Aerial view of the brine ponds and processing areas of Chilean company SQM's (Sociedad Quimica Minera) lithium mine in the Atacama Desert, Calama, Chile, September 12, 2022.
Martin Bernetti | Af | Getty Images
RIYADH, Saudi Arabia – The energy minister of Saudi Arabia – a Persian Gulf kingdom whose wealth and power rests disproportionately on its vast oil reserves – believes oil no longer poses a challenge to energy security.
Instead, he said, the coming battle will involve entirely different materials buried underground: key minerals.
“Oil is no longer a challenge for energy security – it will be gas, electricity, mainly minerals,” Saudi Energy Minister Abdulaziz bin Salman told participants at the annual Future Minerals Forum in Riyadh.
“Today, some of these countries as a country have 50% ownership of some of these required minerals and critical minerals… countries are racing to access critical minerals and secure their own supply chain. resources will ultimately lead to higher emissions, higher metal costs and higher energy prices.”
The Minister of Energy referred to minerals key to the energy transformation and advanced technologies – including lithium, cobalt, nickel, graphite, manganese and other rare earth elements key to the production of electric vehicles, batteries, renewable energy technologies, computers and household appliances.
China currently controls approximately 60% of global production of rare earth minerals and materials, according to the latest report by the Baker Institute for Public Policy at Rice University. This worries many countries, especially Western ones, as these resources become increasingly important to national security and economic stability.
“More AI (artificial intelligence) and data centers means more energy,” Bin Salman said. “You will have artificial intelligence, data centers, mining, cryptocurrency mining… Can you imagine what will happen to energy demand? Can you imagine a race between mining to produce energy and energy to extract mining and the growth of these economies? ” – asked the Minister of Energy.
“I really don't like the idea of being energy minister at that time.”
Demand for electricity is rising around the world, driven by growing demand for data centers required to power artificial intelligence, factories, electric vehicles and hotter, longer summers. A recent Department of Energy memo cited in numerous news reports shows that U.S. power grids could meet demand for new data centers by as much as 25 gigawatts by 2030.
Critical minerals and rare earth metals are also essential in renewable technologies such as solar panels and wind turbines, which play a key role in 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 the world's supply.
On Wednesday, Saudi Arabia announced that it had is working on a $100 billion mining investment because it wants to become a global center for both mining and mineral extraction and processing. The kingdom plans to significantly expand exploration for 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 oil-based economy.