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Saudi Arabia sees Codelco as a good candidate to develop lithium deposits despite challenges facing the state-owned Chilean company, a top government official said in an interview.
Saudi Arabia is looking for ways to import lithium from Chile and further process it domestically, the nation’s Industry and Mineral Resources Minister Bandar bin Ibrahim Alkhorayef said in an interview in Santiago. The plan would be to then sell batteries made from the metal both locally and abroad, he said.
“I am sure Codelco is a good candidate for collaboration because of the capabilities they have, because of the heritage, and the fact that it is a state-owned company,” Alkhorayef said.
Codelco is navigating one of the most challenging periods in its nearly 50-year history after a series of setbacks at projects and mines. The company has been juggling four large investments at its aging operations after decades of under-funding. At the same time, it is also making a foray into lithium as part of President Gabriel Boric’s plans to have more state control in output of the battery metal.
Meanwhile, Saudi Arabia is deploying vast amounts of capital to diversify its economy away from oil and gas. As such, it wants to secure access to critical minerals such as copper, nickel, lithium and iron ore to become a key hub for making batteries for electric vehicles and to develop a domestic auto industry.
Negotiations in Chile are at an early stage, and the kingdom is open to exploring structures for partnerships, Alkhorayef said.
“The beauty about the mining sector here in Chile, unlike some other countries, is that you have variety,” he said. “You have large, medium, and small companies. It’s a unique situation. Normally you find only large players, and, sometimes you can find good assets that are medium-sized where they can be complemented.”
Alkhorayef held meetings with Chile’s ministries of finance and mining on Monday, and on Tuesday will talk with Sociedad Quimica y Minera de Chile SA or SQM, Codelco, Antofagasta Minerals SA, and CAP SA.
Saudi Arabia is also looking to export fertilizers to bolster Chile’s farming activities and food security, the minister said.
Before landing in Chile the minister visited Brazil as part of plans to boost non-oil exports to Latin America’s largest economy. He also invited companies there to invest in the kingdom.
In mid-2023 Saudi Arabia signed a $2.6 billion deal to buy 10% of Vale SA’s base metal unit. The nation is looking to buy more stakes in foreign mining operations through Manara Minerals Investment Co., a vehicle established by the kingdom’s powerful sovereign wealth fund and Saudi Arabian Mining Co.
(By Valentina Fuentes and Matthew Malinowski)
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