As Saudi Arabia redirects more and more crude from the east to the west, where it can export it safely, oil seems to be all that everyone is watching. But not Saudi Arabia itself. In fact, the world’s second-largest oil producer and top exporter has big plans in another area: battery storage.
Battery storage has been dubbed the Holy Grail of the energy transition because it helps make wind and solar installations less dependent on the weather. However, while costs have fallen significantly, battery storage remains a financial drag. An even bigger issue for many transition-focused regions is China’s dominance in all things transition, from solar panels to lithium. This is where Saudi Arabia’s time to shine in a new light came a few years ago.
In 2022, the kingdom staked a claim as a future mining hub with an event called the Future Minerals Forum that has since then 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 transition-important metals such as copper.
Indeed, metals and minerals are a major diversification vector under the Vision 2030 program spearheaded by Crown Prince Mohammed bin Salman, with the mining sector’s revenue contributions by 2030 expected at $64 billion, per The National. In other words, Saudi Arabia, the world’s top exporter of crude oil, is betting on the shift away from oil, and it is expecting this bet to 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 producing batteries before, they are completely constrained and unable to do so because all of today’s battery materials – while they are actually sourced globally, with the exception of graphite – they are all refined and processed in China,” the chief executive of a company called Pure Lithium told The National this week.
“By leapfrogging the current lithium-ion technology with lithium metal technology, we can circumvent Chinese dominance of the supply chain,” Emilie Bodoin also told the publication, referring to a significant concern of countries that want to reduce their dependence on hydrocarbons but not replace it with a new dependence on materials sourced from China.
This is an opportune moment for transition-related industries. As the supply of oil and gas from the Middle East gets severely squeezed, there is a new impetus for switching to alternative forms of energy, which need batteries to work in a way comparable—though alas not equivalent—to baseload power generation. In other words, this could be a golden moment for battery companies.
