Middle East Rushes Into Rare Earths as Global Demand Explodes

​The Desert’s New Gold Rush
The oil-rich Middle East is pivoting from black gold to critical minerals. Mining executives are celebrating a surge of “phenomenal” investment interest from Gulf nations like Saudi Arabia and the United Arab Emirates, which are eager to carve out a place in the booming rare earths and battery materials industry.

Tony Sage, CEO of U.S.-listed Critical Metals Corp, said the company had been inundated with inquiries during his latest business trip through the region. “They can’t mine it themselves — there are no major discoveries here — but they want to be part of the downstream processing,” Sage explained, emphasizing the Gulf’s desire to invest in refining and manufacturing rather than raw extraction.

The remarks come during Saudi Arabia’s high-profile Future Investment Initiative (FII) — dubbed “Davos in the Desert” — where business leaders gathered under the theme “Unlocking New Frontiers of Growth.”

A Strategic Pivot Away From Oil
The Gulf’s interest in rare earths isn’t just economic — it’s strategic. Analysts say that Saudi Arabia and the UAE are leveraging their vast financial power and geographical position to become alternative suppliers to Western markets, which are increasingly wary of China’s dominance in the critical minerals sector.

Critical Metals recently announced a partnership with Saudi Arabia’s Obeikan Group to build a large-scale lithium hydroxide processing plant, underscoring the region’s intent to control more of the value chain.

Kevin Das, senior consultant at New Frontier Minerals, said the timing couldn’t be better. “We’re on the cusp of an AI boom. Every robot, every chip, every EV motor will depend on rare earths — and supply is only getting tighter,” he told CNBC.

Race to Catch China
For now, the Gulf remains a newcomer in this space. China still dominates, producing around 70% of global rare earths and processing nearly 90% of them. But as the U.S. and its allies push for diversified supply chains, the Middle East sees a window of opportunity to fill the gap.

“Many of Saudi Arabia’s projects are still in early or conceptual stages,” said Asna Wajid of the International Institute for Strategic Studies. “It could take years for the region to scale enough to challenge China or meet Western demand — but the ambition is real.”

Still, Wajid warned that some Western governments may hesitate to trade one dependency for another. “There’s a growing concern about replacing reliance on China with reliance on Gulf states that already wield enormous influence through oil and gas,” she added.

The Future of Rare Earth Power
The interest pouring in from the Middle East highlights a broader reality: critical minerals have become the new currency of geopolitical power. With the AI revolution and energy transition accelerating, nations are racing to secure the resources that will define the next century.

​From the halls of Riyadh to the deserts of Abu Dhabi, the message is clear — oil may have built the Gulf’s wealth, but rare earths could define its next era of global influence.