SFCMarketsandFinanceBandarAlKhorayef

As a major oil-producing country in the Middle East, Saudi Arabia has long been unwilling to tie its economic lifeline solely to oil exports. In recent years, it has been committed to establishing a more diverse and sustainable economic structure. The non-oil exports of Saudi Arabia had a significant increase in July 2024, with a year-on-year surge of 19.04%, reaching approximately $6.76 billion.

The Vision 2030 of Saudi Arabia, introduced in 2016, as a part of the country's grander economic diversification plan, includes the mining industry as the third pillar of national industrialism. During an exclusive interview with SFC journalist, Bandar AlKhorayef, Saudi Arabia's Minister of Industry and Mineral Resources, stated that they want to make sure that mining is also giving back to the society, improving the social life of everybody and to do it responsibly in terms of environment and so on.

In the process of Saudi Arabia's continuous economic diversification and development, China has become an important partner. An increasing number of Chinese companies view Saudi Arabia as a key destination for overseas development.

For the future cooperation between China and Saudi Arabia, Bandar AlKhorayef expressed that China has shown great progress in terms of automation, and introducing new technologies, new innovation. "I think this is a great opportunity. And I believe that more and more technologies would be coming from China and will be very much used in countries like Saudi Arabia."

SFC Markets and Finance: First, we are very interested in the current state of the mining and mineral resources, development in Saudi Arabia. Could you describe it for us?

Bandar AlKhorayef: Thank you also for having me, and it is really a pleasure to be here in Guangzhou, representing my country, Saudi Arabia. As you know, Saudi Arabia is embarking its “Vision 2030”, where we are introducing new sectors to diversify our economy and mining is an important sector where we are focusing. Saudi Arabia is keen on to be a main producer of minerals for the future, and participating in a global need for minerals for the future. So we have started our programs to explore our country and to know more about our reserves. So we have a huge program for geological survey that is covering third of size of the country plus what we are doing in the exploration through private sector and through also government efforts. As a result of all this, we have been able to update the natural reserve of minerals from $1.3 trillion in 2016 to now about $2.5 trillion, almost 90% growth. And we believe there is more also. So Saudi Arabia is rich with the phosphate, with copper, gold, silver, nickel, and also rare earth metals.

SFC Markets and Finance: So you've just mentioned the Saudi Arabia's Vision 2030. Could you give us more details about this vision?

Bandar AlKhorayef: The vision is to diversify our economy, to move from only oil-based economy to more different sectors. That's why we are introducing these new sectors. We are expanding our participation in manufacturing and industries where entering into. We are new sectors like tourism, sports, and so on. And also the vision is focusing on the social aspect of the people how we can develop our people in things like education, culture, and healthcare and so on. So it's a mixture of economic and social (aspects).

Our participation as a ministry, we are focusing on the industry, how can we move from the current status of our manufacturing to applying the new sub-sectors like automotive, renewable, food processing, pharmaceuticals, things also related to our downstream chemicals processing of metals and so on.

SFC Markets and Finance: You've mentioned many fields that are being developed in Saudi Arabia. And I remember you once said that developing mining and mineral resources industries is not for selling raw materials for Saudi Arabia's finance, but to make the mining as the propeller for economic diversification. How do you view the current state of the development of the economic diversification in Saudi Arabia?

Bandar AlKhorayef: We are moving on the right direction. And as you rightly said, as a government, we are keen that the participation of mining. It is not only to take the resource and export it. Now we want to create more added value inside the country. We want to make sure that mining is also giving back to the society, improving the social life of everybody and also want to do it responsibly in terms of environment and so on.

So the current growth that we have seen in the industrial sector is opening up new sectors. So for example, for automotive, Saudi Arabia is the largest importer of cars, which doesn't have manufacturing inside the country. Today we have three factories that are being built to start producing cars for the first time in Saudi Arabia. And we will see this coming into production very soon. So this would be producing around 3,500,000 cars. Of course car manufacturing would mean there has a lot of suppliers and supply chains also that will support this sector.

We have a localization strategy that is also aiming to produce many things inside the country, especially things that are related to our national security like food security or pharmaceuticals or water security or defense is to localize more and more. We in mining, for example, and how we were able to convert mining into finished product and high value product. We have two examples. One is phosphate, where today Saudi Arabia is one of the largest producers of phosphate and fertilizers. So it is also for us an important way to manage and hedge our food security, because we are a major player in the fertilizer business. The second example is aluminium. We have been able to produce aluminium for high grade which is going into automotive, and in packaging and now also we are discussing with several companies to improve our grade to be used for aviation also.

SFC Markets and Finance: The climate change has always been a hot topic for years around the world. So what are some policies or measures that are being implemented in Saudi Arabia for the environmental protection and sustainable development? And how will these policies affect the future development of the mining and mineral resources industry?

Bandar AlKhorayef: Saudi Arabia is very serious about the transition. And this is a subject that already has a plan to do the transition. We are committed to have the energy mix over 50% by 2030, and 0% by 2060.

The entry licensing now for new installations have a lot of emphasis on the ESG, especially in mining and large corporations, we are also incorporating different initiatives to ensure that we are moving in the right pace. So the Middle East Green Initiative, the Saudi Green Initiative (SGI) , which are all moving towards helping the transition to be successfully conducted by the time frame that we have set.

SFC Markets and Finance: You know about the China's Belt and Road Initiative. So how do you see the alignments of the Saudi Arabia’s Vision 2030 with the Belt and Road Initiative?

Bandar AlKhorayef: When we look at Saudi Arabia as a country in terms of location, Saudi Arabia offers a beautiful location that is in the middle of an area that has a lot of trade. So that's where we see the value of Saudi Arabia from a trade point of view.

