Vedanta Copper, a subsidiary of India’s Vedanta Limited, has committed to investing $2 billion in Saudi Arabia’s copper sector. This investment will support the Kingdom’s ambitious Vision 2030 to position Saudi Arabia as a global leader in minerals and mining. The move aligns with the country’s broader plan to diversify its economy and reduce reliance on oil exports.
Major Investment to Strengthen Copper Production
The $2 billion investment will fund the construction of a cutting-edge smelter and refinery in Ras Al Khair City. This facility will have a 400,000-tonne annual capacity to meet rising copper demands in Saudi Arabia. Additionally, Vedanta will build a copper rod plant with an annual capacity of 300,000 tonnes for electric cables.
Saudi Arabia has included this major investment in its series of agreements to attract foreign direct investment into mining. The Kingdom plans to expand its mineral sector, raising GDP contributions from $17 billion to $64 billion by 2030. The Vedanta deal will contribute nearly $19 billion to Saudi Arabia’s economy, reduce copper imports, and create thousands of jobs.
The Role of Copper in Saudi Economic Transformation
Saudi Arabia currently imports most of its copper, fulfilling a domestic demand of 365,000 tonnes annually. Demand is expected to double by 2035, making local copper production investment crucial for the Kingdom’s economic stability. Developing these projects will enhance self-reliance and reduce the need for copper imports in the future.
Chris Griffith, CEO of Vedanta’s Base Metals division, emphasized the project’s significance for Saudi Arabia’s economic diversification. He noted that Saudi Arabia, a leader in oil production, is now ready to explore its vast mineral resources. The Kingdom’s mining transition supports Vision 2030’s goal of unlocking up to $1.3 trillion in untapped mineral resources.
Enhancing Global Supply Chains
Copper is vital in the global energy transition, playing a key role in renewable energy systems and electric vehicles. The shift toward sustainable transportation and electrification will drive global demand for copper, setting it to rise by 40% by 2040.
Vedanta’s expansion into Saudi Arabia is part of a broader strategy to meet the growing demand for copper. The company is addressing concerns over a looming global copper shortage. Industry giants like BHP predict a 10 million-tonne shortfall by 2034, which could impact supply chains and increase prices.
The Vedanta investment is expected to create thousands of jobs and support the growth of hundreds of downstream industries in Saudi Arabia. Establishing a local copper supply chain will provide much-needed stability and self-sufficiency. Saudi Arabia’s government has already created strategic partnerships to enhance its mining capabilities, including investments through the Manara Minerals fund, a joint venture with the Public Investment Fund (PIF).
These initiatives will further support the Kingdom’s energy transition, contributing to its long-term economic diversification efforts.
The Road Ahead for Saudi Arabia’s Mining Sector
As part of its Vision 2030 strategy, Saudi Arabia has already secured significant mining deals, including a 10% stake in Vale’s copper and nickel spin-off. The Kingdom is also negotiating to acquire a stake in Pakistan’s Reko Diq copper and gold mine. These moves reflect Saudi Arabia’s commitment to becoming a key player in the global mining industry.
Vedanta’s investment in the Saudi copper sector signals a new era for the Kingdom, where mining and sustainable resource extraction will play a central role in diversifying the economy and ensuring future growth.
