Saudi Arabia is quietly making one of its most strategic economic moves yet, shifting from simply owning mineral resources to shaping how some of the world’s most sensitive materials are processed and priced.
This is the core message of a recent analysis by Saudi executive Mohammed H. Al Qahtani, who argues that the Kingdom is repositioning itself at the heart of the global rare earths supply chain.
A New Rare Earths Hub in the Kingdom
At the center of this shift is a new joint venture between Saudi Arabia’s mining champion Ma’aden and United States based MP Materials, supported by a broader US–Saudi minerals framework signed during Crown Prince Mohammed bin Salman’s recent visit to Washington.
The deal will create a rare earth separation and processing facility inside the Kingdom in a segment that has long been dominated by China, which still controls a large share of global rare earth refining capacity.
According to Ma’aden and MP Materials, the facility is being designed as a central hub for processing, refining, and separating rare earth elements to produce both light and heavy rare earth oxides for use in sectors ranging from defense to electric vehicles and wind turbines. The refinery is expected to draw on Saudi Arabia’s own untapped deposits as well as feedstock from partner countries, and its output is intended to serve industrial and defense supply chains in Saudi Arabia, the United States, and allied markets.
The joint venture builds on an architecture that has been under development for several years. Earlier in 2025, Ma’aden and MP Materials signed a memorandum of understanding in Riyadh to explore a fully integrated rare earth value chain inside the Kingdom, covering mining, separation, refining, and magnet manufacturing.
The latest agreement moves that vision closer to execution and is reinforced by a strategic framework between Washington and Riyadh on securing uranium, metals, permanent magnets, and other critical minerals.
Mining As A Third Economic Pillar
For Saudi Arabia, the rare earths push is part of a wider mining and industrial strategy rather than a stand alone industrial project.
Riyadh has nearly doubled its official estimate of mineral resources to about 2.5 trillion dollars in value, with significant potential linked to rare earths and other critical minerals. Mining has been elevated as a third pillar of the economy under Vision 2030, alongside oil and petrochemicals, with plans to invest heavily in downstream processing, smelting, and mineral based value chains.
Al Qahtani’s commentary also highlights an important principle behind the new approach. Saudi Arabia is moving away from large scale extraction without local processing.
Instead of remaining in the traditional role of raw material supplier, the Kingdom is using its leverage in the form of mineral potential, political stability, competitive energy, and its position between Africa and Asia to ensure that more value adding steps take place on its own territory. In practice, that means Saudi Arabia is not merely offering ore. It is offering a stable platform for refining, magnet production, and eventually advanced manufacturing.
Shared Interests With The United States
The US–Saudi mineral partnership reflects a clear alignment of interests. Washington is looking to reduce its dependence on Chinese refining, while Riyadh wants technology transfer, investment, and long term offtake agreements that support domestic industry development.
Saudi Arabia’s geographic position adds to its appeal, since it sits close to several African countries that are attracting heavy rare earth exploration investment and can act as a natural hub to receive, refine, and re export material.
These developments have direct implications for sectors that Saudi Arabia and its partners view as strategically sensitive. Permanent magnets that incorporate rare earth elements such as neodymium and dysprosium are central to electric vehicle drivetrains, hybrid motors, wind turbines, and a wide range of defense systems.
By building refining and magnet supply capacity in Saudi Arabia, the Ma’aden and MP Materials venture and the wider US-Saudi framework are designed to support both countries’ defense and clean energy industries with alternative and politically aligned sources of critical inputs.
From a market perspective, the joint venture has already produced visible signals. MP Materials’ shares rose following the announcement of the Saudi refinery deal, as investors responded to the company’s expanded role in diversifying rare earth supply chains through a partnership with a G20 economy.
For Saudi Arabia, the main value lies less in short term price movements and more in long term pricing power and industrial depth. By hosting a significant share of future processing, the Kingdom gains influence over how and where value is captured along the rare earth chain.
What Comes Next
For now, the refinery remains in the development phase. Key milestones to watch include final site selection within the Kingdom, the size of initial capacity, the timeline to first production, and whether the partnership quickly extends into magnet manufacturing and component integration. At the policy level, Saudi Arabia is expected to continue aligning mining licensing, infrastructure, and financing tools to support more projects that combine extraction with advanced processing inside the country.
If this strategy succeeds, as Al Qahtani suggests, Saudi Arabia will not simply be another supplier in a crowded field of mineral exporters. It will become a place where rare earths are discovered, refined, priced, and transformed into the hardware that powers everything from future cars to next generation defense systems. In that sense, the Kingdom’s rare earths move is less about opening new mines and more about reshaping where in the world the real value of those mines is ultimately created.
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