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Ma'aden aims to select at least one partner by June

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Plans magnet facility inside the kingdom

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Goal to finish study on how to mine and process by

December

By Ernest Scheyder, Clara Denina, Pesha Magid

April 8 (Reuters) -

Saudi Arabia's flagship mining company Ma'aden is

considering choosing at least one of four foreign firms to form

a rare earths processing partnership, three sources with

knowledge of the matter said, as the kingdom bids to become a

global critical minerals hub.

Ma'aden is weighing a partnership with U.S.-based MP

Materials ( MP ), China's Shenghe Resources,

Australia's Lynas Rare Earths ( LYSCF ) or Canada's Neo

Performance Materials ( NOPMF ), the sources said.

Ma'aden plans to choose at least one partner by the end of

June to help develop plans for a rare earths processing facility

and eventually a magnet facility inside the kingdom, according

to the sources, who were not authorized to discuss the

deliberations publicly.

The selection process, details of which have not previously been

reported, underscores how minerals processing is fast becoming a

necessity for tech-focused economies looking to produce their

own building blocks for artificial intelligence, electric

vehicles and other sectors.

Saudi's growing mining industry is a key pillar in de-facto

ruler Crown Prince Mohammed Bin Salman's Vision 2030 program to

diversify the economy beyond oil.

The country, and the mining companies controlled by it, are

eyeing projects to mine and process several minerals, including

lithium, copper, zinc and rare earths, which are used to make

magnets that turn electricity into motion for EVs, cell phones

and other devices.

Ma'aden and MP declined to comment. Shenghe and Neo did not

respond to requests for comment.

Lynas said it is focused on rare earths processing projects in

Australia, Malaysia and the United States, and that it

"regularly holds discussions with emerging rare earths companies

around the world."

Once chosen, the partner and Ma'aden will study how best to mine

and process Saudi Arabia's vast reserves of the minerals, a

timeline expected to be finished by this December, one of the

sources said.

Of the four companies under consideration, Shenghe and Neo

have the most experience with rare earths processing and magnet

production, although MP has been working to boost both inside

the United States. Lynas processes rare earths in Malaysia and

is building a refinery in Texas.

The standard process to refine rare earths can be dirty,

expensive and time-consuming, fueling a push by scientists for

better methods. Rare earths processors must contend with 17

metals, depending on a deposit's geology, each of which is

nearly the same size and atomic weight, making separation

complex.

Those rare earths must be teased out in a specific order, a

logistical challenge that would prevent Ma'aden and any future

partner from cherry-picking specific elements they may want.

MP, which supplies Shenghe with rare earths from its

California mine for processing inside China, invested in a

Vietnamese rare earths processing facility with Shenghe in 2023.

Both companies said earlier this year they planned to unwind

that partnership.

CHINA'S UPPER HAND

China started rapidly expanding in the industry during the

1980s and now controls nearly 90% of global rare earths refining

capacity, according to the International Energy Agency.

Geologists with the state-controlled China Geological Survey

have been mapping out Saudi Arabia's mineral reserves since

2023.

China's prowess in the minerals sector has helped propel the

country's economy to the second-largest in the world, a reality

that the U.S. and others have acknowledged and are working to

break, especially after Beijing banned the export of rare earths

processing technology in 2023.

Last week, Beijing placed export restrictions on rare earths,

magnets and other finished products.

U.S. President Donald Trump last month invoked wartime powers to

in part boost American metals refining.

Saudi officials last year nearly doubled their estimate for

the kingdom's minerals reserves to $2.5 trillion, an increase

largely due to the addition of rare earths.

Riyadh aims to have those rare earths processed into a form

that can be used to make electronics inside the kingdom and does

not want the supply chain to be exported elsewhere, according to

one of the sources.

BROAD INVESTMENTS

The move is only one part of Riyadh's latest push into the

minerals supply chain. The Global Supply Chain Resilience

Initiative, a government program under the Saudi government's

National Investment Strategy, last November said it would invest

35 billion riyals ($9.32 billion) in copper smelters and

refineries from India's Vedanta and a zinc smelter

from China's Zijin.

The Saudi government's sovereign wealth fund is the largest

shareholder in California-based EV manufacturer Lucid,

which in 2023 opened its first plant outside the U.S. in Saudi

Arabia.

Australia's Hastings Technology Metals ( HSRMF ) has also signed

a nonbinding memorandum of understanding with the National

Investment Strategy for a potential rare earths facility. U.S.

firm Critical Metals signed a nonbinding MOU last year

to explore the construction of a lithium refinery in Saudi

Arabia with Riyadh-based Obeikan Group.

Ma'aden, which is controlled by the Saudi wealth fund, said last

May it had successfully extracted lithium from seawater and was

working to make the process commercially viable.