The visit of the Minister of Industry and Mining of Saudi Arabia, Bandar Ibrahim Alkhoraye, is scheduled for the end of next month, which is part of the country’s strategy to invest oil surpluses in mining, and especially in critical minerals such as lithium and copper.
The Saudi Secretary of State is expected to meet with his counterpart in Chile, Aurora Williams, as well as with directors and executives of Codelco and Enami. In fact, last week the Ambassador of the Kingdom of Saudi Arabia in Chile, Khalid Al Salloom, was at the Ministry of Mining to discuss the visit of Minister Alkhoraye.
Aramco has been working on direct lithium extraction (DLE) systems, which is the technology required by the Government of Chile in the National Lithium Strategy.
According to Chilean government sources, The Saudi authority is interested in entering the lithium business through its state companies, seeing both alliances with Codelco in the Maricunga Salar, and with Enami in the Altoandino salt complex.
The Maricunga process is carried out by the Rothschild bank and there are already between 30 and 40 interested parties. Enami’s call closed last Friday, May 7, and now comes the question and answer stage, so the deadline to present formal interest ends on July 23.
At Enami they explained that there are two categories: one is an operating partner and the other is financing.. Those familiar with these processes estimated that the Saudis would enter through financing.
The president of the board of directors of Codelco, Máximo Pacheco, with the ambassador of the Kingdom of Saudi Arabia in Chile (in the center) and senator José Miguel Insulza.
The vehicle to channel this appetite would be Aramco, the Saudi state oil company that acquired the assets of Esmax in Chile – which owned the Petrobras service stations – for an amount that was around US$400 million.
According to a report from Scotia Capital, this Saudi firm, the largest oil company in the world, would also be a candidate to acquire the 22.16% that the Chinese Tianqi Lithium has in SQM. “If Tianqi really wants to exit SQM at the bottom of the cycle, perhaps its bankers should call Aramco, Saudi Arabia’s state-owned oil giant,” said a report by Ben Isaakson.
“There are a few reasons why this makes sense. Firstly, Aramco and Adnoc (the UAE equivalent of Aramco) have already stated their ambition to extract/filter lithium from brine. “Who has more experience extracting lithium from brine than SQM?” said the analyst.
According to Scotia Capital, “Aramco has a lot of money, recently strengthened by a raise of more than US$11 billion,” which argued that “an investment in SQM would significantly help Aramco improve an image that has been tarnished by accusations of “ecological wallet washing”.
“In our opinion, Saudi Aramco is an ideal candidate to acquire Tianqi’s 22% stake in SQM,” the report said, “for US$3 billion,” it detailed.
However, the Kingdom of Saudi Arabia has another state-owned company dedicated to mining: Ma’aden. This company mainly produces gold, but also copper, silver, aluminum and zinc, as well as industrial minerals such as bauxite and natural fertilizers such as phosphates.
In lithium, on May 21, the Ma’aden mining company reported success in its tests to extract lithium from seawater, although not at commercially viable levels. This state-owned company is the largest mining company in the Persian Gulf.
The CEO of Wealth Minerals, Marcelo Awad, said that “he would welcome Saudi investment”, given that “they are politically neutral, they do not interfere in the decisions of the governments in the countries where they are and they try to diversify their oil matrix towards lithium , solar and wind energy.”
Lithium business
The Kingdom of Saudi Arabia has created its own electric vehicle brand, Ceer, and built an electric vehicle metals plant. Its sovereign wealth fund, the Public Investment Fund (PIF), aims to produce 500,000 electric vehicles a year by 2030.
This commitment to electromobility requires critical minerals, such as copper and lithium.
In this context, Aramco has been working on direct lithium extraction (DLE) systems, which is the technology required by President Boric’s Government in the National Lithium Strategy. According to Middle East press information, trials of the new technology have been carried out in oil fields and related brines.
“There is good research in the kingdom with Ma’aden and Aramco, because the discharge from the oil fields has good salinity and good traces of minerals,” Saudi Deputy Minister of Industry and Mineral Resources Khalid bin Saleh Al-Mudaifer told Reuters. at a press conference in Riyadh in December 2023.
