US and Saudi seek African metals

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【Summary】The US and Saudi Arabia are in talks to secure metals from African countries for the energy transition, particularly in the electric vehicle (EV) industry. Saudi Arabia plans to buy $15 billion worth of mining assets in countries such as the Democratic Republic of Congo, Guinea, and Namibia to reduce China's dominance in the global supply chain for cobalt, lithium, and other metals used in batteries.

FutureCar Staff Sep 12, 2023 11:22 PM PT

The US and Saudi Arabia are in discussions about securing metals from African countries as part of their efforts to reduce China's dominance in the electric vehicle (EV) supply chain, according to the Wall Street Journal. Saudi Arabia is looking to purchase $15 billion worth of mining assets in countries such as the Democratic Republic of Congo, Guinea, and Namibia. This move would support the US in curbing China's role in the global race for cobalt, lithium, and other metals used in electric car batteries.

If the partnership between the US and Saudi Arabia is completed, it would be a significant step for both countries, despite strained relations between the Biden administration and the Gulf Kingdom. The initiative aligns with Saudi Arabia's plans for economic diversification and the development of its own EV industry.

The talks between the US and Saudi Arabia are part of a larger initiative by the Group of Seven countries to invest in global infrastructure projects in developing nations. This was emphasized at the G20 Leaders Summit, where leaders from various countries pushed for progress in narrowing the infrastructure gap in low and middle-income countries.

In July, China announced that it would restrict exports of critical minerals widely used in the semiconductor industry, in response to the US considering restrictions on exports of artificial intelligence chips to China. This move by China would require exporters to obtain licenses for shipping gallium and germanium products, which are classified as critical minerals by the US Geological Survey.

China currently accounts for a significant portion of global raw gallium and germanium production, but it primarily serves its domestic consumption. European companies have been caught in the crossfire of the trade tensions between the US and China, particularly in the export of key chipmaking materials. As a result, companies like NVIDIA have seen significant stock growth and anticipate further expansion.

Saudi Arabia is also interested in securing stakes in mining assets rather than buying and operating them directly. This approach would make the country a lucrative investor for African nations.