Minerals are back in the news, with President Donald Trump announcing Wednesday that they have reached an agreement on a potential deal for Greenland that includes rights to rare earth minerals.
Critical minerals and rare earths underpin technologies that power the clean energy transition, AI, advanced military equipment, and more, and their production is dominated by China. The country controls more than 90% of the world’s refined rare earth production and 60% of rare earth mine production, according to the International Energy Agency.
In an interview with CNN last week at the Future Minerals Forum in Riyadh, Saudi Arabia, Abigail Hunter, executive director of the non-governmental organization SAFE (Securing America’s Future Energy) Minerals Center, said that through “decades of strategic investments, state-backed projects, private sector coordination, and international investments,” China is “light years ahead” of the United States.
But analysts say Saudi Arabia is now growing its mineral sector to reduce its economic dependence on oil and increase its geopolitical influence.
Saudi Arabia claims to have $2.5 trillion in mineral reserves. These include gold, zinc, copper and lithium, as well as rare earth deposits such as dysprosium, terbium, neodymium and praseodymium, which are used in everything from electric cars and wind turbines to high-speed computing.
According to S&P Global, Saudi Arabia’s exploration and mining budget grew by 595% between 2021 and 2025 (though still modest by the standards of advanced mining countries such as Canada and Australia). The licensing of new mines to domestic and foreign companies is accelerating.
But exploration and the final product are two different things. “The reality is mining is a very long game,” Hunter says. “It takes three to five years to build a processing plant, and in some jurisdictions it can take up to 29 years.”
The country intends to abolish bureaucratic bureaucracy, reduce tax rates on mining investments and spend heavily to catch up with existing players.
At the Future Minerals Forum, state-owned mining company Marden announced it will invest $110 billion in metals and mining over the next 10 years, including forming international partnerships and attracting industry talent. “We are humbled and recognize that we cannot achieve this alone,” Marden CEO Bob Wilt said at the event.
The value of Saudi Arabia’s minerals still pales in comparison to the value of oil (Saudi Arabia’s proven reserves are second in the world). But there are other reasons for countries to invest in this sector.
Saudi Arabia’s Vision 2030 plan aims to diversify the country’s economy, with mining as a key pillar. The plan includes not only mineral extraction but also the creation of supply chains for domestic industry. For example, the country has set ambitious goals for the production of electric vehicles.
Experts say the growth in Saudi infrastructure could position the country as a regional hub for refining critical minerals mined elsewhere.
“As we look to the Global South and partner with African countries, it makes a lot of sense from a logistical standpoint to be able to process more minerals here,” Hunter said.
Saudi Arabia’s ambitions are of interest to the United States. In the past, the United States extracted heavy rare earths at home and then sent the raw materials to China for refining. Last year, China tightened export controls on heavy rare earths, many of which are used by the military.
Last November, during a state visit to Washington, Saudi Arabia announced it would invest up to nearly $1 trillion in U.S. infrastructure, technology and industry. Part of that agreement included bilateral cooperation on minerals. US company MP Materials (backed by the Department of Defense) has announced that it will partner with Marden and the US Department of Defense to build a new refinery in Saudi Arabia. MP Materials and the Department of Defense will own 49% of the refinery.
Melissa Sanderson, co-chair of the Critical Minerals Institute think tank, speculated that Saudi Arabia’s biggest asset as a processing hub is its “reliable quantities of energy” and that state-owned energy company Aramco’s expertise could allow it to develop improved refining methods, “which could displace China as a lower-cost, greener processing country.”
The environmental proof is not yet clear. Saudi Arabia was among a group of resource-rich countries that opposed some of the convention’s resolutions at the recent United Nations Environment Assembly that called for greater transparency in supply chains and limits on the negative environmental impacts of mining.
Mr Sanderson suggested the transition to a mining hub may not be all smooth sailing. Instability in the Middle East remains a challenge, and diplomatic relations between Saudi Arabia and mineral-rich African countries are complicated. That said, Saudi Arabia could look to Central Asian countries that have their own deposits and have long-standing ties with Aramco, he said.
“In many ways, the ongoing economic transformation[in Saudi Arabia]is aimed at elevating the country’s political status… into a key player, a linchpin, if you will, in the geopolitical scenario,” Sanderson said.
“This is not a game where you’re going to come right back,” she added. “This is a strategy about long-term power, long-term influence, and long-term profit.”
