Critical Minerals as Strategic Assets...Saudi Arabia Leads Major Transformation of Global Value Chains

The International Mining Conference in Riyadh. (Asharq Al-Awsat)
The International Mining Conference in Riyadh. (Asharq Al-Awsat)
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Critical Minerals as Strategic Assets...Saudi Arabia Leads Major Transformation of Global Value Chains

The International Mining Conference in Riyadh. (Asharq Al-Awsat)
The International Mining Conference in Riyadh. (Asharq Al-Awsat)

At a time when geopolitical and economic changes are accelerating, and global competition for critical minerals are intensifying, supply chains are undergoing a profound reshaping of their traditional rules.

This transformation is driven by an unprecedented surge in demand, coupled with mounting constraints on supply.

Asharq Al-Awsat held an interview on the sidelines of the International Mining Conference - currently under way in Riyadh under the patronage of Custodian of the Two Holy Mosques, King Salman bin Abdulaziz- with Nikolaus Lang, Managing Director and Senior Partner at Boston Consulting Group, Global Leader of the BCG Henderson Institute, and the Global Vice Chair for the firm’s Global Advantage Practice, along with Marcin Lech Managing Director and Partner at the firm.

The two figures offered an in-depth assessment of the global critical minerals landscape. They also addressed the role of artificial intelligence, Saudi Arabia’s position within these supply chains, and the key risks and opportunities shaping the sector’s outlook.

Supply Chains

Nikolaus Lang said that global minerals supply chains are being redrawn because demand is rising sharply at the same time as supply is becoming more constrained, concentrated, and politicized. Demand for critical minerals linked to energy transition, electrification, and advanced manufacturing is expected to grow 2–3× by 2040, with markets such as EVs and batteries alone driving multiples of today’s lithium, nickel, cobalt, copper, and rare earth demand.

Yet supply remains structurally tight: in several key minerals, 20–30% of future supply required by 2035 has not yet been identified or financed, while processing is heavily concentrated—often in a single country.

He added that the concentration is now translating directly into geopolitical risk. Recent years have seen export restrictions by China on gallium, germanium, and rare earth-related technologies, Indonesia’s nickel export bans, and rising resource nationalism in parts of Latin America.

For investors, this has changed the mindset fundamentally. Critical minerals are no longer viewed as cyclical commodities, but as strategic assets exposed to policy, trade, and security risk, with higher price volatility and longer development timelines challenging traditional project economics.

Artificial Intelligence

Lang stated that artificial intelligence is becoming one of the most important enablers in the race for critical minerals, precisely because the industry faces three simultaneous pressures: the need to expand the project pipeline, shorten development cycles, and improve success rates while controlling costs and risks. Traditional mining models simply cannot deliver the scale and speed required for the energy transition without fundamentally higher productivity.

In exploration, AI is already changing the odds. Machine-learning models can now analyze geological, geophysical, satellite, and historical drilling data simultaneously, identifying targets that would take human teams years to assess. Leading miners report that AI-supported targeting can increase discovery success rates by 2–3× and materially reduce exploration costs. This matters when global exploration pipelines have declined by nearly 40% since 2012, even as demand accelerates.

AI is also becoming critical in risk management—arguably the most underestimated lever. Advanced analytics can integrate commodity prices, supply-chain bottlenecks, permitting timelines, water and energy availability, and geopolitical signals to stress-test projects before capital is committed. In a world of volatile prices and policy-driven shocks, this ability to anticipate risk earlier is increasingly central to investment decisions.

That said, adoption is not without challenges. Many mining companies still struggle with fragmented data, legacy systems, and skills gaps, while regulatory uncertainty and concerns around explainability and ESG compliance slow deployment. AI only works when it is trained on high-quality, interoperable data—and much of the sector is still catching up on basic digital foundations.

Saudi Wealth

On the position of Saudi Arabia in the global critical minerals supply chain, Marcin Lech said that the Kingdom today sits at an inflection point in the global critical minerals supply chain. While it is not yet a dominant upstream producer across most critical minerals, it is rapidly emerging as a credible mining and processing ecosystem builder, with a strategy that spans domestic exploration, competitive processing, downstream demand, and international partnerships.

On the fundamentals, the Kingdom already has scale, he stated. Saudi Arabia is a top-five global producer of phosphate rock and among the top ten globally by phosphate reserves, while bauxite is another established pillar. More importantly, the exploration story is accelerating: recent work has highlighted new rare earth potential, alongside new gold and copper discoveries.

Lech added that what sets Saudi Arabia apart is the ecosystem it has deliberately put in place. The Mining Investment Law materially improved transparency, licensing timelines, and investor protections. That shift is reflected externally: in the Fraser Institute’s Annual Survey of Mining Companies, Saudi Arabia has been cited as one of the most improved jurisdictions globally over recent years, with a Policy Perception Index ranking now in the mid-20s globally, ahead of many longer-established mining regions. This is a meaningful signal for international investors.

