Saudi Deputy Minister of Industry: Govt Support, Int’l Cooperation Essential to Confront Mineral Supply Challenges

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)
Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)
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Saudi Deputy Minister of Industry: Govt Support, Int’l Cooperation Essential to Confront Mineral Supply Challenges

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)
Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer at the Conference. (SPA)

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Khalid al-Mudaifer stressed the importance of government support and international cooperation in facing the challenges of the mineral supply chains.

International reports indicate an increase in demand for minerals such as lithium, cobalt, and copper, which requires an increase in investment in mining and processing by $3 trillion by 2030, in addition to the need to provide between 300 and 500 additional gigawatts of energy by 2030.

Mudaifer made his remarks at a panel discussion, "Security of Critical Mineral Supply: China? The West? Saudi Arabia? Or Africa?", at the African Mining Indaba Conference 2024 held in Cape Town, South Africa.

Increased spending

Mudaifer said the central mining region, extending from Africa to West and Central Asia, represents about 41% of the world's countries, boasts 3.5 billion people, or 46% of the world's population. Its economy is worth $9.6 trillion, or 11% of the global economy.

He indicated that the greater region possesses the world’s largest share of mineral reserves and resources, including 89% of its platinum, 80% of its phosphate, 62% of its manganese, and 58% of its cobalt. Africa alone possesses about 30% of the world's resources.

The Deputy Minister added that to enable the region to contribute to meeting the global demand for minerals, it must face the challenges of increasing spending on exploration, as the average global expenditure on exploration is $87 per square meter, while the region's average is $35 per square meter.

It must also develop the infrastructure, such as road, railway, or port network, build the necessary logistics corridors to achieve supply chain flexibility and invest in energy and water to supply mining projects.

Mudaifer asserted that governments must help reduce the risks associated with these challenges and solve them.

Financial incentives

He explained that governments must work to reduce investment risks in the sector by developing the legislative structure and regulations, especially since the implementation period for long-term minerals and mining projects may reach 7 to 9 years from exploration to production.

According to Mudaifer, conducting geological surveys would provide the necessary data for exploration projects, offer incentives, and establish regional centers to support exchanging knowledge, research, and development.

Saudi Arabia aims to become a regional hub for processing minerals and providing services to them, said Mudaifer, adding that the Kingdom enjoys a strategic location linking three continents, has a world-class infrastructure with three industrial cities dedicated to metallurgical industries, and is first in global road connectivity.

Regarding financial incentives, the Saudi Industrial Development Fund (SIDF) provides up to 75% of loans for industrial and mining projects.

Mudaifer stressed that the Kingdom has everything it needs to be a mineral processing hub and an engine for developing the mining sector in the greater region.

Saudi Arabia is ready to share its knowledge and capabilities with Africa and work together to build a prominent position for the greater region on the global stage, stressed Mudaifer, noting that Africa is critical to global supply chains and the energy transition.



Indian State Refiners May Buy Mideast Spot Oil to Replace Russian Shortfall

A worker rides a bicycle at the Bharat Petroleum Corporation refinery in Mumbai, April 24, 2008. REUTERS/Punit Paranjpe/FILE PHOTO
A worker rides a bicycle at the Bharat Petroleum Corporation refinery in Mumbai, April 24, 2008. REUTERS/Punit Paranjpe/FILE PHOTO
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Indian State Refiners May Buy Mideast Spot Oil to Replace Russian Shortfall

A worker rides a bicycle at the Bharat Petroleum Corporation refinery in Mumbai, April 24, 2008. REUTERS/Punit Paranjpe/FILE PHOTO
A worker rides a bicycle at the Bharat Petroleum Corporation refinery in Mumbai, April 24, 2008. REUTERS/Punit Paranjpe/FILE PHOTO

Indian state refiners are considering tapping the Middle East crude market as spot supply from their top supplier Russia have fallen, three refining sources said, in a move that could support prices for high-sulphur oil.
The three large state refiners- Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum- are short of 8-10 million barrels of Russian oil for January loading, the sources told Reuters.
The refiners fear continued problems in securing Russian oil in the spot market could continue in coming months as Moscow's own demand is rising and it has to meet commitments under the OPEC pact.
However, they added that they can draw from their inventories to meet crude processing needs in March.
Two of the sources said their company may lift more crude from Middle East suppliers under optional volumes in term contracts or to float a spot tender for high-sulphur oil.

IOC, the country's top refiner, previously floated spot tenders to buy sour grades in March 2022.
The companies did not immediately respond to requests for comment.
India became the largest importer of Russian crude after the European Union, previously the top buyer, imposed sanctions on Russian oil imports in response to the 2022 invasion of Ukraine. Russian oil accounts for more than a third of India's energy imports.
Russia's spot crude exports since November as its refineries resumed operations after the maintenance season and poor weather disrupted shipping activities, traders said.
“We have to explore alternative grades as Russia's own demand is rising and it has to meet its commitments under OPEC,” said another of the three sources.
Russia, an ally of the Organization of the Petroleum Exporting Countries, promised to make extra cuts to its oil output from the end of 2024 to compensate for overproduction earlier.
Also, most supplies from Russia's state oil firm Rosneft are tied up in a deal with Indian private refiner Reliance Industries, Reuters reported earlier this month.
The new deal accounts for roughly half of Rosneft's seaborne oil exports from Russian ports, leaving little supply available for spot sales, sources told Reuters earlier this month.
India has no sanctions on Russian oil, so refiners there have cashed in on supplies made cheaper than rival grades by the penalties by at least $3 to $4 per barrel.
Sources said there are traders in the market that are willing to supply Russian oil for payments in Chinese Yuan but noted that state refiners stopped paying for Russian oil in the Chinese currency after advice from the government last year.
“It is not that alternatives to Russian oil are not available in the market but our economics will suffer,” the first source said.
Oil prices rose on Tuesday, reversing the prior session's losses, buoyed by a slightly positive market outlook for the short term, despite thin trade ahead of the Christmas holiday.
Brent crude futures were up 42 cents, or 0.6%, to $73.05 a barrel, and US West Texas Intermediate crude futures rose 38 cents, or 0.6%, to $69.62 a barrel at 0742 GMT, Reuters reported.
FGE analysts said they anticipated the benchmark prices would fluctuate around current levels in the short term “as activity in the paper markets decreases during the holiday season and market participants stay on the sidelines until they get a clearer view of 2024 and 2025 global oil balances.”
Supply and demand changes in December have been supportive of their current less-bearish view so far, the analysts said in a note.
“Given how short the paper market is on positioning, any supply disruption could lead to upward spikes in structure,” they added.
Some analysts also pointed to signs of greater oil demand over the next few months.
“The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down,” Neil Crosby, Sparta Commodities' assistant vice president of oil analytics, said in a note.
Also supporting prices was a plan by China, the world's biggest oil importer, to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, as Beijing ramps up fiscal stimulus to revive a faltering economy.
China's stimulus is likely to provide near-term support for WTI crude at $67 a barrel, said OANDA senior market analyst Kelvin Wong.