The estimated value of Saudi Arabia’s mineral resources was nearly doubled this week to $2.5 trillion. The kingdom plans to expand its metals and rare earths industries significantly, signing MOUs with several key allies to collaborate on new mining initiatives. This increased valuation coincides with Saudi Arabia’s largest sale of sovereign debt since 2017, likely meant to fuel the ever-expanding ambitions of its Vision 2030 project.
The increasing value of Saudi Arabia’s natural resources, alongside its ongoing transformation into a regional business and tourism hub, should help to keep the nation’s debt within a very manageable range, relative to GDP. As it stands, Saudi Arabia’s sovereign debt to GDP ratio is significantly lower than the average among emerging market and OECD nations.
Related ETF: iShares MSCI Saudi Arabia ETF (KSA)
Saudi Arabia has significantly revised estimates for its untapped mineral resources including phosphate, gold and rare earths, boosting the valuation of these assets to $2.5 trillion – up from a 2016 forecast of $1.3 trillion. That is more than double the value of the kingdom’s $1.108 trillion gross domestic product (GDP) for 2022. Per Saudi Mining Minister Bandar Al-Khorayef, the country will capitalize on the increasing value of its mineral commodities by awarding over 30 mining exploration licenses to international investors this year and expanding the areas covered by such licenses. Per Mining.com, this effort will be backed by a $182 million mineral exploration incentive program. Saudi Arabia has already signed several memorandums of understanding (MOU) this week, securing mining collaborations with Egypt, Russia, Morocco and the Democratic Republic of Congo. Al-Khorayef expects deals worth up to $20 billion are expected to be signed at the ongoing Future Minerals Forum in Riyadh.
Though these resources will ultimately expand the industrial base of the Saudi economy, they will also play a key role in kingdom’s ongoing breakaway from a long-standing dependence on fossil fuel production. MRP has previously highlighted the kingdom’s drive to secure diplomatic ties with regional players in Syria and Iran, as well as and significant foreign investments from international powerhouses like China. The primary pillar of Saudi Arabia’s transformation is the Vision 2030 project – a major investment initiative meant to…
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