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Not just oil, Saudi Arabia hopes to become a mining powerhouse
Seetao 2024-02-02 18:54
  • Developing mining can help Saudi Arabia achieve economic diversification, reduce dependence on oil, and lower economic risks
  • Oil has always been the main pillar of Saudi Arabia's economy, but with changes in the global energy market, Saudi Arabia needs to seek other economic growth points
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In Waad Shamal, 1200 kilometers north of the Saudi capital Riyadh, people extract phosphate and soak it in chemicals to turn it into an acid. Drive 1500 kilometers eastward along the railway and transport to the Port of Haier in Dallas. Then, this acid is turned into fertilizer or its precursor - ammonia, and then sails westward towards Brazil, southward towards Africa, eastward towards India and Bangladesh, and finally reaches the hands of farmers. According to Saudi Arabian Mining Company, the state-owned mining company responsible for the project, these farmers grow 10% of the world's food. This project has a huge scale. Its sales and domestic investment are approximately equivalent to 2% of Saudi Arabia's non oil GDP. Another similar project will soon begin delivering an additional 1%.

Phosphates are not the only mineral resource that Saudi Arabia hopes to provide fuel for the future of oil. On January 10th, the Saudi government revised the valuation of its undeveloped mineral deposits from $1.3 trillion to $2.5 trillion. This includes gold, copper, and zinc mines. By the standards of Saudi oil wealth (approximately $20 trillion at today's prices), this doesn't seem high. But by any other standard, this is a huge wealth.

Saudi Crown Prince and actual ruler Mohammad bin Salman hopes that in the future, the world will not be able to obtain minerals (including those needed for energy transformation) without Saudi Arabia, just like today when it comes to "black gold", Saudi Arabia cannot be separated. He intends to pursue this goal without resorting to resource nationalism like other countries from the United States to Chile and then to China. This attracted mining bosses and ministers from 80 countries to gather in Riyadh at the country's Future Mining Forum (FMF) at the time of this article's publication. It seems that in order to prove its commitment to openness, Saudi Arabia has signed agreements with the Export Import Banks of Russia and the United States. It is expected that the forum will finalize a deal worth $20 billion.Editor/XingWentao

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