And then you also should consider the amount of investment we have done as a country in logistics, in ports, in railway, in roads to make the connectivity very strong. And then also you add to this our competitiveness in energy. Saudi Arabia, is a very efficient producer of energy, where we have probably the best cost structure when it comes to energy. And also our people are young. They are educated, and they would contribute to connecting or using Saudi Arabia to connect all regions of the world.

SFC Markets and Finance: How do you evaluate the current state of the new energy sectors? Is the energy transition plan in Saudi Arabia having conflict with the mining industry?

Bandar AlKhorayef: No, it is on the contrary. I think today, Saudi Arabia also in mining. For example, we are trying to focus on producing in green methods. We would like to have most of our production in different metals to be using green energy. We are doing a lot of projects through the Ministry of Energy for renewable. So the latest project that has been awarded in the last 12 months alone showing a very competitive structure of pricing through renewable in solar and wind. So this is not going to be conflicted. It is going to complement. It is going to make Saudi Arabia competitive in the future for being a producer of metals with the green energy.

SFC Markets and Finance: We already know there is a lot of cooperation between Saudi Arabia and China in like solar. So what will be some potential future cooperation in this field?

Bandar AlKhorayef: We are encouraging players in the field of solar panelists, for example, in the field of renewable energy to produce locally so that to our program now for transition is also focusing on localization. We want to have the products being manufactured and delivered to Saudi Arabia from Saudi Arabia.

SFC Markets and Finance: So the boom of the Chinese enterprises seeking business opportunities in the Middle East has continued. What other diverse opportunities will be in the Middle East for Chinese enterprises？

Bandar AlKhorayef: I think this is a great question today. China has shown great progress in terms of automation, in terms of introducing new technologies, new innovation, I think this is a great opportunity. And I believe that more and more technologies would be coming from China will be very much used in countries like Saudi Arabia.

Saudi Arabia has small population, only 37 million. But we have a lot of dreams and ambitions. And for us to do more, we need to invest in technology. So I believe that Chinese companies who are advanced in technology will find a great place to invest in Saudi Arabia, and to bring their technology in Saudi Arabia.

Also, SaudiArabia would be a very good candidateto try new technologies. Now people who are coming up with the new technology,they want to test thetechnology somewhere.So SaudiArabiacould be a great place to test the technology, in the areas where we are very strong like oil and gas or petrochemical or mining, or even in some of the technologies that are needed for water desalination or food processing. So in summary, I think the future is to cooperate in technology and innovation.

SFC Markets and Finance: Do you think that Chinese enterprises going to the Middle East or we can say Saudi Arabia, are they offering more jobs there? are the local governments giving them more convenient policies?

Bandar AlKhorayef: I believe it is a combination of all of these things. When we try to attract investment in Saudi Arabia, of course we want the FDI, want the investment. But most importantly, we want also the know how the technology, the synergy that can be brought between us. For example, raw material that we can use with technology and then do the processing in Saudi Arabia, and then export to other countries. So this is where we look at how can we come with other companies or with other investors stronger. And I believe that Chinese companies can offer these kinds of things.

I think jobs are important, but it's not the most important for us, because our population is not a large population. I think we are looking for technology. We are looking for partners for long term. We are looking for companies, who can utilize our natural resources better and can create quality jobs for our people.

SFC Markets and Finance: So is it your first time here in Guangzhou? So how do you feel about Guangzhou or broadly we can say the Greater Bay Area?

Bandar AlKhorayef: It is my first time in Guangzhou, but I have visited China many times. Guangzhou is a beautiful place. I wish I have more time to spend. So it's a very short visit, but next time I will spend more time. I think it is a great example of how you can mix industrial development with a nice life as a green and livable city. It is also inspiring to see how Guangzhou attracted many entrepreneurs and innovation and technology. So we wish you all the best in Guangzhou.

SFC Markets and Finance: During this visit, do you find any further cooperation can be made between Guangzhou and Saudi Arabia?

Bandar AlKhorayef: Definitely, we met with a lot of private sectors, I think all of the companies we met have showed interests or they already have projects to think about. We have also met with the Chamber of Commerce here and also we have agreed to create a channel of providing Information and knowledge transfer and so on. And also we have met different sites of manufacturing, and we also visited the Free Trade Area here. So it was a great visit, very short but very efficient.

SFC Markets and Finance: So do you think Guangzhou will have more cooperation between Saudi Arabia in terms of digital transformation, or in the field of cars?As you said, Saudi Arabia is trying to develop the automobiles.

Bandar AlKhorayef: No, I think it is more than automobiles. It's more than that. As I said, technology part is very important. There is so many applications that can be utilized. So we will have a team in our ministry working on two strategies that are relevant. One is the program called future factory program. So we are trying to bring companies who offer solutions for automation and advanced manufacturing. And we have another strategy that is focusing on additive manufacturing or 3D printing. We have seen some great companies here who can also help us in growing this market in Saudi Arabia.

SFC Markets and Finance: Since you've been to China for so many times. Could you tell me one story that is very impressive for you in China?

Bandar AlKhorayef: Yes, I can. One of my very interesting visits was traveling from Shanghai to Beijing. Every day we were going to different cities. We stayed, I think 11 or 12 days. So we went by car or train or plane. It was great to see different parts of China.

策划:于晓娜

监制:施诗

制作:李群

新媒体统筹:丁青云 曾婷芳 赖禧 黄达迅

海外运营监制: 黄燕淑

海外运营内容统筹: 黄子豪

海外运营编辑:庄欢 吴婉婕 龙李华 张伟韬

出品:南方财经全媒体集团

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