JOHANNESBURG—The United States will face an uncertain future should a Saudi Arabia-led initiative that seeks to create a minerals “Super Region” be successful, energy experts and geopolitical analysts say.
According to the Saudi plan, the world’s most mineral-rich regions—Africa, the Middle East, and South Asia—would band together to effectively control the supply of rare-earth elements fundamental to modern life and the global energy transition.
The United States is locked in a battle with China and, to a lesser extent, Russia, to secure supplies of the precious metals needed to effectively end the world’s dependence on fossil fuels.
Saudi Arabia recently hosted the Future Minerals Forum, an event attended by state energy and mining officials from around the world and some of the globe’s biggest mining companies.
Mr. Al-Salem is president of the Royal Commission for Jubail and Yanbu, a state agency focused on Saudi Arabia’s economic development.
Also at the event, Mark Cutifani, chairman of Canada’s Vale Base Metals, described the Saudi initiative as a “historical opportunity for Saudi Arabia to create a new sustainable mining industry from scratch.”
“Opportunities like that happen a few times in history,” he said.
However, some analysts are concerned that members of the “Super Region” will reduce or even cut the supply of crucial minerals to Western nations, particularly the United States.
“Should China and Russia gain a significant measure of control over this ‘Super Region,’ then, of course, we could see a scenario in the future where critical minerals are used as geopolitical leverage over Europe and North America,” Chris Maroleng, international affairs analyst at Good Governance Africa, a Johannesburg-based nonprofit, told The Epoch Times.
“In the extreme case of a global conflict, pitting East against West so to speak, Russia and China could have control of most of the world’s essential minerals.”
It estimates that about $400 billion in capital expenditure would be required for mining, refining, and smelting of critical minerals by 2030 in order to limit global temperature increases.
The “Super Region” could become a global leader in the production of minerals and related clean energy technologies and “become a counterweight to China’s dominance of the energy transition ecosystem,” said Julian Kettle, senior vice president of research at Wood Mackenzie.
However, Chris Yelland, an independent energy and minerals analyst in South Africa, said “exactly the opposite” could happen should Beijing “hijack” the initiative.
“We’ve seen what’s happened with BRICS, which has become an organization dancing to the tunes played by China and Russia,” he told The Epoch Times.
Many foreign affairs analysts see the emergence of a larger BRICS group of countries as a vehicle for Beijing and Moscow to end “Western hegemony” over the global economy.
The BRICS group of emerging nations was formed in 2006 by Brazil, Russia, India, and China; South Africa joined in 2010, at Beijing’s behest. Saudi Arabia, Egypt, the United Arab Emirates, Iran, and Ethiopia joined BRICS on Jan. 1.
According to BRICS, the group is forming a stronger coalition of developing nations that will better represent the interests of the Global South on the world stage.
China and Russia, supported by South Africa, are the primary movers behind an initiative aimed at the “de-dollarization” of developing world economies.
Many of the world’s leading minerals and metals suppliers, including Congo and South Africa, are perceived to be anti-West, and most of Africa and the Middle East have close ties with China and Russia and increasingly strained relations with Washington.
Russia holds some of the biggest reserves of gold, iron ore, aluminum, nickel, copper, coal, oil, and natural gas.
Congo has more than 70 percent of global cobalt reserves; the Central African country also is rich in diamonds, copper, tin, tungsten, and gold. Many of its most productive mines are owned by Chinese companies.
According to its government, it’s the fifth-largest mining sector in terms of gross domestic product value globally. It holds the world’s biggest reserves of gold, platinum, chrome ore, and manganese ore, and the second-largest reserves of zirconium, vanadium, and titanium.
Vanadium alloys make some of the hardest steel in the world, while titanium is used in manufacturing cars, aircraft, and ships. Both minerals are used in weapons such as missiles, and to armor-plate tanks and military aircraft.
According to Wood Mackenzie’s white paper, the Middle East has the potential to help Africa overcome problems that could prevent the establishment of a minerals “Super Region,” such as a dire shortage of quality infrastructure and underinvestment in mining.
“The Middle East hosts sovereign wealth funds that control trillions of dollars and have extensive experience investing abroad in physical infrastructure and, in some instances, mining. This expertise can be leveraged to invest in mineral supply chains at home and throughout the Super Region,” the document states.
China’s appetite for developing world minerals is “growing all the time,” Mr. Yelland said.
“Its giant manufacturing industry means its energy demand is also massive. Coal remains the industry’s main energy source, and China uses more coal than the rest of the world put together,” he said.
“But it’s also becoming the world leader in renewable energies, and figures show it invested almost $545 billion in new ‘green’ technologies in 2022.”
The United States has been much slower than China to embrace renewables; consequently, its demand for rare-earth minerals has been much lower than China’s.
The Inflation Reduction Act, signed into law by President Joe Biden in early 2022, earmarked $430 billion in government investment and tax credits for green-energy development, according to the DOE.
BloombergNEF (BNEF), an organization that researches and analyzes global energy trends, estimates that the demand for metals and minerals for the energy transition will grow at least fivefold over the next 30 years, representing a $10 trillion opportunity.
“The energy transition could lead to a super-cycle for the metals and mining industry. This cycle will be driven by massive expansions in clean energy technologies, which would spur demand for both critical minerals and traditional metals,” said Yuchen Huo, mining analyst for BNEF.
It should be “no surprise, then, that countries like China and the United States are likely to battle—perhaps all too literally—over access to the finite natural resources vital to the world’s energy transition,” he said.
“Capitalism depends on it. From Africa to the South China Sea, nations are scouring the globe for new, profitable energy ventures.”
Elizabeth Sidiropoulos, who heads the South African Institute of International Affairs, isn’t convinced that a minerals “Super Region” would “automatically translate” into producers in the developing world sending most of their minerals China’s way.
“We hear all this talk of East versus West, with the whole of the developing world allied with China and Russia, but I don’t think it’s going to be as simple as that,” she said.
“With demand for minerals skyrocketing, and with most minerals located in the developing world, especially Africa, you’re going to have these mineral-rich nations wanting the best of all worlds.
“We’re already seeing it with a country like South Africa, for example. It wants good relations and strong trade with any country that can benefit it. The European Union remains its biggest trading partner, and the United States is also one of its biggest trade partners.
“This is despite the West’s opposition to South Africa’s positions with regard to the war in Ukraine and its apparent friendship with Moscow and Beijing and its relations with Hamas and the Palestinians in Gaza.”
There’s going to be “very little black-and-white in the world of the future, and plenty of gray areas,” and that will be true of global minerals and metals sectors as well, Ms. Sidiropoulos said.
“Africans aren’t stupid. They’re going to keep channels open because the world has become a very unpredictable place, and that means having partners in all corners of the world, not just in one corner.”
