, May 6, 2025, reporting by Cairo Bureau).
The talks will be led by Saudi Arabia’s Ministry of Industry and Mineral Resources (opens in a new tab) and the U.S. Department of Energy (opens in a new tab), to deepen bilateral ties in a sector increasingly vital to clean energy, defense, and advanced manufacturing. While the Trump administration continues to sign sweeping international agreements as part of its broader critical minerals offensive, this proposed deal with the Kingdom of Saudi Arabia may signal more about geopolitics than geology.
Despite its vast energy reserves and touted mineralogy underground, Saudi Arabia lacks the proven rare earth element (REE) deposits and midstream processing capacity critical to reshoring U.S. supply chains. That is the proof that the material can be pulled out, separated economically, and then, of course, refined.
Though the Kingdom has launched an ambitious $170 billion mining development program under Vision 2030 (opens in a new tab)—claiming potential in phosphates, bauxite, and even lithium—the hard reality is that its geology remains largely unproven for rare earths and high-value critical minerals at commercial scale.
Riyadh has little to no downstream capacity in REE separation, alloying, or magnet manufacturing. However, eventually, processing rare earths seems comparable in some ways to processing petroleum. Perhaps with enough dedication, investment, and commitment, Saudi Arabia could emerge as a regional mining and processing hub.
But the effort raises a critical question. Is this potential deal rooted in strategic supply-chain realignment, or is it a geopolitical signal aimed at diversifying partnerships away from China while rewarding a favored Middle East ally? For U.S. investors and policymakers, this is a moment to look past the diplomatic pageantry and ask: Will this memorandum generate real mineral supply or just promising headlines?
What’s Underground?
According to reports, Saudi Arabia possesses some notable deposits of rare earth elements, particularly within the Arabian Shield region in the western part of the country. Key sites such as Jabal Sa’id have been identified to contain significant concentrations of REE-bearing minerals like bastnaesite, dolerite, monazite, and synthesize.
These deposits may also include valuable critical minerals such as niobium, tantalum, and zirconium.
Recent geological surveys have substantially revised the Kingdom’s estimated mineral wealth, which is now valued at approximately $2.5 trillion, with rare earth elements contributing significantly to this figure.
As reported by Reuter (opens in a new tab)s, Arabian mining company Ma’aden (opens in a new tab) is in the process of selecting an international company to establish a rare earths processing partnership. The company aims to position the kingdom as a critical minerals hub.
However, despite the possible geological findings and aspirations, and a lot of money, Saudi Arabia currently lacks extensive midstream and downstream capabilities for processing and refining these minerals.
But Ma’aden is actively seeking to transcend such barriers. Potential collaborations include companies like MP Materials, Shenghe Resources, Lynas Rare Earths, and Neo Performance Materials, aiming to establish a comprehensive rare earths value chain within the Kingdom.
A Critical View
In a critical review for InvestorNews (opens in a new tab) (April 2, 2025), Anthony Milewski explores Saudi Arabia’s sweeping ambitions to pivot from oil superpower to global mining force under its Vision 2030 plan.
The report touts investment in infrastructure, exploration, and downstream industries like battery manufacturing and copper smelting, citing up to $2.5 trillion in untapped mineral wealth. Through Ma’aden and strategic ventures with Aramco and the Public Investment Fund, the country is targeting key minerals, including copper, lithium, rare earth elements, and uranium.
Milewski reports that Saudi leaders such as Khalid Almudaifer (opens in a new tab), Vice-Minister of Industry and Mineral Resources for Mining Affairs, pledged over $100 billion in new projects, and deals with global partners like Vale, Glencore, BYD, and Vedanta are already underway.
Yet, as Milewski cautions, the Kingdom faces steep challenges. For investors, the assumptions and, of course, the details matter. Water scarcity, limited mining infrastructure, and a workforce historically tied to the oil economy would likely stall progress. Most crucially, Saudi Arabia’s heavy dependence on petroleum—87% of budget revenue—represents a classic case of “Dutch disease,” making economic diversification structurally difficult.
While Saudi Arabia won’t rival Australia or Canada in mining leadership anytime soon, its deep pockets, geopolitical reach, and aggressive joint ventures may still position it as a pivotal—if not influential—player in the global critical minerals supply chain. Perhaps Donald Trump can help them along?
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