Economically, Saudi Arabia brings competitive advantages few peers can match – with meaningful processing cost advantage versus major demand centers, driven by low-cost energy, industrial infrastructure, and scale.

Strategically, the Kingdom’s ambition is to become a critical minerals hub, not just a mining jurisdiction—connecting feedstock from Africa and Central Asia with processing, financing, and downstream demand. Saudi Arabia’s geopolitical neutrality and ability to work with both Eastern and Western partners is a real differentiator, particularly as supply chains fragment and investors seek diversification away from single-country dependence.

Risks and Chances

Marcin Lech said that looking ahead to 2025, the biggest risk for the global minerals sector is not demand — demand is clearly there — but whether supply can be mobilized fast enough in an increasingly fragmented world. We are entering a period where export controls, localization requirements, carbon border measures, and resource nationalism are becoming more common.

While many of these policies are understandable from a national security perspective, their cumulative effect risks undermining project economics, increasing volatility, and discouraging long-term investment at exactly the moment when the world needs more capital, not less.



US Debt Hits $40 Trillion as Higher Yields Open New Opportunities for Gulf Investors

An electronic display in Washington, DC, shows the US national debt on Aug. 19, as federal debt surpassed $40 trillion for the first time. (AFP via Getty Images)
An electronic display in Washington, DC, shows the US national debt on Aug. 19, as federal debt surpassed $40 trillion for the first time. (AFP via Getty Images)
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US Debt Hits $40 Trillion as Higher Yields Open New Opportunities for Gulf Investors

An electronic display in Washington, DC, shows the US national debt on Aug. 19, as federal debt surpassed $40 trillion for the first time. (AFP via Getty Images)
An electronic display in Washington, DC, shows the US national debt on Aug. 19, as federal debt surpassed $40 trillion for the first time. (AFP via Getty Images)

As US debt surpasses $40 trillion, Gulf investors are looking beyond the record figure to the broader implications of Treasury yields for capital flows, financing costs and investment strategies.

US assets and the dollar remain central to Gulf portfolios because of the depth of American markets and Gulf currencies’ links to the dollar. At the same time, higher yields are creating opportunities for Gulf sovereign wealth funds to rebalance portfolios and generate stronger returns on new investments.

Economists say the Gulf’s strong financial positions give the region considerable flexibility in navigating shifts in global interest rates. Higher fixed-income yields are also encouraging more diversified strategies spanning bonds, private credit, infrastructure and global equities, alongside growth sectors, such as technology, artificial intelligence and new energy.

Dollar remains central

Abdullah Almeer, assistant professor of economics at King Fahd University of Petroleum and Minerals (KFUPM), said US debt reaching $40 trillion does not pose an “immediate risk” to Gulf dollar-denominated investments, although it increases longer-term structural risks monitored by sovereign wealth funds and central banks.

Almeer told Asharq Al-Awsat that Saudi Arabia holds about $142 billion in US Treasury securities, while the dollar accounts for roughly 57% of global central bank reserves, underscoring its continued central role in the international financial system.

The doubling of US debt from about $20 trillion in 2016 to more than $40 trillion today warrants closer scrutiny of fiscal developments, but does not, for the foreseeable future, diminish the attractiveness of US markets or the dollar’s importance to Gulf economies, he argued.

US dollar bills are seen in front of displayed stock graph in this illustration taken, February 8, 2021. (Reuters)

Higher yields, new opportunities

Persistently high US bond yields could reduce the market value of existing securities and result in valuation losses for some Gulf portfolios.

Almeer does not, however, expect the US economy to default, stressing that American markets retain high levels of liquidity, depth and institutional stability. A large-scale Gulf exit from US assets is therefore unlikely in the foreseeable future.

The main transmission channel to Gulf economies is interest rates. Financing government debt exceeding $40 trillion requires massive Treasury issuance, potentially pushing yields higher, particularly if inflationary pressures persist or oil prices rise.

Saudi Arabia’s riyal peg of SAR 3.75 to the dollar also means its monetary policy is closely tied to US interest rates. A widening rate differential between the two countries could put pressure on the exchange rate and capital flows.

Almeer estimated Gulf financial reserves at about $874 billion, while sovereign wealth fund assets are approaching $5 trillion, giving the region substantial capacity to finance projects and continue attracting investment.

Broader diversification

Rising US debt could encourage Gulf states to further diversify investments toward emerging economies such as India, China and Türkiye, as well as real assets, global infrastructure and fast-growing Asian markets, he added.

Technology, AI and clean energy could also attract a larger share of investment, in line with economic and investment shifts taking place across the region and globally.

Debt figure is not the whole story

Almeer stressed that the $40 trillion threshold does not in itself represent a decisive turning point for the global financial system. Markets focus less on the absolute size of debt than on a country’s ability to finance and service it and maintain investor confidence.

The US still has the world’s largest economy and financial market, while the dollar remains the most widely used currency in international trade and reserves, giving Washington flexibility unavailable to most other economies, he noted.

