### Summary
Saudi Arabia's $2.6 billion mining deal with Vale SA positions the Kingdom as a global player in the mining industry and reshapes the global decarbonization landscape.
### Facts
- 💰 Saudi Arabia secured a 10% interest in mines worldwide that produce critical materials for decarbonization through a $2.6 billion deal with Vale SA.
- 🌍 The deal marks a shift in the metal and mining investment landscape and positions Saudi Arabia as a pivotal global player.
- ❓ Governments worldwide are questioning who controls the commodities needed for decarbonization and sustaining the economy during climate change and volatile markets.
- 🇨🇳 China, previously the dominant mining country, is seeing a shift in the mining industry due to geopolitical factors.
- ⛏️ Saudi Arabia is focusing on developing its mining industry as part of the Vision 2030 agenda for economic growth and diversification.
- 💎 The Kingdom passed a law in June 2020 to attract foreign investors into its mining business and aims to attract nearly $200 billion in mining investments by 2030.
- 🌿 The development of the mining industry is part of Saudi Arabia's transition towards green energy.
- 🌐 Saudi Arabia has formed international alliances in the mining industry, including partnerships with Vale SA and an agreement with Japan for rare earth mining.
- 🌍 The Kingdom's mining industry is still in its infancy and requires further investment, both domestically and internationally, to grow and develop expertise.
Main topic: Saudi Arabia's Crown Prince launches a $200 million fund for early-stage investment in high-tech companies.
Key points:
1. The fund is part of King Abdullah University of Science and Technology's strategy to transform research into economically productive innovations in sectors like health, sustainable environment, energy, and industrial leadership, and economies of the future.
2. The initiative aims to provide quality opportunities for researchers, faculty staff, and students, supporting them to apply science and research to create sustainable global impact by strengthening international and local partnerships.
3. The strategy also includes the launch of the National Transformation Institute for Applied Research, restructuring of research centers, and strengthening international partnerships to enhance the competitiveness of the Kingdom's economy and its global position as a leader in innovation.
Saudi Arabia emerged as the top global export destination for Dubai Chamber of Commerce members in the first half of 2023, with exports valued at 35 billion dirhams ($9.53 billion), according to official data.
The Saudi government's efforts to diversify the economy away from oil and promote private sector growth are showing progress across four dimensions: exports, output, government revenue, and employment, although oil remains a dominant force in the economy.
Main topic: Increasing Saudi Arabian investment in U.S. startups.
Key points:
1. Saudi Arabia-based firms have been participating in a growing number of funding deals with U.S. startups since 2019, with the number of deals increasing each year.
2. Saudi Arabia-based firms have also been leading or co-leading more funding rounds, indicating a stronger investment presence in the U.S. market.
3. Saudi Arabian investors, including funds such as Saudi Arabia's Public Investment Fund and Sanabil, have been actively investing in U.S. startups, with notable investments in companies like Uber and Lucid Motors.
Saudi Arabia's robust diversification efforts, driven by Vision 2030 strategies, have resulted in a surge of business activities and economic growth, despite worldwide economic uncertainty and concerns over inflation and geopolitical tensions. The country's economic diversification journey has led to the opening of new sectors and advancements in fields such as tourism, media, finance, and clean energy, making it a regional economic and technology hub. Saudi Arabia's continued focus on sectors like mining, metals, hospitality, tourism, and clean energy, along with fiscal consolidation efforts and revenue-enhancing measures, are key to sustaining its economic diversification model.
Main Topic: Saudi Arabia's robust economic diversification efforts driven by Vision 2030 strategies.
Key Points:
1. Saudi Arabia's economic diversification efforts have led to a surge in business activities despite global economic uncertainty.
2. The country has made significant improvements in its Economic Diversification Index scores and has opened new sectors in tourism, media, hospitality, finance, and the digital sphere.
3. Investment in digital transformation and the clean energy sector are expected to contribute to sustained economic growth and make Saudi Arabia a regional economic and technology hub.
Saudi Arabia's Vision 2030 plan aims to transform the economy, improve citizens' lives, and maintain global prominence through ambitious projects like Neom's $1 trillion megacity known as The Line, but the success of the plan is uncertain and could pose challenges in terms of social tensions and regional competition.
Saudi Arabia's Tadawul All Share Index has experienced a significant decline due to poor performance from larger listed companies in sectors such as banking, energy, and materials, while stocks outside of these sectors have boosted the index; however, analysts believe the market to be fundamentally strong and see selloffs as buying opportunities due to transformative reforms and incentives implemented by Saudi Arabia under the Vision 2030 program.
Saudi Arabia, as a new member of the BRICS economic alliance, plans to invest $16 billion from its foreign reserves, signaling a shift towards prioritizing investment over reserves and potentially bolstering the bloc's ongoing initiatives.
