RIYADH, Saudi Arabia – The energy minister of Saudi Arabia – the Gulf kingdom whose wealth and power rests disproportionately on its vast petroleum reserves – believes that oil is no longer an energy security challenge.

Instead, he said, the coming battle will be for entirely different materials buried under the ground: critical minerals.

“Oil is no longer an energy security challenge – it’s going to be gas, electricity, predominantly minerals,” Saudi Energy Minister Abdulaziz bin Salman told attendees at the annual Future Minerals Forum in Riyadh.

“Today some of these countries, they have, as a country, 50% of the ownership of some of these required minerals and critical minerals … countries are racing to access critical minerals and secure their own supply chain. Rushing to secure access to resources will ultimately lead to higher emissions, higher metals costs and higher energy prices.”

The energy minister was referring to minerals critical to the energy transition and advanced technologies – including lithium, cobalt, nickel, graphite, manganese and other rare earth elements crucial for making things like electric vehicles, batteries, renewable energy technology, computers, and household goods. 

China currently controls roughly 60% of the world’s production of rare earth minerals and materials, according to a recent report by Rice University’s Baker Institute for Public Policy. That has many countries, particularly those in the West, concerned, as these resources become ever more important to national security and economic stability.

“More AI [artificial intelligence] and data centers means more energy,” Bin Salman said. “You’ll have AI, data centers, mining, crypto mining … can you imagine what will happen to energy demand? Can you imagine the race between mining to create energy, and energy to create mining and the growth of these economies?” the energy minister asked. 

 “I really don’t like the idea of being the energy minister at that time.”

Electricity demand around the world is surging, fueled by the rising demand for data centers required to power AI, factories, electric vehicles, and hotter and longer summers. A recent energy department memo cited in numerous press reports projected that U.S. power grids could see as much as 25 gigawatts of new data center demand by 2030.

Critical minerals and rare earth metals are also essential for renewable technology like solar panels and wind turbines, which are central to many countries’ efforts toward an energy transition away from fossil fuels. China refines 95% of the world’s manganese — a chemical element used in batteries and steel manufacturing — despite mining less than 10% of its global supply.

Saudi Arabia on Wednesday announced it is working on a $100 billion mining investment as it aims to become a global hub for both mining and minerals extraction and processing. The kingdom plans to significantly expand its exploration for lithium within its own borders, as well as for other critical minerals. 

Boosting its minerals sector and investing in a domestic supply chain is part of Saudi Arabia’s Vision 2030 mission to diversify its economy away from oil.