An Australian company plans to invest $3 billion in Saudi Arabia in a bet on the metals used in batteries for electric vehicles.
EV Metals Group Plc’s spending will be on building plants to process minerals including lithium and nickel, and later expand into exploring for the battery metals, Managing Director and Chief Executive Officer Michael Naylor said. It would be one of the first major deals since Saudi Arabia passed a law to attract investments in mining as it looks to diversify its oil-dominated economy.
“We’re the first mover and we’ve got the know-how, the technology and the technical capabilities to bring to the kingdom to explore for these metals,” Naylor said in an interview. Based on its studies, EV Metals is “optimistic” it will find significant deposits of the materials used for electric car batteries in Saudi Arabia, he said.
The processing facilities will be developed over the next nine years, Naylor said. The company also has more than 15 applications for exploration licenses in the kingdom, and is looking for deposits of lithium, nickel and cobalt, he said.
If successful, it would be the first to unlock the metals in the kingdom. The rush to secure these raw materials as the world looks for cleaner modes of transport in the energy transition has pushed up demand and driven prices higher. Nickel in London has increased 82% in the past five years, and is up 16% in 2021 amid a wider surge in commodities. Lithium carbonate prices in China have risen to record highs.
Already a large producer of aluminum, and with expanding gold output, the Saudi government says the kingdom has over $1 trillion of untapped minerals. It is looking to attract foreign investors, and last year’s mining law offers a package of incentives including royalty-free periods and financing for new projects.
EV Metals is developing the battery chemicals processing facility with a view to supplying a potential automotive manufacturing cluster in the kingdom, Naylor said. The first stage of the project, which was announced last month, will produce 50,000 tons a year of high-purity lithium hydroxide monohydrate, with the plant initially processing feedstock imported from its mine in Western Australia.
Lucid Motors, which is part owned by Saudi Arabia’s sovereign wealth fund, is looking to build a manufacturing plant as part of a strategy to develop an auto-making hub in the country, people familiar with the plan said in January. The Public Investment Fund is also considering starting its own electric carmaker, other people familiar said in April.