Saudi Arabia Battery Supply Chain Push to Counter China Dominance

Saudi Arabia is rapidly positioning itself as a key player in the global battery supply chain, with the potential to significantly reduce US and Western dependence on China for critical mineral processing. This strategic shift was highlighted during the FII PRIORITY Miami summit held from March 25 to 27, 2026, where industry executives and government officials discussed the urgency of diversifying battery material sources away from Chinese control.

Emilie Bodoin, founder of Chicago-based battery maker Pure Lithium, stated during the summit that the kingdom could help the United States bypass Chinese supply chain dominance by advancing lithium metal battery technology. Pure Lithium, which counts Saudi Arabia's Public Investment Fund among its backers, manufactures batteries used in both drones and data centers. The company holds a patent in Saudi Arabia for its vertically integrated lithium metal battery process and aims to establish a complete supply chain within the kingdom using its proprietary brine-to-battery technology.

China currently controls roughly 90 percent of global critical mineral processing, creating a significant vulnerability for Western nations. Export restrictions imposed by Beijing in recent years, combined with disruptions in the Strait of Hormuz linked to the ongoing conflict with Iran, have intensified concerns about the fragility of mineral supply chains. Lithium, classified as a critical mineral by the US Geological Survey, is essential for electric vehicle batteries, solar energy storage systems, and advanced defense applications.

Saudi Arabia holds several natural advantages in this strategic competition. The kingdom possesses lithium-bearing oilfield brines and vanadium deposits that can be used for battery production. Research conducted at King Abdullah University of Science and Technology has also explored methods for extracting lithium from seawater. The country's mineral wealth is estimated at $2.5 trillion, and its mining strategy targets an economic contribution of $64 billion by 2030. Additionally, Saudi Arabia aims to produce 300,000 electric vehicles annually by 2030 and is targeting 48 gigawatt hours of battery storage capacity within the same timeframe.

The kingdom became the first Middle Eastern country to establish lithium processing capacity in 2021 through a partnership with EV Metals Group to build a battery chemicals complex in Yanbu Industrial City. In November 2025, Ma'aden, the Saudi national mining company, signed a binding agreement with US-based MP Materials and the US Department of War to develop a rare earth refining and separation facility in Saudi Arabia. Under this joint venture, Ma'aden holds at least 51 percent of the project, while MP Materials and the US government jointly hold up to 49 percent. The refinery will process feedstock from Saudi Arabia and other regions to produce separated light and heavy rare earth oxides for defense and industrial applications.

Ma'aden has announced plans to invest $110 billion in expanding the kingdom's mining sector, including the development of infrastructure such as pipelines, ports, and railways. The company has also established a joint venture with Hancock Prospecting subsidiary Midana Exploration to accelerate mineral exploration across more than 24,000 square kilometers in Saudi Arabia.

On the US side, the Trump administration has launched multiple initiatives to reduce reliance on Chinese critical minerals. In February 2026, Project Vault was announced as a $12 billion public-private partnership combining a $10 billion loan from the US Export-Import Bank with approximately $2 billion in private capital. This strategic reserve aims to stockpile critical minerals for civilian industrial use, mirroring the concept of the Strategic Petroleum Reserve but focused on materials like rare earths, lithium, and cobalt.

Also in February 2026, the administration unveiled the Forum on Resource Geostrategic Engagement, known as FORGE, during a Critical Minerals Ministerial in Washington attended by representatives from 54 countries. FORGE replaces the Biden-era Minerals Security Partnership and aims to create a preferential trade zone for critical minerals with coordinated price floors enforced through adjustable tariffs. The United States signed 11 bilateral framework agreements at the event, including with the UAE. Gulf states including the UAE, Saudi Arabia, Oman, and Qatar participated in the Washington ministerial.

The Pax Silica initiative, launched in December 2025 to secure AI chip supply chains, has expanded to include energy infrastructure projects following the Strait of Hormuz disruptions. In late March 2026, Abu Dhabi's Mubadala Investment Company was announced as a founding member of the Pax Silica Investor Consortium alongside Japan's SoftBank and Singapore's Temasek. The US committed $250 million toward the consortium, which collectively manages over $1 trillion in assets and will focus on preserving access to energy and rare earth materials for the US and its allies.

The US Energy Department has also taken a 5 percent equity stake in Lithium Americas, which received a $2.26 billion loan to develop a lithium carbonate production facility at its Thacker Pass site in Nevada. Lithium Americas CEO Johnathan Evans stated during a panel at the FII summit that the US is engaged in a race it has been losing for a long time and that urgency is critical.

However, challenges remain in building alternative supply chains. Pure Lithium founder Bodoin cautioned that lithium chemicals have a shelf life as short as two to three months, limiting the effectiveness of stockpiling processed materials. She also noted that the United States lacks a long-term strategic plan comparable to Saudi Arabia's Vision 2030 framework, which provides a comprehensive roadmap for economic diversification including the development of mining and battery manufacturing capabilities.

The convergence of Saudi Arabia's natural resources, industrial ambitions, and strategic partnerships with the United States represents a significant development in the global competition for critical mineral supply chain control. While China's established dominance in mineral processing will take years to meaningfully challenge, the combination of government investment, bilateral agreements, and emerging technologies like lithium metal batteries could gradually reshape the landscape of global battery production and reduce Western vulnerability to supply disruptions.