Oil is no longer a challenge to energy security: the Saudi minister says

RIYADH, Saudi Arabia – The Energy Minister of Saudi Arabia – the Gulf kingdom whose wealth and power rests disproportionately on its vast oil reserves – believes oil is no longer a challenge of energy security.

Instead, he said, the coming battle will be for completely different materials buried underground: critical minerals.

“Oil is no longer a challenge to energy security – it will be gas, electricity, mainly minerals,” Saudi Energy Minister Abdulaziz bin Salman told participants at the annual Future Minerals Forum in Riyadh.

“Today some of these countries, as a country, have 50% ownership of some of these necessary minerals and critical minerals … countries are racing to access critical minerals and secure their own chain of supply. and resources will ultimately lead to higher emissions, higher metal costs and higher energy prices.”

The energy minister is referring to minerals critical to the energy transition and advanced technologies – including lithium, cobalt, nickel, graphite, manganese and other rare earth elements crucial to making things like electric vehicles, batteries, technology of renewable energy, computers, and household goods. .

China currently controls about 60% of the world’s production of minerals and rare earth materials, according to a recent report from Rice University’s Baker Institute for Public Policy. That has many countries, especially those of the West, concerned, since these resources are becoming more and more important for national security and economic stability.

“More AI (artificial intelligence) and data centers means more energy,” Bin Salman said. “You will have AI, data centers, mining, crypto mining … can you imagine what will happen to the demand for energy? You can imagine the race between mining to create energy, and energy to create mining and the growth of these economies asked the energy minister.

“I really don’t like the idea of ​​being the energy minister at that time.”

Demand for electricity around the world is growing, fueled by growing demand for data centers needed to power AI, factories, electric vehicles, and hotter and longer summers. A recent Energy Department memo cited in numerous press reports projected that the US power grid could see up to 25 gigawatts of new data center demand by 2030.

Critical minerals and rare metals are also essential for renewable technology such as solar panels and wind turbines, which are central to many countries’ efforts towards an energy transition away from fossil fuels. China refines 95% of the world’s manganese – a chemical element used in batteries and the manufacture of steel – despite mining less than 10% of its global supply.

Saudi Arabia on Wednesday announced that it is working on a $100 billion mining investment as it aims to become a global hub for mining and mineral extraction and processing. The kingdom plans to significantly expand its exploration for lithium within its borders, as well as for other critical minerals.

Boosting its mineral sector and investing in a domestic supply chain is part of Saudi Arabia’s Vision 2030 mission to diversify its economy away from oil.