A recent report citing industry experts suggests that Gulf countries could play a crucial role in the United States’ critical minerals strategy, as Washington seeks to counterbalance China’s dominance amid rising trade tensions. Economic and trade relations between the U.S. and the Gulf states are expected to grow under the Trump administration, given his previous term’s strong business ties with the region.
China’s Dominance in Mineral Supply Chains
According to The National, China controls a significant portion of the world’s strategic mineral reserves and dominates their processing and refining. These minerals are essential for a wide range of modern technological and military industries, from smartphones to advanced military equipment.
The report highlights Washington’s efforts to close the global supply gap in minerals, a sector largely monopolized by Beijing. Although the U.S. has access to critical mineral resources both domestically and internationally, it lacks the necessary infrastructure for processing them into industrial materials vital for technology, defense, and other sectors.
Economic Diversification and Investment Opportunities
Industry analysts note that investors in financial hubs like New York and London are often focused on short-term gains, whereas state-backed Chinese firms are willing to adopt a long-term approach, investing in projects that may take years to yield returns.
The report also points out that capital-rich Gulf nations, which are actively diversifying their economies, are well-positioned to play a central role in American-led global investments in minerals.
Patrick Barnes, Vice President of Metals and Mining Consulting at Wood Mackenzie, stated:
“Many Gulf nations and their companies have the ability to plan for the long term in a more strategic manner. This gives them a greater capacity to expand their economic plans.”
He added:
“This creates opportunities for both foreign and Gulf-based companies to collaborate and generate mutual profits. However, the key question remains: which critical minerals will be most valuable for development and export? Not surprisingly, much of this will focus on the energy sector and its related industries.”
A Strategic Role in Supply Chain Resilience
Gracelin Baskaran, Director of the Critical Minerals Security Program at the Center for Strategic and International Studies (CSIS), emphasized that Washington cannot eliminate its dependence on China for critical minerals solely through domestic efforts.
“With the Gulf’s financial resources, political commitment, and rapid advancements, the region must take on a pivotal role in supporting friendly nations to enhance supply chain resilience,” she noted.
Future Deals and Expanding Investments
Meanwhile, Philippe Clegg, Managing Partner at Orion, disclosed that his company is currently in discussions about investments in the region amounting to $1.2 billion, with the potential to exceed this figure.
“These investments will pave the way for a series of additional deals in the region,” Clegg said.
He further indicated that Orion is open to investing in mineral processing and refining facilities in the Gulf and the broader Middle East. However, he stressed that the primary focus would be on mining assets, given the current global supply constraints on critical minerals.
Gulf Mining Ambitions and Strategic Partnerships
The UAE aims to increase the mining sector’s contribution to its non-oil GDP to 5% by 2030 and expand the number of mining companies operating in the country by 10%. Saudi Arabia, on the other hand, holds vast untapped mineral resources estimated at $2.5 trillion, including gold, copper, phosphate, iron ore, and rare metals.
Cyril Widdershoven, an analyst at Strategy International, noted that under Trump’s trade policy, a stronger U.S.-Gulf minerals alliance is likely.
“The Gulf states may also emerge as potential investors in Ukraine’s critical mineral assets, a move that could strengthen their role in the Trump administration’s strategic interests,” he added.
As the geopolitical landscape shifts, Gulf states are positioning themselves as key players in the global mineral supply chain, potentially reshaping trade and investment dynamics in the coming years.
