Antoine Sassine, Chief Investment Strategist at “Crinshers,” stated that minerals have become critically important for the automotive industry. In the past year or two, there was a significant crisis in the automotive industry, especially the electric vehicle sector, due to a substantial increase in mineral prices, primarily driven by the Russia-Ukraine conflict. Sassine added in an interview with “Al Arabiya” that securing supply chains for minerals has become crucial for all countries, including the United States and Saudi Arabia. He explained that most of these minerals are found in China and are also present in many other countries, but they require refining before they can be used. The refining process is primarily carried out in China. He mentioned that lithium and iron ore are found in many places around the world, and the largest nickel mine is located in the United States, in Michigan. However, the refining and purification processes for these minerals, to make them usable in battery production, are somewhat complex, and China has expertise in this area.
It’s worth noting that these minerals are extremely important for countries and have an impact on inflation rates. Therefore, the United States is trying to establish domestic supply chains to ensure a consistent supply of minerals to the electric car industry, particularly to mitigate interruptions that may occur for political reasons. Sassine mentioned that Saudi Arabia is making significant efforts to build a local automotive industry and is establishing a car city in Jeddah. The kingdom has been making substantial efforts for years, including acquiring Lucid Motors and establishing “SIR,” a company for electric cars. Sassine also expects global car companies to announce the establishment of their factories in Saudi Arabia.
He pointed out that the Saudi Ministry of Investment, along with the government as a whole, is making significant efforts to create supply chains in the kingdom to become distributors to the region, India, and possibly Europe due to its strategic location. He emphasized that Saudi Arabia is not only targeting car manufacturing but also supply chains, which are crucial for the automotive industry, as most components and parts come from external suppliers. Sassine stressed the importance of securing battery supplies or manufacturing batteries by providing the necessary minerals. He noted that mineral prices rose significantly due to the sudden increase in electric car sales in 2020, and the global trend towards these cars has been positive, prompting countries to implement policies to support the sector.
Sassine noted that the Russia-Ukraine conflict has indeed affected mineral prices, causing them to rise significantly. Because of this, automotive companies have turned to direct investment in mineral exploration in African mines to secure these minerals primarily. American company Tesla, for example, has applied for licenses to mine and refine lithium. Sassine anticipates a significant increase in demand for minerals in the near future. If 30 million electric cars are sold this year, the goal is to sell 1.2 billion electric cars. This will result in massive demand for minerals and battery manufacturing by 2030 and beyond, potentially extending to 2040.