In a strategic move to diversify their economies and capitalize on the global shift towards electric vehicles (EVs), national oil giants Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) are reportedly exploring the extraction of lithium from brine in their oilfields, according to three sources familiar with the matter.
Lithium, a critical mineral used in battery manufacturing, has become increasingly sought-after as the world moves away from fossil fuels. Saudi Arabia, traditionally reliant on oil revenues, has been investing heavily in transitioning to a hub for EVs, as part of Crown Prince Mohammed bin Salman’s ambitious economic reform agenda.
While details of the direct lithium extraction (DLE) technology remain undisclosed, the move represents a significant departure from the countries’ oil-centric economies. DLE technology, though still in its early stages, offers a more environmentally friendly alternative to traditional lithium extraction methods such as open-pit mining and evaporation ponds.
China currently dominates the lithium processing and consumption market, driven by the demand for electric and hybrid vehicles. However, a slowdown in global vehicle sales has led to a surplus in lithium supply, causing prices to plummet by approximately 80% since November 2022.
Despite the current market conditions, major automakers are actively seeking new lithium sources to meet anticipated future demand. Analysts predict that lithium will remain a key component in EV batteries for years to come, although research into alternative battery technologies continues.
One of the key challenges of extracting lithium from brine is the low concentration levels, which can impact the economic viability of the process. However, sources suggest that Aramco and Adnoc are working on innovative filtration technologies to address this issue.
Saudi Arabia’s significant oil wealth provides it with the financial flexibility to take risks in diversifying its economy. The kingdom has already made strides in establishing itself as an EV hub, with the launch of its own EV brand, Ceer, and the construction of an EV metals plant. Additionally, the Public Investment Fund (PIF) aims to produce 500,000 EVs annually by 2030.
Ma’aden, the Gulf’s largest miner, is also exploring lithium extraction from seawater, further highlighting the region’s commitment to embracing sustainable technologies. Saudi vice minister of industry and mineral resources Khalid bin Saleh Al-Mudaifer praised the progress, noting the promising research and investment in lithium extraction technologies.
As Saudi Arabia and the UAE venture into the lithium market, their efforts could mark a significant step towards economic diversification, positioning them as key players in the global EV revolution.
(Source: Reuters | Startfor | MSN | First Financial Daily)
