Vedanta lines up $2 billion for fresh copper projects in Saudi Arabia under Kingdom's 'Vision 2030'

Saudi Arabia, as part of its Vision 2030, aims to unlock an estimated $1.3 trillion in mineral resources, taking the minerals sector's GDP contribution from $17 billion to $64 billion by the end of the decade.

Anil Agarwal-controlled Vedanta will aim to invest $2 billion in copper projects in Saudi Arabia to set up a greenfield smelter and refinery, along with production of copper rods, in a major move to collaborate with the Kingdom's Vision 2030 objective.

Vedanta on November 26 signed a Memorandum of Understanding (MoU) with the Kingdom of Saudi Arabia through Vedanta Copper International - one of its subsidiary - to help in the economic diversification and reduce reliance on fossil fuels.

"Our projects will enhance the Kingdom’s self-reliance in the copper supply chain. Saudi Arabia has been a leader in oil exploration and hydrocarbons for decades," Chris Griffith, Chief Executive Officer – Base Metals, Vedanta Limited said, adding that the Kingdom is poised to tap into its "unexplored mineral potential".

As the country diversifies, the Kingdom's copper demand is anticipated to more than double by 2035, from current around 365 KTPA requirement, which is met largely through imports.

The greenfield copper smelter and refinery will have a 400 kilo tonne per annum (KTPA) capacity, and the copper rod project will have a 300 kilo tonne per annum (KTPA) capacity. Both of Vedanta's projects - copper smelter and refinery, as well as the copper rod project - are proposed to be established in Ras Al Khair Industrial City, in KSA.

Both these projects will create thousands of new jobs, generate downstream industries, and contribute around $19 billion to the KSA's GDP, Vedanta said. The copper rod project will commence commercial production by Q4FY26.

Saudi Arabia, as part of its Vision 2030, aims to unlock an estimated $1.3 trillion in mineral resources, taking the minerals sector's GDP contribution from $17 billion to $64 billion by the end of the decade. Senior officials from the Kingdom’s Ministry of Mines and National Industrial Development Centre had visited Vedanta's operations in India, as part of high-level discussions in the run up to the agreement.

As the global economy transitions to sustainable transportation and electrification, the demand for copper is expected to be turbocharged global demand for copper.

Projects with Vedanta are part of nine investment deals, worth more than $9.32 billion, signed by Saudi Arabia with foreign companies including China's Zijin Group. KSA is hoping to attract $100 billion every year as foreign investment, under the Vision 2030 plan.

Saudi Arabia's Vision 2030 - launched in 2016 by King Salman - is a program aimed to diversify the economy and society, being overseen by Crown Prince Mohammed bin Salman. The programme was necessitated by the fall in global oil prices during 2014-15, as well as the rapid green transition in mobility and electrification, putting pressure on the Kingdom economic model. The Vision 2030 project sets out major investments in tourism, renewable energy as well as large-scale construction projects like the NEOM megacity.

Mining has so far been a minor contributor to the Saudi economy, but the Kingdom is now focusing on bauxite, copper, zinc, phosphate, and precious metals and seeking greater investments.