Saudi Arabia's tourism revenue tripled in the first quarter of 2023 as the country attracted more visitors and sought to diversify its economy from oil, with a surplus of 22.8 billion Saudi riyals ($9.86 billion) in the balance of payments for the tourism sector and a record number of tourists.
Saudi Arabia is experiencing a thriving fintech sector, with digital payments reaching 62% of the country's target of 70% by the end of 2025, and the number of fintech companies reaching 183, representing 80% of the target set for 2025. The growth of fintech is expected to support institutions, enable small businesses, and contribute to the expansion of the digital economy in Saudi Arabia.
Saudi Arabia plans to invest up to $25 billion in Pakistan over the next few years, focusing on sectors such as mining, agriculture, and information technology, in an effort to increase foreign direct investment and aid Pakistan's economic recovery.
Pakistan's civilian and military leaderships are optimistic that Gulf states, particularly Saudi Arabia, will invest billions of dollars in the country to alleviate its cost-of-living crisis, but doubts remain about the feasibility of these projections and the need for economic reforms and stability.
Analysts predict that Saudi Arabia may face an economic contraction in 2023 due to its decision to extend crude production cuts, highlighting the nation's heavy reliance on oil, while a large dividend from Saudi Aramco may provide some cushion for public finances.
Saudi Arabia is set to increase its crude supplies to China as new refining capacity lifts offtake, aiming to regain lost market share in the country. Meanwhile, China's huge zinc imports have revived hopes for economic growth in the second half of 2023.
Saudi Arabia's membership in the G20 is a reflection of its growing importance in global energy exports, international trade, and financial resources, as well as its impact on the global economy and its commitment to stability and development.
Saudi Arabia is actively seeking to exchange experience with nations worldwide to achieve carbon neutrality by 2060 and ensure sustainable development, with a focus on economic, social, and environmental sustainability.
Saudi Arabia's Crown Prince Mohammed bin Salman believes that the Middle East, including Saudi Arabia, will surpass Europe economically within the next five years.
Saudi Arabia's debt market is set to be reformed in order to help businesses in the Kingdom acquire funding and compete on a global level, according to the chairman of the Capital Markets Authority. The changes will occur gradually to ensure economic stability and support the goals of the Vision 2030 initiative to grow the country's financial sector. The chairman also expressed optimism about the growth of the Saudi Stock Exchange and its record-breaking performance in 2022.
The United States is in regular contact with Saudi Arabia to ensure a stable and affordable supply of energy to global markets, according to National Security Advisor Jake Sullivan. This comes as cuts in oil output by Saudi Arabia and Russia are expected to result in a significant market deficit.
Saudi Arabia's Vision 2030 is driving the transformation of Riyadh into a global destination through the implementation of eight mega-projects, including Sports Boulevard, New Murabba, Qiddiya, and King Salman Park, which aim to create sustainable and innovative urban spaces, promote sports and recreational activities, enhance cultural and heritage sites, and provide entertainment and leisure options for residents and visitors.
Saudi Arabia's gross domestic product (GDP) has surpassed $1 trillion for the first time, achieving its national goal ahead of schedule, with the country's private sector playing a significant role in its economic growth.
Saudi Arabia and India have significantly increased their level of engagement and cooperation, with numerous agreements signed during the recent visit of the Saudi crown prince to India, indicating potential for India to contribute to the Kingdom's Vision 2030 transformation plan and ongoing megaprojects such as NEOM.
The Middle East is undergoing a significant transformation with $1.9 trillion worth of hospitality and residential projects, led by Saudi Arabia, the UAE, and Egypt, aiming to attract 160 million tourists annually by 2030.
Saudi Arabia is investing in AI research and development, aiming to become a global leader in the field and attract $20 billion in investments by 2030 while also training a pool of 20,000 AI and data specialists to future-proof its workforce, according to its National Strategy for Data and Artificial Intelligence. The country's adoption of digitalization and emerging technologies is projected to contribute 2.4% to its GDP by 2030, and it is expected to capture a significant share of AI expansion. Additionally, Saudi Arabia is promoting AI competitions and hackathons to nurture its homegrown talent.
Saudi Arabia's economy is experiencing growth in non-oil sectors, driven by strong domestic demand and increased investment, but sustaining this growth will require ongoing reforms and sound macroeconomic policies.
Saudi Arabia is ramping up its efforts to become a major player in the electric vehicle (EV) industry, with plans to manufacture 500,000 EVs per year by 2030, but the country still faces significant obstacles such as high costs, limited industrial base, and competition from other countries already established in the auto sector.
Saudi Arabia is planning to raise funds from international debt markets to cover a projected budget deficit in 2023-2024 due to lower oil prices and extended oil production cuts, with deficits estimated at $43 billion; however, the country's strong non-oil economy is expected to support growth.
Saudi Arabia's Crown Prince Mohammed bin Salman has announced plans for a conservation area spanning over 30,000 square kilometers in the Makkah, Asir, and Jazan regions, as part of their Green Initiative to protect natural resources and improve the quality of life in the kingdom.