Monday, 17 June 2024

FT: Saudi Arabia expands lithium processing to supply BMW‎

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Saudi Arabia is expanding lithium processing operations to supply the German company “BMW” with this basic material for the manufacture of electric car batteries.

“Financial Times” newspaper stated in a report, today, Friday, that Saudi Arabia plans to establish a second facility (factory) to process lithium, as it intensifies its efforts to work with Western partners to develop its battery supply chain.

According to Al-Hurra, the report indicated that the new plant, which will use raw materials extracted from Austria to produce refined lithium hydroxide for BMW, is a sign of how supply chains are slowly developing to process the metal outside China.

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China accounts for nearly 60 percent of global processing of lithium, an important component of electric vehicle batteries. Work is underway in the European Union and the United States to enhance incentives for competition in this field

The new plant is shared equally by the Saudi Obeikan Group and the Australian European Lithium company.

The cost of establishing the plant is estimated at between 350 and 400 million dollars, and it is likely that it will start producing lithium hydroxide in 2026.

European Lithium will supply the processing plant with lithium ore from its mine in southern Austria.

For Saudi Arabia, this project is the latest in a series of deals aimed at strengthening its role in the production of electric cars and the supply chain for batteries, as part of a plan to diversify the economy away from oil.

Earlier this year, Saudi Arabia signed an agreement with the Australian battery manufacturer EV Metals to develop a lithium hydroxide plant, and production is expected to start in 2026.

Saudi Arabia aims to produce 500,000 cars annually by 2030, including those produced by the US-based Lucid Motors, in which its sovereign fund (the Public Investment Fund) holds a majority stake.

It is noteworthy that the Public Investment Fund announced the establishment of the “Sir” company to manufacture electric cars, which plans to produce 170,000 cars annually.

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