How Australia fits into Saudi Arabia’s mining ambitions

Saudi Arabia wants to develop more of the value chain at home. Australia offers a useful combination of resources and experience to help in that effort

AFP

A person holds a piece of raw ore at the Al-Amar gold mine in Al-Quwayiyah, 195 kilometres southwest of the Saudi capital, Riyadh, on 28 May 2008.

How Australia fits into Saudi Arabia’s mining ambitions

Alice Gower

last update on 04 Oct 2026

Saudi Arabia has the resources and ambition to build a major minerals industry. Australia has the expertise and resources to help it move further up the value chain, while gaining investment and new markets of its own.

Saudi Arabia is discovering that mineral wealth alone will not be enough to build the mining industry it wants. The country now estimates the value of its mineral resources at $2.5tn, almost double the $1.3tn estimate made in 2016. Its Comprehensive Mining Strategy, launched in 2018, set out to turn that geological potential into an integrated industry. Turning what lies beneath the ground into the materials needed for Saudi Arabia's expanding industrial base will require investment, technology, expertise and processing capacity.

Australia is increasingly positioning itself as a partner in that effort. More than 400 Australian delegates registered for the Future Minerals Forum in Riyadh in January 2026, the country's largest presence at the event to date. Twelve Australian companies exhibited at the national pavilion, while agreements also extended cooperation into mining services, education and skills. The scale of the Australian presence is an indication of how quickly commercial interest in the Saudi mining sector is growing.

This interest coincides with the sector's rapid expansion. Mining is intended to become the third pillar of Saudi industry alongside oil and petrochemicals, with a target of increasing its contribution to GDP to $64bn by 2030. Exploration spending reached SAR1.05bn in 2024, more than double the SAR501mn spent a year earlier and five times the level recorded in 2020. The number of active exploration companies increased from just six to 226 over the same four-year period, while foreign investors now account for around two-thirds of mining investment.

Valuable deposits

Recent discoveries suggest there is plenty to work with. In September, Saudi Energy Minister Prince Abdulaziz bin Salman disclosed an estimated 110 million tonnes of ore containing high concentrations of rare earth elements and promising concentrations of uranium at Jabal Sayid near Medina. That adds to 644 million tonnes identified at two other advanced-stage exploration areas.

AFP — Former Saudi Minister of Industry and Mineral Resources, Ibrahim Al-Khorayef, during his speech at the Future Minerals Forum in Riyadh, on 9 January 2024.

However, the more difficult part of the equation begins after extraction. China mined around 60% of the world's magnet rare earths in 2024 but controls roughly 90% of separation, refining and magnet manufacturing. Extraction and separation are expensive and environmentally difficult processes that Beijing has been prepared to undertake at a scale few others have matched. Control of downstream processing can consequently be as important as access to the resource itself.

Saudi Arabia's economic transformation is also creating demand for those processed materials at home. The country is targeting production of 300,000 electric vehicles annually by 2030 and is building industries spanning aerospace, renewable energy, defence and advanced manufacturing. Lithium is moving onto the agenda as part of that expansion. Saudi Arabia successfully extracted lithium from oilfield brine in 2024, while the government has held discussions with US companies Albemarle and Lilac Solutions on extraction technologies and lithium hydroxide conversion for battery production.

The ambition therefore extends well beyond extracting Saudi mineral resources. Riyadh wants to develop more of the value chain at home, connecting mining to the industries that will consume its output.

A deeper partnership would serve both countries. Saudi Arabia would gain access to expertise, while Australia would gain investment and new markets

A useful partner

Australia offers a potentially useful combination of resources and experience to partner with Saudi Arabia in that effort. It has decades of expertise in exploration and mine development, established mining operators and significant mineral reserves of its own. It is also trying to move further along the value chain by expanding domestic processing rather than continuing to export the majority of its mineral wealth for processing elsewhere.

The emerging relationship between Saudi Arabia and Hastings Technology Metals indicates how those interests might intersect. Hastings' Yangibana project in Western Australia has an ore reserve of 20.9 million tonnes and an expected operating life of at least 17 years. Its deposits have an unusually high proportion of neodymium and praseodymium, materials used in the permanent magnets required for electric vehicles, wind turbines and other advanced technologies.

A November 2024 non-binding memorandum between Hastings and Saudi Arabia explores the possibility of processing concentrate from Yangibana in the country. If developed, the model would go considerably further than Saudi Arabia simply purchasing Australian minerals. Australian feedstock and expertise could contribute to processing inside the country, allowing Saudi Arabia to build domestic capability and retain more of the value generated along the supply chain.

AFP — Australian Prime Minister Anthony Albanese (right) speaks with Viva Energy employees inside the control room of the Geelong oil refinery in Geelong on 17 April 2026.

An eye on China

Australia has its own reasons for pursuing such arrangements. Canberra wants to reduce its reliance on Chinese processing and capture more economic value from its mineral resources, but developing an alternative processing industry is expensive. The International Energy Agency estimates that capital costs for refining projects outside the dominant supplier can be between 20 and more than 150% higher, while operating costs average around 50% more.

Those costs create an opening for Saudi Arabia, which brings capital, competitive energy costs, growing domestic demand and an industrial policy built around localisation. For its part, Australia brings established mining expertise, resources and experience across exploration, project development and processing. Bringing those advantages together could make projects possible that would be more expensive or difficult for either side to develop alone.

There is also a wider supply problem to solve. Demand for magnet rare earths outside China is expected to rise by 50% by 2035. Even with projects already planned, the IEA estimates that production from existing capacity would meet only around half of ex-China mining demand by then, around a quarter of refining demand and well below 20% of demand for magnets.

Events of the past six months have given Saudi Arabia another reason to accelerate plans already under way. Disruption to trade and energy flows through the Strait of Hormuz and Red Sea has demonstrated the economic costs that arise when important supply chains depend on infrastructure and routes beyond national control. China's dominance of mineral processing poses a different kind of exposure, but it similarly concentrates a critical stage of production elsewhere.

Reuters — Samples at the rare earth elements research and processing centre of the Australian mining company Viridis Mining and Minerals, Poços de Caldas, Brazil, on 20 June 2026.

Saudi Arabia's response is not simply to find alternative suppliers. Since 2018, its mining strategy has envisioned developing integrated mineral value chains, from exploration and extraction through refining and processing and into manufacturing. The disruption of 2026 has added urgency to an ambition that predates the current crisis.

Australia will not be the only partner in that effort. Saudi Arabia is cultivating minerals relationships with the United States and countries across Africa, Asia and the Middle East. But the scale of Australian commercial interest suggests companies there increasingly see Saudi Arabia not simply as a source of capital or a market for Australian minerals, but as a place where part of the industry itself could be built.

A deeper partnership would serve both countries. Saudi Arabia would gain access to the resources, expertise and experience needed to build more of the minerals value chain at home, while Australia would gain investment and new markets as it tries to capture more value from its mineral resources. Each has something the other needs to advance its ambitions.

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