Talks to recruit soccer superstar Kylian Mbappé may have fallen flat, but at least Saudi Arabia's foray into golf, gaming, and now, critical minerals mining is taking off.
What happened: Saudi Arabia’s sovereign wealth fund, the PIF, and state-owned mining company Ma’aden struck a US$2.6 billion deal with Brazilian mining giant Vale for a 10% stake in its base metals business—one of the world’s top suppliers of copper and nickel.
- This deal is Saudi Arabia’s first big move since announcing the launch of a new mining investment fund that aims to help diversify its mega-wealth away from oil.
Why it matters: While plenty of countries want in on the critical minerals rush, the kingdom has pockets deeper than the ocean floor and isn’t afraid to spend big to upend industries—as we saw in June when it basically acquired all of pro golf.
Plus: As Western miners feel political pressure to turn away from China, a key buyer and funder of critical minerals, Saudi Arabia could position itself to fill that gap.
In Canada: Last year, the feds implemented a policy restricting investments by foreign state-owned enterprises in Canada’s critical minerals sector, a move primarily against increased investments from Chinese state-owned enterprises.
What’s next: Since Vale operates Canada’s largest nickel mine, the Saudi deal will be subject to scrutiny under the policy. However, Vale’s CEO doesn’t foresee any problems due to Canada’s restoration of diplomatic ties with Saudi Arabia.—QH