Unlocking the GCC’s critical minerals opportunity

Amidst the slew of deals announced during President Trump’s Middle East visit in May, none was more important for US economic policy than the agreement to collaborate with Saudi Arabia on establishing new supply chains for critical minerals.

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Critical minerals are the bedrock of the modern global economy. From smartphones in our pockets to electric vehicles on our roads, and the renewable energy systems powering a cleaner future, critical minerals underpin the technologies that will define the 21st century. As the world accelerates its shift toward digital innovation and green energy, securing reliable, long-term access to these essential materials becomes a strategic priority.

But there is an urgent need for more markets to participate in this sector, in order to expand and diversify global supply. For instance, China currently accounts for more than 90 per cent of rare earth refining, 77 per cent of cobalt processing and more than 60 per cent of battery-grade global lithium refining.

Importance of boosting critical mineral supply chains

For the Gulf itself, it is important that it boosts its critical mineral supply chains. In renewable energy, copper, lithium, manganese and nickel are fundamental to solar panel technology. In AI, copper, cobalt, aluminium, lithium and nickel are needed for wiring, data centres and energy storage infrastructure.

Conversely, this also represents an opportunity. The Gulf is uniquely positioned not merely as a global trading hub, but as a potential nexus connecting mining projects and their wider supply chains, from Africa to Asia and South America.

This geographical advantage, combined with the Gulf’s diplomatic agility, positions it as an invaluable partner in an increasingly protectionist global economy. Add to this the Gulf’s strategic investments in mining projects across Africa, alongside the recent partnerships signed by the UK and US with Saudi Arabia, and the region’s influence is set to expand.

Crucially, the Gulf’s access to pools of long-term capital, including the GCC’s Sovereign Wealth Funds valued at over $3tn, alongside family offices with over $100bn in assets, can help close the funding gap in mining — a notoriously capital-intensive industry where projects can take over 15 years from exploration to production.

The mining sector requires a staggering $2.1tn in new supply investments by 2050 to meet global net-zero ambitions. In return, metals and mining offer investors healthy returns coupled with positive exposure to key thematic trends, including the energy transition, geopolitics and inflation protection.

In practice, the pressures on publicly listed mining companies to deliver short-term returns for certain investors have shifted their focus towards consolidation rather than the creation of new supply. In contrast, private and sovereign capital can bring a longer-term perspective. That is ideally suited for the mining industry’s realities, which need investment across development life cycles and through commodity pricing volatility. The success of private capital-backed firms in bringing new projects into production — outpacing larger industry players — illustrates this comparative advantage.

So, how can the Gulf seize the moment? Firstly, it must invest decisively in its own processing and refining capabilities to develop end-to-end secure supply chains. The $1.36bn lithium processing plant in Abu Dhabi, a collaboration between EZAD Group and Titan Lithium, sourcing raw materials from Zimbabwe, offers a template for success. The region’s high-tech ecosystem and culture of innovation will reinforce its capacity to build up the necessary infrastructure.

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Secondly, the Gulf must foster genuine Public-Private Partnerships to identify and deliver viable projects. This involves creating a collaborative framework that helps to reduce the financial, technical and operational risks. That is the most effective way to incentivise those best-in-class mining operators capable of unlocking both local and international mineral resources, in a responsible and sustainable way.

The Gulf stands at a crossroads. With the right vision and strategic partnerships, it can transition from a transit hub into a global powerhouse in critical minerals supply chains. The region can help diversify existing supply routes and build resilient, secure and sustainable chains to underpin global clean energy and advanced technologies ambitions.

• Dominic Raab is Head of Global Affairs at Appian Capital, and former UK Deputy Prime Minister and Foreign Secretary.