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As the United States, European Union, and China intensify their rivalry over lithium, copper, and rare earth supply chains, the Gulf states are emerging as a decisive new force in the global critical minerals race. Saudi Arabia and the United Arab Emirates are leveraging sovereign wealth funds, strategic geography, and decades of hydrocarbon expertise to pivot from oil dependency to mineral resource leverage. This shift, accelerating through 2026, carries profound implications for energy transition timelines, supply chain realignment, and the geopolitics of the post-hydrocarbon era.
The World Economic Forum's Global Risks Report 2026 ranks geoeconomic confrontation as the top global risk, with 50% of respondents expecting a turbulent outlook over the next two years. Against this backdrop, the Gulf states' critical minerals strategy represents a calculated bid to secure strategic autonomy in an increasingly fragmented world.
Saudi Arabia: Vision 2030 Meets the Mining Boom
Saudi Arabia has upgraded its estimated mineral wealth to $2.5 trillion, driven by newly discovered deposits of rare earth elements and battery metals. Under Vision 2030, the Kingdom aims to transform mining into a third pillar of its economy alongside oil and petrochemicals. Vice-Minister of Mining Affairs Khalid bin Saleh Al-Mudaifer has outlined plans to mobilize $100 billion in mining investments by 2035, with the sector potentially contributing $75 billion to GDP by 2030 — a jump of over $50 billion from 2024 levels.
The centerpiece of Saudi Arabia's outward investment strategy is Manara Minerals, a joint venture between the Public Investment Fund (PIF) and national mining champion Ma'aden. Established in 2023, Manara's mandate is to acquire strategic stakes in copper, nickel, lithium, and rare earth assets globally. The company positions itself as a reliable partner for mines seeking offtake agreements and capital, offering an alternative to Chinese-dominated financing channels.
Domestically, the Kingdom has awarded exploration licenses to international players including India's Vedanta and China's Zijin Mining. Saudi Arabia is also negotiating with four specialized firms — MP Materials, Shenghe Resources, Lynas Rare Earths, and Neo Performance Materials — to build domestic rare earth processing and magnet manufacturing capabilities. A U.S.-Saudi Strategic Framework for Cooperation, backed by the U.S. Department of Defense financing a 49% equity stake in a new rare earths refinery, underscores the geopolitical significance of these efforts.
The UAE: Sovereign Funds as Global Intermediaries
The United Arab Emirates has adopted a complementary but distinct approach, deploying its sovereign wealth funds as global investment intermediaries. Abu Dhabi's ADQ partnered with the U.S. International Development Finance Corporation (DFC) and Orion Resource Partners to launch the $1.8 billion Orion Critical Mineral Consortium (Orion CMC) in October 2025. ADQ contributed $600 million, matching U.S. government and private sector commitments, with plans to expand the fund to $5 billion. The consortium targets lithium, rare earths, and other essential minerals within DFC-eligible markets, focusing on renewable energy, digital infrastructure, and semiconductor production.
Mubadala Investment, another Abu Dhabi sovereign fund, joined a Pax Silica-linked investment consortium in March 2026 to enhance supply chain resilience for energy and critical minerals. The U.S. kickstarted the initiative with a $250 million commitment, with Mubadala's contribution undisclosed. The UAE critical minerals investment strategy also includes a $1.2 billion joint venture with Orion Resource Partners established earlier in 2025, targeting copper and high-grade iron ore from emerging markets across Africa, Asia, and Latin America.
Geopolitical Implications: Reshaping the Resource Map
The Gulf states' entry into critical minerals is fundamentally altering the global resource landscape. According to the International Institute for Strategic Studies (IISS), Gulf countries are leveraging their financial capital, geographic location, and existing trade networks to compete with established players like China while presenting themselves as credible partners to Western markets. The Overseas Development Institute (ODI) notes that four dynamics will define the 2026 race for mineral supply chains: US project finance, EU strategic autonomy, China's 15th Five-Year Plan, and the rise of new intermediary powers — among which the Gulf states are the most significant.
This pivot carries risks. Saudi Arabia and the UAE must navigate the delicate balance between deepening ties with China — their largest oil customer — and aligning with Western efforts to de-risk from Beijing. The geopolitics of Gulf critical minerals will test whether these states can maintain their traditional role as neutral energy suppliers while becoming active players in resource competition.
Expert Perspectives
"The Gulf states are not simply diversifying their economies; they are repositioning themselves as essential nodes in the global energy transition supply chain," said Asna Wajid, a researcher at the IISS. "Their ability to combine patient capital, strategic geography, and diplomatic agility gives them a unique advantage in a market defined by long lead times and geopolitical uncertainty."
Cauvery Ganapathy of the ORF Middle East notes that Saudi Arabia must distinguish its approach from resource weaponization models. "Riyadh is positioning itself as a reliable, geopolitically neutral hub for critical mineral processing — a stark contrast to the weaponization of supply chains we have seen from other actors."
FAQ
What are critical minerals?
Critical minerals are raw materials essential for green energy technologies, electronics, and defense applications. They include lithium, cobalt, nickel, copper, and rare earth elements used in electric vehicle batteries, wind turbines, semiconductors, and military systems.
Why are Gulf states investing in critical minerals?
Gulf states are diversifying their economies beyond oil and gas, securing supply chains for future industries, and leveraging their financial capital to gain strategic influence in the global energy transition. The shift also hedges against declining long-term oil demand.
How much are Saudi Arabia and the UAE investing?
Saudi Arabia aims to mobilize $100 billion in mining investments by 2035, with Manara Minerals leading global acquisitions. The UAE has committed at least $3 billion through ADQ and Mubadala partnerships, with funds expected to grow to $5 billion or more.
What is Manara Minerals?
Manara Minerals is a joint venture between Saudi Arabia's PIF and Ma'aden, established in 2023 to invest in mining assets globally. It focuses on copper, nickel, lithium, and rare earth elements, securing offtake agreements and long-term supply for Saudi industry.
How does this affect China's dominance?
China currently controls over 60% of rare earth mining and 90% of processing. Gulf investments in African, Latin American, and domestic processing capacity could reduce this dominance, offering Western allies alternative supply sources and processing hubs.
Conclusion: A New Axis in the Resource Race
As the WEF's 2026 Global Risks Report warns of intensifying geoeconomic confrontation, the Gulf states' critical minerals pivot represents one of the most significant realignments in global resource strategy. By combining sovereign wealth, strategic positioning, and diplomatic flexibility, Saudi Arabia and the UAE are not merely participating in the energy transition — they are actively reshaping the map of who controls the minerals that will power the 21st century. The success of this strategy will depend on their ability to balance competing great-power relationships, build domestic processing capacity, and avoid the resource curse that has plagued other mineral-rich nations.
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