The Deputy Minister of the Saudi Arabian Ministry of Industry and Mineral Resources recently stated that the country hopes to launch a new battery materials commodity trading platform, including graphite and rare earths, and is currently exploring its feasibility.
In the process of global transition towards green energy, Saudi Arabia is striving to establish an economy independent of oil. Measures taken include increasing investment in overseas assets and turning to the exploitation of untapped mineral resources in the country. It is reported that these untapped mineral resources include copper, lithium, phosphate, gold, etc., with an estimated value of about $1.33 trillion.
Khalid bin Saleh Al-Mudaifer, Deputy Minister of Industry and Mining Affairs, said in a media interview: “If you want to become a mining center (in Saudi Arabia), you must have everything. We are studying future mineral commodity exchanges where commodities traded will include graphite, rare earths, lithium cobalt and even nickel because there are currently no commodity exchanges for trading these commodities on a large scale nor effective price discovery mechanisms.”
Al-Mudaifer said that Saudi Arabia has been studying the establishment of this trading platform for the past three months but does not expect any relevant decisions to be made within the next six months.
He added: “We don’t know yet if this is feasible…because such minerals are scarce and have different specifications so they are not as easy to operate as aluminum or crude oil.”
Graphite and rare earth metals are important materials for electric vehicles and energy transformation; however, there is currently no exchange that can provide contracts for graphite or rare earth metals globally. However, lithium and cobalt can be traded on London Metal Exchange (LME) or Chicago Mercantile Exchange (CME).
Al-Mudaifer stated: “We are working with some consulting firms as well as major commodity trading institutions.”
Since this year began,Saudi Arabia has made high-profile moves into the mining industry while betting on global energy transformation. It is worth mentioning that Manara Minerals, an investment fund established by Saudi Arabia in January this year, aims to acquire overseas mining assets.
Manara Minerals is a joint venture between the Saudi state-owned mining company (Ma’aden) and the Saudi sovereign wealth fund (PIF), and it will prioritize the acquisition of copper, nickel, iron ore, lithium and other mineral products.
In July of this year, the company acquired a 10% stake in Vale’s Base Metals division (VBM), which is mainly responsible for copper-nickel operations used in energy transformation to increase copper and nickel production.