2023-09-11 02:20:24
The Wall Street Journal revealed that the United States and Saudi Arabia are in talks to secure the minerals needed for energy transitions in both countries from Africa, especially cobalt and lithium, which are essential in the manufacture of electric cars.
Quotes The newspaper Informed sources said that the White House is working to limit China’s dominance in the supply chain for the electric car industry, while Saudi Arabia is looking to buy $15 billion in global mining shares.
This activity between the two countries falls within the context of the global race for cobalt, lithium-ion and other minerals that are processed into lithium batteries necessary to operate electric cars, laptops and smartphones.
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Chinese companies are currently responsible for three-quarters of the world’s cobalt supplies and produce about 70 percent of the world’s lithium-ion batteries, raising concerns in the West about dependence on Beijing.
According to the website of the American smartphone technology company, CamelCompared to traditional battery technology, lithium-ion batteries charge faster, last longer, and have a higher energy density for longer battery life in a lighter body.
If the US-Saudi partnership is completed, it will represent a positive step for two countries whose relations have been strained since President Joe Biden took office as he promised to make the Gulf Kingdom a “pariah” because of its human rights record, according to what the Wall Street Journal says in its report.
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Since the Russian invasion of Ukraine, the United States has criticized Saudi Arabia’s alignment with Moscow to keep oil prices high, and warned against its embrace of China, although relations between Washington and Riyadh have begun to improve with increased trade cooperation.
People familiar with the matter told the newspaper that under the ideas being discussed with the Biden administration, a state-backed Saudi project would buy stakes in mining assets in African countries such as the Democratic Republic of the Congo, Guinea and Namibia.
The sources said that American companies will then have the rights to purchase some production from those shares owned by Saudi Arabia, although the details are still under discussion, according to the newspaper.
US automakers have long sought better access to minerals important for lithium-ion batteries, and have increasingly entered the mining business.
But a large portion of the world’s cobalt lies in difficult business environments such as Congo.
Saudi Arabia is likely to exercise greater flexibility and be prepared to invest in countries where corruption is rampant, which will protect American companies from this risk, according to the Wall Street Journal.
The Kingdom is also less committed to environmental, social and governance concerns that hinder the ability of other investors to deploy capital there, according to the newspaper.
This effort would motivate Saudi Arabia, which has long been the world’s dominant oil power, to invest more in the mining sector and buy stakes in projects around the world.
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These steps are considered important for the Kingdom’s plans to diversify the economy, which includes entering the electric car manufacturing sector, establishing huge solar energy farms, and establishing high-tech industries such as artificial intelligence.
The White House is seeking financial support from other sovereign wealth funds in the region, but talks with Saudi Arabia have made more progress, according to people familiar with the matter who spoke to the newspaper.
The newspaper quoted sources as saying that the US-Saudi talks on mining come as part of a larger G7 initiative to invest in global infrastructure projects in developing countries.
Lithium is an essential material for manufacturing electric car batteries. Archives
On Saturday, the White House said that it would support the development of a corridor linking Congo and Zambia to global markets, through the Angolan port of Lobito, and announced a transcontinental economic corridor linking India to Europe via Saudi Arabia.
China has built its position in the electric vehicle supply chain by purchasing mining production in African countries such as Congo. Informed people told the newspaper that China’s main advantage is the willingness of its companies to outbid other companies, and Saudi Arabia is ready to do the same.
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