Saudi Arabia is open to partnering with South Korea in joint mine investments in third countries to help Seoul strengthen its supply chain resilience involving rare earth minerals, a senior Riyadh official said Thursday.
In an interview with Yonhap News Agency held in Seoul, Bandar Alkhorayef, Saudi minister of industry and mineral resources, also stressed that his country would be a "great partner" in bilateral mineral cooperation, as the country has yet to explore its untapped mineral resource reserve.
Alkhorayef was on a six-day trip to South Korea, marking his first official visit here, to seek business partnerships with Korean companies across a wide array of sectors. The minister plans to meet with his Seoul counterpart, Bang Moon-kyu, on Friday.
He highlighted the possibility of South Korea partnering with Manara Minerals, a joint venture fund established this year between Saudi Arabia's state-owned miner Ma'aden and Public Investment Fund (PIF), the country's public wealth fund, for investment cooperation involving overseas mines.
"We are opening up (Manara) to partner with different countries. South Korea could be interested to partner with this company to invest in different mines around the globe to also make sure that the minerals that are in need are satisfied," the minister said.
He stressed that South Korea was one of the largest industrial countries in the world and foresaw continued demand for minerals and metals within the country's private sector.
The minister also stated that Saudi Arabia is estimated to possess around US$1.3 trillion worth of mineral resources, such as phosphate, copper, zinc and gold, based on the government's geological survey program that covers one-third the size of the country.
He said only around 18 percent of Saudi Arabia's mineral resources are estimated to have been explored.
Alkhorayef's comments came as South Korea's industry ministry this week announced a plan to reduce the country's dependency on specific countries for 185 items, including graphite and rare earth magnets, to under 50 percent by 2030, compared with the current estimate of 70 percent.
South Korea depends on China for 94.4 percent of its natural graphite demand.
Regarding supply chain disruptions due to geopolitics and intensifying competition among global powers to acquire key resources, Alkhorayef underscored the need for the "global community to cooperate with each other."
"What we have seen in the disruption over COVID-19 and also the war between Russia and Ukraine is just a demonstration of how fragile the global supply chain has been built."
In October, South Korean President Yoon Suk Yeol made a state visit to Saudi Arabia and held a summit with Saudi Crown Prince Mohammed bin Salman.
The two countries' companies and institutions then signed 51 deals and memorandums of understanding worth a total of $15.6 billion, raising hopes for a second Middle Eastern boom for South Korean businesses since the first one in the 1970s-80s.
Alkhorayef said he initially envisioned making a two-day trip here but ended up extending it to six days to reach out to more South Korean companies.
He has met with representatives of key industry players, such as Hyundai Motor Group and Korea Aerospace Industries, and also reportedly plans to meet with executives from the defense equipment and battery materials industries as well.
In October, Hyundai signed a joint venture deal with PIF to build its first Middle Eastern car assembly plant in Saudi Arabia's King Abdullah Economic City. The minister said his government was working to develop supplier bases for automobile manufacturing in the country.
In the area of the defense industry, Alkhorayef expressed hope for South Korean firms to help Saudi Arabia build up its domestic defense equipment production capabilities. He promised to offer support in terms of financing, licensing and land allocation involving defense industry spending in the country.
The Saudi government currently has a mandate to localize 50 percent of its defense spending by 2030.
"We see a lot of interest from Korean companies to work with Saudi companies and different ministries, like the Ministry of Defense, to develop the localization of military equipment production," the minister said.
South Korean defense equipment makers are in search of new customers in the Middle East amid renewed security concerns in the wake of the Israel-Hamas conflict.
Following LIG Nex1's sales of a surface-to-air missile system, called Cheongung II, to the United Arab Emirates in 2021, the Korean firm has reportedly been in the final rounds of negotiations with Saudi Arabia for a big supply deal for the air defense system.
On Saudi Arabia's successful bid to host the 2030 World Expo in Riyadh, Alkhorayef welcomed South Korean businesses and people to participate in and visit the international fair to be held in the Saudi capital.
Last month, Riyadh beat South Korea's southeastern port city of Busan and Rome of Italy in a vote held in Paris by member states of the Bureau International des Expositions.
"We would like to also have more Korean people come and visit just to see the country, to understand Saudi Arabia and to build bridges between the different societies, communities and people."