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  • Updated: June 02, 2023

Saudi Arabia To Grow Lithium Processing Sector

Saudi Arabia To Grow Lithium Processing Sector

Saudi Arabia is developing a second lithium processing facility in an effort to participate in the energy revolution.

The first production is anticipated in 2026 at the factory, which will be a joint venture between Australian upstart European Lithium and Saudi industrial powerhouse Obeikan Investment Group, according to the Financial Times.

According to an existing contract, BMW in Germany will receive the lithium generated at the new factory.

“A lot of the world is fearful about what would happen if China switched off its [lithium] exports,” Tony Sage, executive chair of European Lithium, told the FT. “It would be a disaster for the energy transition.”

Many transition analysts say that the catastrophe is already upon us due to the actual scarcity of raw minerals, particularly lithium. While new supply networks independent of China are being planned in Europe and the US, others seem to be solely focused on China's supremacy in the region.

Saudi Arabia has a chance because of its cheap, plentiful electricity, which makes it an excellent location for energy-intensive industries like lithium manufacturing, the Financial Times stated in its analysis.

The Kingdom has already entered the electric vehicle (EV) market; early this year, it agreed to build a lithium hydroxide facility with Australian EV Metals, a battery technology company that is partially controlled by Riyadh.

The largest investor in Lucid Motors, a premium EV manufacturer in Saudi Arabia also has plans for domestic EV manufacturing in the near future. Since its announcement last week that it will raise $3 billion in new capital this week, Lucid hasn't exactly been performing well over the previous few years. The Saudi sovereign wealth fund would provide the majority of the funding.

Additionally, Saudi Arabia wants to be more involved in the mining sector. A collaboration between the sovereign wealth fund and the state-owned mining corporation Ma'aden was reportedly established by the Kingdom earlier this year to purchase shares in mining projects throughout the globe.

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