Critical minerals have emerged as a new arena of geopolitical competition. As the world shifts to electric vehicles (EVs), renewable power and high-tech manufacturing, demand for lithium, cobalt, copper, nickel, rare-earth elements and other critical minerals is soaring. Production and processing, however, are highly concentrated: the US Geological Survey defines 44 critical minerals and identifies China as the leading worldwide producer of 30 of these, leaving supply chains bottlenecked and vulnerable to disruption and geopolitical risk. Sensing an opening, the Gulf states are leveraging their mineral resources, financial capital and geographic location to compete with established players and capture market share.
Looming supply gaps – the International Energy Agency warns of deficits of 30% for copper and 40% for lithium by 2035 – enhance that leverage, creating space for new entrants to reassure markets and diversify access. Although they remain marginal producers, Gulf states are scaling up their critical-mineral ambitions through a mix of overseas acquisitions, domestic initiatives and strategic partnerships. Domestically, this has included greater investment in domestic EV and battery production – setting up integrated supply chains and processing plants – to secure strategic raw-material access.
Internationally, the Gulf states are hoping to offset China’s dominance by positioning themselves as reliable alternative partners to Western consumers. Economic security at home The Gulf states view growing investments in critical minerals as vital for their long-term economic security and industrial success. To achieve their industrial ambitions in EVs and the batteries-manufacturing sector, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) will require stable and uninterrupted access to critical minerals, notably lithium, as well as copper, nickel and rare-earth elements. Saudi Arabia’s Public Investment Fund has obtained major stakes in EV ventures – including creating Ceer, the first homegrown EV brand.
and acquiring majority ownership of United States-based EV manufacturer Lucid Motors – with an aim to produce 500,000 EVs annually by 2030. To support this, Saudi Arabia has designated the ‘King Salman Automotive Cluster’ at King Abdullah Economic City (KAEC) as the official automotive-manufacturing hub, where it intends to foster a full domestic EV value chain, having opened the first Lucid Motors international factory in KAEC in 2023. The UAE is establishing an EV assembly plant in Abu Dhabi in partnership with NWTN, and expects EVs to comprise half of vehicles in the country by 2050. Oman has signed a US$150 million investment deal to establish an EV- and battery-production hub in Duqm.
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