Saudi Arabia Expands Ties with Brazil and Chile

Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Ibrahim Alkhorayef and Vice Minister for Mining Affairs Khalid Saleh Al-Mudaifer are leading a high-level economic mission to Brazil and Chile from July 22-30, 2024, aimed at strengthening bilateral ties and attracting investments into the Kingdom’s mining and industrial sectors. The visit, announced by the Ministry of Industry and Mineral Resources, aligns with Saudi Arabia’s Vision 2030 goals to diversify the economy and establish the Kingdom as a global industrial and economic powerhouse. The delegation will visit major cities in Brazil, including São Paulo, Brasília, and Rio de Janeiro, as well as Santiago, Chile, to engage in strategic meetings with government officials and industry leaders.

Context and Background

Saudi Arabia has long recognized the importance of international partnerships in achieving its economic diversification objectives. Brazil and Chile, both renowned for their vast mineral resources, present significant opportunities for collaboration. Brazil shares a bilateral relationship with Saudi Arabia spanning over 50 years, primarily based on energy products, minerals, agricultural products, and fertilizers. Chile, on the other hand, is the world’s second-largest producer of lithium, a critical mineral for electric vehicle (EV) batteries, aligning with the Kingdom’s ambitions to expand EV production. This mission underscores Saudi Arabia’s proactive approach to securing strategic resources and fostering mutually beneficial investment opportunities.

Key Details

During the visit, the delegation will hold high-level meetings with senior government officials and leading global companies in mining, food processing, aviation, and other strategic industrial sectors. In Brazil, key meetings include the Brazilian Mining Association (IBRAM), Vale, Minerva Foods, JBS, and BRF SA, a major global producer of fresh and frozen protein foods. In Chile, Minister Alkhorayef will meet with his counterpart, the Minister of Mining, as well as leaders from The Federation of Chilean Industry (SOFOFA), mining giants Codelco, Antofagasta, and other ministries and companies. Saudi Arabia already holds several active foreign direct investment portfolios in Brazil, including a recent 10% stake in Vale Base Metals through Manara Minerals, a joint venture between the Public Investment Fund (PIF) and Ma’aden. Additionally, the Saudi Agricultural and Livestock Investment Co. (SALIC) has acquired 180 million equity shares in BRF, representing 10.7% of the company’s outstanding shares, valued at SAR 1.27 billion.

Implications and Impact

This mission is expected to culminate in the signing of key agreements that will enhance bilateral relations, focusing on mutual growth through shared investments, sustainable development, and economic diversification. The collaboration in lithium extraction and renewable energy technologies, such as solar and wind, is particularly significant as Saudi Arabia seeks to expand its EV manufacturing capabilities. The visit also highlights the Kingdom’s commitment to leveraging its rich geological endowment, offering 80 years of accessible geological data and recent mapping of the Arabian Shield that increased the estimated value of Saudi Arabia’s mineral reserves from $1.3 trillion to $2.5 trillion. With the revamped Mining Investment Law in 2019 and initiatives like the Exploration Enablement Program (EEP) with a $182 million allocation, Saudi Arabia has become a top mining jurisdiction, as recognized by the Mining Journal World Risk Report 2023.

Vision 2030 Alignment

This economic mission to Brazil and Chile is a testament to Saudi Arabia’s unwavering commitment to Vision 2030, which seeks to transform the Kingdom into a diversified and sustainable economy. By forging strong international partnerships and attracting foreign investments in mining and industry, Saudi Arabia is not only securing critical resources but also positioning itself as a global leader in these sectors. The visit aligns with the Kingdom’s strategic priorities, including economic diversification, technological advancement, and sustainable development, further solidifying its role as a pivotal player on the world stage.

20 Questions

Q1. Who is leading the Saudi economic mission to Brazil and Chile?

A1. The mission is led by Minister of Industry and Mineral Resources Bandar Ibrahim Alkhorayef and Vice Minister for Mining Affairs Khalid Saleh Al-Mudaifer.

Q2. What is the purpose of the visit?

A2. The visit aims to strengthen bilateral ties, attract investments into Saudi Arabia, and explore mutually beneficial opportunities in the mineral and industrial sectors.

Q3. When will the delegation visit Brazil and Chile?

A3. The delegation will visit from July 22-30, 2024.

Q4. Which cities will the delegation visit in Brazil?

A4. The delegation will visit São Paulo, Brasília, and Rio de Janeiro.

Q5. Which city will the delegation visit in Chile?

A5. The delegation will visit Santiago.

Q6. What Saudi Vision 2030 goals does this visit align with?

A6. It aligns with goals to diversify the economy and turn the Kingdom into an industrial and economic powerhouse.

Q7. What companies will the delegation meet in Brazil?

A7. They will meet with IBRAM, Vale, Minerva Foods, JBS, and BRF SA, among others.

Q8. What organizations will the delegation meet in Chile?

A8. They will meet with SOFOFA, Codelco, Antofagasta, and other ministries and companies.

Q9. What existing Saudi investments are in Brazil?

A9. Saudi Arabia holds a 10% stake in Vale Base Metals via Manara Minerals and 10.7% of BRF shares through SALIC.

Q10. Why is Chile important to Saudi Arabia’s EV ambitions?

A10. Chile is the second-largest lithium producer, a key mineral for EV batteries, aligning with Saudi Arabia’s EV expansion plans.

Q11. What is the value of SALIC’s acquisition of BRF shares?

A11. The acquisition is valued at SAR 1.27 billion, representing 10.7% of BRF’s outstanding shares.

Q12. What is the estimated value of Saudi Arabia’s mineral reserves?

A12. Recent mapping increased the estimated value from $1.3 trillion to $2.5 trillion.

Q13. What initiatives has Saudi Arabia introduced to attract mining investors?

A13. Initiatives include the revamped Mining Investment Law in 2019 and the Exploration Enablement Program (EEP) with $182 million allocated.

Q14. How does the Mining Journal World Risk Report 2023 rank Saudi Arabia?

A14. It ranks Saudi Arabia as a standout, best-performing mining jurisdiction, second-highest globally in the Permitting Index.

Q15. What incentives does Saudi Arabia offer in the mining sector?

A15. Incentives include 75% co-funding for CAPEX, a five-year royalty fee exemption, and a 20% corporate tax rate.

Q16. What is the significance of Saudi Arabia’s youthful demography?

A16. With two-thirds of the population under 35, it offers a vibrant workforce and growth potential in emerging sectors.

Q17. What areas of collaboration are expected between Saudi Arabia and Chile?

A17. Collaboration is expected in lithium extraction, solar and wind energy, and knowledge exchange in mining technologies.

Q18. What is Almar Water Solutions’ interest in Chile?

A18. Almar Water Solutions seeks to partner with Codelco on its Maricunga lithium project, leveraging water treatment technologies.

Q19. How long has Saudi Arabia and Brazil’s bilateral relationship lasted?

A19. The relationship spans over 50 years, based on energy, minerals, agricultural products, and fertilizers.

Q20. What agreements are anticipated from this visit?

A20. Key agreements focusing on shared investments, sustainable development, and economic diversification in mining and industry are anticipated.

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