How the UAE has made a global mining power grab

• Expanding trade deals
• Supply chain investment
• Overseas expansion

Embracing copper from Peru, lithium from Zimbabwe, tantalum from Kenya and bauxite from Pakistan, the UAE’s mining interests nowadays span three continents.

Trade deals with Australia and New Zealand agreed in September may also soon see those interests Down Under.

Certainly, Australia’s minister for trade and tourism, Don Farell, hopes so.

“The negotiated package,” he wrote in a September 17 statement on the deal, which has been finalised but not signed, will include investment into “sectors of the Australian economy that underpin our energy transition, such as critical minerals”.

Australia is home to some of the largest critical minerals deposits on earth, and is “a great investment target,” Johnny Lazar, principal consultant Middle East for CRU, tells AGBI.

“It’s one of the focus regions for many metals critical to energy transition, particularly lithium, but also nickel, manganese and others.”  

These sectors have long been seeking expansion, yet, “Australia simply doesn’t have the domestic capital available to develop its mining and energy projects further,” Jason Needham, principal consultant with CRU’s Australia/New Zealand team, says. “So it must seek investment from abroad.”

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If Emirati money does start to flow, the UAE’s overseas mineral investments will then add up to a mining supply chain on which the sun never sets.

And that is the whole point.

“Many Gulf economies saw the crucial importance of investing in their supply chains when the Covid-19 pandemic happened,” Bhavika Metha, deputy head of research at Century Financial in Dubai says. Faced with global disruption, “they realised they couldn’t depend on single sources”.

An uninterrupted, 24/7 supply chain of critical resources is the goal – and a circumnavigation of the globe the result.

Building the network

Among the Gulf states, the UAE has been leading the way with this strategy for some time – initially driven by the need to secure supplies for its extensive aluminium and steel sectors.

Now though, a far wider range of critical minerals is in the UAE’s reach, as the country seeks to diversify its industries. 

In July 2023 the Emirati government signed a $1.9 billion deal with Democratic Republic of the Congo (DRC) state miner Sakima to develop “more than four industrial mines” in the country, according to a DRC government statement. 

Sakima has concessions in tin, tantalum, tungsten and gold.

In December 2023 the UAE’s International Resources Holdings (IRH) signed a $1.1 billion agreement to secure a 51 percent stake in Zambia’s Mopani Copper Mines.

In May 2024 too, IRH announced joint venture agreements to mine in Angola, along with advanced stage discussions in Burundi, Tanzania and Kenya to extract a range of critical minerals.

Then, soon after the Australian and New Zealand Comprehensive Economic Partnership deals, the UAE announced a Cepa with Jordan.

“Jordan has cost-competitive world-class assets, producing phosphate rock and potash,” Lazar says.

“In turn, the UAE, through Adnoc, has huge potential to expand its world-class nitrogen and sulphur facilities.”

Jordanian raw materials and UAE capital could potentially fire up a local, yet global, fertiliser and chemical industry. 

Under their own agreements with the Emiratis, Australia and New Zealand – already major agricultural markets for Jordanian phosphate rock – could then import fertilisers from the UAE manufactured in the Gulf from Jordanian raw materials.

Alamy via Reuters

Flies in the ointment

This overseas expansion may not be without its challenges, though.

First of all, the UAE is not the only country in the Gulf looking to diversify its overseas supply chain. 

Saudi Arabia’s Manara Minerals has also been wooing the same African countries for mining deals in recent times, signing MoUs with the DRC, Egypt and Morocco, while also increasing its investment in Brazilian miner, Vale.

At the same time, Australia and New Zealand are developed economies with powerful labour and environmental lobbies.

These have been far less welcoming of their governments’ Cepas with the UAE.

This is due to concerns over labour rights and potential environmental damage from further domestic mining activities.

At the same time, “often the mining investment is only the first part of the puzzle,” Lazar says. 

Securing the whole value chain – from shovels in the ground to processing, transport and downstream manufacture – is a lengthy, complex and sometimes frustrating process.

Zambia may well be a case in point. 

In April IRH’s offer of $1 billion for a 51 percent stake in the country’s troubled Konkola copper mine looked well on the way to success. But in July talks collapsed over a failure to agree the asset’s value. India’s Vedanta – the mine’s previous owner – then returned to take full ownership, itself pledging $1 billion for Konkola’s development.  

Nonetheless, Gulf investors “are well-financed and agile enough to respond well to market movements,” Lazar says. Setbacks in one country are unlikely to halt progress elsewhere.

While China’s economy is slowing and Western investors are often hesitant, “the Gulf states,” says Lazar, “will soon be in a very exclusive group of market stakeholders able to choose their targets.”