U.S.-Saudi Cooperation Could Fortify Critical Mineral Supply Chains.

President Trump returned to office facing a weakened defense industrial base, strained by the Ukraine war and threatened by China’s grip on critical inputs. Dependence on competitors like China for materials that power essential commercial and military technologies — such as electric batteries, drones, and specialized alloys — is an acute weakness for American manufacturing. With two impositions of 10% tariffs on all Chinese imports, President Trump has taken multiple steps towards decreasing the United States’ reliance on Chinese imports. China’s Ministry of Commerce responded with mineral export bans, which could expand soon.

Trump’s China policy is a part of his larger domestic reindustrialization efforts. In a number of areas, this strategy could prove to be successful. But to fortify America’s critical mineral supply chains, the Trump administration will need to work with allies abroad. Saudi Arabia is especially well-situated to work with America to jointly secure mineral access and finance new processors. This is a relationship that President Trump will be uniquely positioned to capitalize on, given the strong bilateral ties that characterized his first term. In the first weeks of his administration, President Trump’s Middle East policy appears focused on commercial development and collaboration — especially with Saudi Arabia.

Saudi Arabia is positioning itself to become a key player in global mineral supply. Its untapped mineral resources were recently estimated at $2.5 trillion, although the bulk of the deposits are in gold, phosphate, copper, and zinc. Abroad, the kingdom’s critical mineral investments in recent years have increased in scale and frequency. Shortly before President Trump took office, the kingdom unveiled $100 billion in mining commitments.

Cooperation with the United States to reroute mineral supply chains would advance Saudi Arabia’s economic diversification plan known as Saudi Vision 2030. Seeking to reduce reliance on oil exports, the kingdom aims to grow its advanced manufacturing capabilities, among other economic developments. Critical mineral security is a Saudi vulnerability too; their burgeoning industrial sector would be highly reliant on foreign supplies of raw inputs, a fact that’s clear to Saudi leaders. Similarly, if America faces difficulty securing the raw materials necessary to supply its defense industrial base, Saudi Arabia, which imports 80 percent of its weapons from the United States, faces an even greater threat.

Any collaboration with the United States should aim to leverage each country’s unique advantages and needs. This could come in two forms: joint purchases of mineral deposits abroad and the establishment of new mineral refineries in Saudi Arabia.

U.S.-Saudi joint financing is not a new idea, but the Trump administration has the opportunity to turn existing talks into action. According to reporting in September by the Wall Street Journal, the U.S. and Saudi Arabia were in talks to cooperatively finance mineral procurement. The potential arrangement would make use of Saudi Arabia’s wider latitude to invest in countries with problematic business environments while still allowing the U.S. to exert greater control over its critical supply chains. 

But in the past, American companies have largely ceded bidding to Chinese investors. In 2016 and 2020, American mining company Freeport-McMoRan Inc. sold two major cobalt mining sites in the Democratic Republic of Congo to China Molybdenum Company Limited. For both sales, the only competitive bids came from Chinese companies. A joint U.S.-Saudi venture would disrupt China's near-monopoly over the bidding process for critical mineral sites.

Cooperation with Saudi Arabia could be mutually  beneficial if it leads to greater mineral refining capabilities in the kingdom. While establishing new mineral refineries would incur substantial upfront costs, there are several reasons to believe that Saudi Arabia has a comparative advantage here. Because of its extensive oil production, costs of the energy-intensive process of mineral refining would likely be uniquely low. 

Beyond this, the kingdom’s leaders have demonstrated a willingness to make substantial long-term investments as part of their diversification strategy. Swings in the prices of lithium, cobalt, copper, and graphite have threatened the operations of some American producers and stopped others. By cooperating with Saudi Arabia to establish new mineral refineries in the kingdom, America could benefit greatly from the Saudis’ long-term economic planning. 

Saudi Arabia is also strategically positioned to receive raw materials from Africa, where Manara Minerals aims to invest $15 billion more in mineral assets globally in the coming years. Transport to Saudi Arabia, likely by the Persian Gulf or Red Sea, could be faster and cheaper than sending a ship to China through the Strait of Malacca. 

Both countries can capitalize off of this growing mineral security alignment. Joint financing of mineral access and investment in refineries would strengthen America’s defense industrial base while creating a new center of gravity for critical minerals on the Arabian Peninsula. 

 Farrell Gregory is chief editor at the Oxford Emerging Threats Journal and a research assistant at the Yorktown Institute. He is currently a visiting student at Mansfield College, Oxford, studying politics, philosophy, and economics. You read more of his work @efarrellgregory on Twitter.