Aramco, one of the world's leading integrated energy and chemicals companies, and Ma'aden, the largest multi-commodity mining and metals company in the Middle East and North Africa region, today announced the signing of non-binding Heads of Terms, which envisages the formation of a minerals exploration and mining joint venture (JV) in the Kingdom of Saudi Arabia. The proposed JV would focus on energy transition minerals, including extracting lithium from high concentration deposits and advancing cost-effective direct lithium extraction (DLE) technologies. Commercial lithium production could potentially commence by 2027.
The proposed JV is expected to extend Aramco's capabilities into an adjacent sector, leveraging its technological innovation and skills in resource and data management. It would seek to unlock the potential of the Kingdom's high-value mineral resources, with the aim of helping meet growing demand for lithium and other transition minerals both domestically and globally. The JV is expected to further harness natural resources utilizing a wealth of subsurface data, as well as emerging technologies, to advance the Kingdom's economic diversification and energy ambitions.
There is significant potential for the extraction of energy transition minerals in the Kingdom. For example, as part of its operations, Aramco has identified several areas with a high lithium concentration of up to 400 parts per million. The JV is expected to benefit from Aramco's significant expertise and operations, including the use of existing infrastructure, industry-leading drilling operations, and more than 90 years of geological data in its area of operations.
Nasir K. Al-Naimi, Aramco Upstream President, said: "This announcement reflects Aramco's focus on positively contributing to the global energy transition. The proposed JV will enable extraction of energy transition minerals, contributing meaningfully to the growth of more sustainable energy solutions while diversifying our portfolio for a lower-carbon future. We expect that this partnership will leverage the world's leading upstream enterprise to apply significant low-cost advantages, industry experience, technological innovation, accumulated subsurface knowledge and an integrated supply chain ecosystem, with a view to meeting the Kingdom and potentially the world's projected lithium demand."
Darryl Clark, Ma'aden Senior Vice President of Exploration, said: "Ma'aden has been undertaking one of the world's largest single-jurisdiction exploration programs across the Arabian Shield, to unearth the estimated $2.5 trillion mineral endowment. This proposed JV would enable us to accelerate exploration of the Arabian Platform, combining Aramco's vast knowledge of the area with Ma'aden's extensive mining and exploration expertise."
Lithium is a fundamental component of the energy transition, essential for production in fast-growing sectors such as electric vehicles, energy storage, and renewables. The total global demand for lithium has tripled over the past five years, and its compound annual growth rate is anticipated to exceed 15% per annum through 2035. The JV could potentially help meet the Kingdom's forecasted demand for lithium, which is expected to grow twenty-fold between 2024 and 2030, supporting an estimated 500,000 electric vehicle batteries and 110 GW of renewables.
The planned JV, which is subject to customary closing conditions including regulatory approvals, was announced during the Future Minerals Forum in Riyadh.