Saudi Arabia is redirecting the financial strength, geological expertise and drilling capabilities of Saudi Aramco, one of the world's largest energy companies, into a major critical minerals exploration and mining initiative that could reshape global supply chains and competition for African mineral resources. Aramco and the Saudi Arabian Mining Company, known as Maaden, announced on Tuesday the establishment of a joint venture focused on mineral exploration and hard-rock mining operations within Saudi Arabia. Maaden will own 51 per cent of the business while Aramco will hold the remaining 49 per cent.
The proposed venture will explore an area of approximately 182,000 square kilometres, equivalent to almost 10 per cent of Saudi Arabia's land area and nearly twice the size of Liberia. Copper will be the principal target, alongside zinc, lead and rare-earth elements, according to details reported by Reuters. This strategic move significantly expands Saudi Arabia's critical-minerals strategy beyond its traditional reliance on Maaden and the country's sovereign wealth fund.
Aramco brings to the partnership more than 90 years of accumulated geological and subsurface information from oil and gas exploration, along with advanced drilling capabilities, digital technology infrastructure and an extensive supply chain developed during its petroleum operations. Maaden contributes expertise in mining and processing gold, phosphate, aluminium and other minerals. In January 2025, the two companies had already signed non-binding terms for a transition-minerals venture concentrated on extracting lithium from underground brines and developing direct-lithium-extraction technology.
Aramco reported finding lithium concentrations of up to 400 parts per million in some areas where it operates, with commercial lithium production potentially beginning by 2027, subject to further technical work and approvals. The venture announced this week represents a significant expansion from the initial lithium focus, placing copper and conventional hard-rock exploration at its centre. This strategic pivot is particularly significant because many oil-producing countries possess geological data and drilling expertise that can be adapted for mining operations.
Saudi Arabia is attempting to convert knowledge accumulated during its oil era into a competitive advantage in the minerals economy. Saudi authorities estimate that the kingdom possesses approximately $2.5 trillion in undeveloped mineral resources, including gold, copper, phosphate, bauxite and rare-earth elements. This estimate represents a substantial increase from an earlier assessment of $1.3 trillion, following new geological surveys and stronger commodity prices.
However, the $2.5 trillion figure should be interpreted as a government estimate of potential mineral endowment rather than proven, economically recoverable reserves. Saudi Arabia has moved aggressively to reduce exploration risk and accelerate mineral development. Annual mineral-exploration spending increased from approximately $55 million (SAR205 million) in 2020 to $280.5 million (SAR1.05 billion) in 2024.
The government has also established an exploration-support programme worth approximately $182 million (SAR685 million), under which qualifying companies can receive cash incentives covering as much as 25 per cent of eligible exploration costs. The scheme also subsidises part of the cost of employing workers in Saudi Arabia. Mining companies can obtain up to 75 per cent of qualifying project capital through the state-backed Saudi Industrial Development Fund.
Foreign investors are permitted to own their Saudi mining businesses fully, enhancing the kingdom's competitive positioning. These incentives position Saudi Arabia as a formidable competitor at a time when global mining industry spending on new discoveries is declining. S&P Global Market Intelligence estimates that worldwide non-ferrous exploration budgets declined to $12.4 billion in 2025, with only 21 per cent directed to grassroots exploration—the lowest proportion in the dataset.
Mining companies have concentrated more capital around existing operations rather than funding new discoveries. For African mineral-producing nations, the significance of Saudi Arabia's critical minerals strategy extends far beyond investment opportunities. The kingdom is building processing industry capacity designed to use both locally produced and imported minerals.
Maaden has agreed to develop a rare-earth separation and refining venture with US miner MP Materials and a US government partner, with Maaden controlling at least 51 per cent of the proposed facility. The plant is designed to process feedstock from Saudi Arabia and other countries before supplying Saudi, American and allied manufacturing industries. While this creates a potential market for African rare-earth producers, it also presents competitive challenges.
African governments, including those in Zimbabwe, Namibia, Ghana, Tanzania and the Democratic Republic of Congo, are attempting to transition from exporting unprocessed minerals towards developing local refining and manufacturing capacity. If Saudi Arabia offers more reliable electricity, cheaper financing, developed ports and government-backed construction incentives, African mineral concentrates could be shipped to the kingdom for processing rather than refined locally, allowing Saudi Arabia to capture value, employment and industrial expertise that African countries seek to retain. Saudi Arabia has already demonstrated interest in African mineral assets through Manara Minerals, established by Maaden and Saudi Arabia's Public Investment Fund to acquire international mining assets.
In October 2024, Maaden's then-chief executive Robert Wilt told Reuters that Manara was in advanced discussions over a minority interest in First Quantum Minerals' Zambian copper and nickel operations. The proposed transaction involved a 15 to 20 per cent stake reportedly valued between $1.5 billion and $2 billion. First Quantum operates the Kansanshi and Sentinel copper mines and the Enterprise nickel mine in Zambia.
Wilt described copper as Manara's leading priority and noted that Africa's mineral wealth, Copperbelt deposits and geographical proximity made the continent a logical investment destination. However, no transaction with First Quantum had been publicly completed. In February 2025, First Quantum stated it had no specific deadline and wanted any new partner to remain for the long term.
Manara's only publicly completed major international acquisition remains its $2.5 billion purchase of a 10 per cent interest in Vale Base Metals, which owns copper and nickel assets in Brazil, Canada and Indonesia. Saudi Arabia has also signed mineral-cooperation agreements with Zambia, the Democratic Republic of Congo, Egypt, Morocco and Djibouti, indicating broader continental engagement. The gap between Saudi Arabia's mineral ambitions and completed African acquisitions demonstrates that strategic interest does not automatically translate into capital deployment.
Nevertheless, the kingdom is combining oil-generated capital, substantial public subsidies, geological information and international processing partnerships to establish an integrated critical-minerals industry that could reshape global minerals competition. For African countries, Saudi Arabia's mineral strategy presents three distinct possible relationships: the kingdom could become an investor financing African mines; it could become a customer purchasing African copper, lithium or rare-earth material for processing; or it could become a competitor, attracting exploration budgets and building refineries that might otherwise have been situated close to African deposits. The most favourable outcome for Africa would involve Saudi financing alongside African mining, processing and infrastructure development rather than arrangements where raw materials leave the continent before most value is created.
Source: africa.businessinsider.com