State-owned Saudi mining company Ma’aden and US-based Ivanhoe Electric have signed an deal to investigate 48,500 sq km of under-explored lands in the Arabian Shield for critical minerals that are key to powering the global energy transition.

Surveys could begin as soon as September in the new joint venture, which is worth nearly $130 million, reports AGBI.

The Saudi region – roughly the size of Switzerland – is understood to be rich potential for critical minerals such as copper, nickel, gold, silver and possibly lithium.

The kingdom is considering development of a large-scale copper smelter, plus smelters or refineries for silicon, aluminium and nickel.

Experts believe that while Saudi Arabia has enough mined copper to justify smelting facilities, the prospects for critical mineral refining projects that would rely on imported material are less certain.

The International Energy Agency (IEA) said the market for minerals that help power electric vehicles, wind turbines, solar panels and other technologies key to the clean energy transition has doubled in size over the past five years.

From 2017 to 2022, demand for lithium has trebled, while cobalt (70 per cent) and nickel (40 per cent) have also gained. The market for energy transition minerals reached $320 billion in 2022.

Saudi Arabia sees mining as central to its Vision 2030 strategy to diversify its economy outside of fossil fuels. The Kingdom values its mineral wealth at more than $1.3 trillion.