What makes the figure significant is the accelerating pace of government borrowing and the rising cost of servicing that debt, particularly with interest rates remaining relatively high, he explained.

Economic history also suggests that absolute debt levels are not necessarily the decisive factor in determining crisis risk. Japan, for example, has managed debt exceeding 200% of GDP for extended periods without suffering a sovereign debt crisis, Almeer went on to say.

A Saudi money changer displays Saudi Riyal banknotes at a currency exchange shop in Riyadh, Saudi Arabia July 27, 2017. (Reuters)

Pace of debt growth matters

Mohammed Al-Farraj, Head of Asset Management at Arbah Capital, told Asharq Al-Awsat that the $40 trillion figure should be assessed alongside the pace of debt growth, servicing costs, the annual deficit and markets’ capacity to absorb US Treasury issuance.

He explained that the trajectory does not necessarily signal an imminent threat to Washington’s ability to meet its obligations, but it is reshaping the global investment environment by raising financing costs and altering returns across asset classes.

Higher Treasury yields can reduce the market value of existing bonds while offering better returns on new issues, creating opportunities for investors to rebuild fixed-income portfolios at more attractive levels, he added.

Al-Farraj said the current environment could encourage Gulf sovereign wealth funds to strike a better balance between fixed-income instruments and higher-growth assets, with opportunities in gold, global equities, private credit and infrastructure, alongside more flexible management of US Treasury maturities.

That does not mean abandoning the dollar, but rather adopting more diversified portfolio management while keeping dollar assets at the core of Gulf investment strategies, he remarked.

The main effect of record US debt on the Gulf may therefore be to accelerate the evolution of investment strategies rather than change their direction. The dollar remains pivotal, even as opportunities for Gulf capital expand across bonds, US markets, infrastructure, technology and fast-growing Asian economies.


Libya’s Dbeibah Halts Steel Firm's Production Due to Power Shortages

Prime Minister of Libya's Government of National Unity (GNU) Abdulhamid Dbeibah (Dbeibah's office)
Prime Minister of Libya's Government of National Unity (GNU) Abdulhamid Dbeibah (Dbeibah's office)
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Libya’s Dbeibah Halts Steel Firm's Production Due to Power Shortages

Prime Minister of Libya's Government of National Unity (GNU) Abdulhamid Dbeibah (Dbeibah's office)
Prime Minister of Libya's Government of National Unity (GNU) Abdulhamid Dbeibah (Dbeibah's office)

Prime Minister of Libya's Government of National Unity (GNU) Abdulhamid Dbeibah ordered the country's biggest steel firm, state-owned Lisco, to halt production due to power shortages, the state-owned Alwataniya TV channel reported on Thursday.

The broadcaster said the PM ordered Libyan Iron and ⁠Steel Company (Lisco)in the coastal city of Misrata to connect its power plant to the national ⁠grid.

Lisco is one of the only companies outside the energy sector still exporting products from the country.

The plant has a design capacity of 1.7 million ⁠metric ⁠tons of liquid steel per year.

Libya has had a power crisis as temperatures soar with outages of up to 10 hours a day in main cities, sparking protests.


Swiss and Chinese Reach Agreement on Updated Free Trade Deal

FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019.  REUTERS/Florence Lo/Illustration/File Photo
FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019. REUTERS/Florence Lo/Illustration/File Photo
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Swiss and Chinese Reach Agreement on Updated Free Trade Deal

FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019.  REUTERS/Florence Lo/Illustration/File Photo
FILE PHOTO: A China yuan banknote featuring late Chinese chairman Mao Zedong and a computer keyboard are seen reflected on an image of Chinese flag in this illustration picture taken November 1, 2019. REUTERS/Florence Lo/Illustration/File Photo

Switzerland and China have completed negotiations on an updated free trade deal which will increase Swiss access to its third biggest trading partner, Swiss officials said on Thursday.

Swiss president Guy Parmelin and China's Commerce Minister Wang Wentao announced the conclusion of the talks after a meeting in Bern.

Under the agreement, 99.8% of Swiss exports can enter the Chinese market duty free, upgrading an existing deal where the terms applied to only around half of Swiss shipments, Reuters reported.

Almost all Chinese exports to Switzerland are duty free under the existing 2014 free trade agreement between the two countries, Beijing's first such deal with an economy in continental Europe.

Other areas covered in the new agreement include rules of origin and trade facilitation, trade in services, digital trade, competition, and economic and technical cooperation.

China is Switzerland's third biggest trade partner after Germany and the United States, with bilateral trade amounting to 46 billion Swiss francs ($57.6 billion) so far in 2026.

Trade between the two countries has expanded from 31.7 billion francs in 2015 to 51.2 billion francs last year, according to figures from the Swiss customs office, with China a big market for Swiss chemicals, pharmaceuticals, precision instruments and watches.

Once the legal review has been completed, a signing of the deal is expected later this year, before the domestic approval processes in each country take place.