As Saudi Arabia redirects more and more crude oil from the east to the west, where it can be safely exported, oil seems to be the only thing everyone is watching. But not Saudi Arabia itself. In fact, the world’s second-largest oil producer and exporter has big plans in another area: battery storage.
Battery storage has been called the Holy Grail of the energy transition because it helps make wind and solar installations less dependent on the weather. However, while costs have decreased significantly, battery storage remains a financial burden. An even bigger problem for many transition-focused regions is China’s dominance in everything related to the transition, from solar panels to lithium. This is where a few years ago it was time for Saudi Arabia to shine in a new light.
In 2022, the kingdom laid claim to being a future mining hub with an event called the Future Minerals Forum that has since been held annually, seeking to boost investment in the desert state’s mineral resources, which appear to be significant and include battery minerals such as lithium and vanadium, along with other important transition metals such as copper.
Indeed, metals and minerals are an important vector of diversification under the Vision 2030 programme, led by Crown Prince Mohammed bin Salman, with income contributions from the mining sector by 2030 expected to reach $64 billion, according to The National. In other words, Saudi Arabia, the world’s largest exporter of crude oil, is betting on abandoning oil and hoping that this bet will pay off (and it may well do).
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“If you think about other countries starting to make batteries that haven’t been making batteries before, they’re completely limited and can’t do it because all of the current battery materials (although they’re actually sourced globally, with the exception of graphite) are all refined and processed in China,” the CEO of a company called Pure Lithium told The National this week.
“By surpassing current lithium-ion technology with lithium metal technology, we can bypass Chinese dominance of the supply chain,” Emilie Bodoin also told the publication, referring to a major concern of countries that want to reduce their dependence on hydrocarbons but not replace it with a new dependence on materials from China.
This is an opportune time for transition-related industries. As Middle East oil and gas supplies severely shrink, there is a new push to shift to alternative forms of energy, which need batteries to operate in a manner comparable (although sadly not equivalent) to baseload power generation. In other words, this could be a golden moment for battery companies.