Moderator:  Certainly some interesting perspectives we’ve been hearing this morning.  One key issue which started in the very first panel this morning obviously related to the super region, and through thinking and some of the thinking and looking at how that’s going to go.

In our next conversation we’re going to talk about making Africa, Western and Central Asia processing and manufacturing hubs.  There is no question about what is happening, about everybody wanting to have a manufacturing and processing hub not just in their own country, but in their own region.  You can see the same thing in Asia.  You can see the same thing in South and Latin America.  And you can see the same conversations being had in Africa.

Undoubtedly the question also remains around the policy environments that allow this to happen.  It’s not going to be easy, because collaboration is a lot easier said than done when one has to consider national imperatives and the business of making sure that each country is able to take care of themselves.

Let’s begin having that very conversation.  What are we going to do?  How is this super region going to look?  And exactly why does it matter?  

Joining me to have that conversation please help me in welcoming His Excellency Khalid Al-Falih, the Minister of Investment to Saudi Arabia; His Excellency Paul Kabuswe, the Minister of Mines and Minerals Development in Zambia; Ambassador Geoffrey Pyatt who is the Assistant Secretary for Energy Resources in the US Department of State; Mutlaq Al-Morished, Board Member and Executive Officer of TASNEE; Eduardo Bartolomeo who is the Chief Executive at VALE; and last but most certainly not least, Dominic Barton who is the Chairman of Rio Tinto.

Gentlemen, please take your seats.  Welcome.  Thank you very much for joining me, and I’m looking very much forward to having this conversation.

I always hate to say this to you, but of course we don’t always have a lot of time.  So Excellencies, can we get this ball rolling?  Short and sharp if we may.

The super region.  Why is it important?

Minister Al-Falih:  Tumi, good to see you, and salam alaikum everyone, and thanks to my colleague, Minister for bringing us together at a very critical time, and at the beginning of the year.  A year of hope, a year of opportunity, but also a year of unrealized potential that we heard a little bit about from him about doubling almost the Kingdom’s mineral resources.  So I congratulate him on that.

You know, at the end of the day accessing the minerals, the critical materials that we need for what we know to be a historical challenge for humanity which is the energy transition, is going to be underpinned by resources, it’s going to be underpinned by collaboration across countries and geographies, companies, people, technologies, institutions, different sectors.

Going back to resources, and we heard about how the Kingdom has been able to harness its resources as well as explore then in the case of minerals, this so-called super region from Central Asia all the way through the Middle East to Africa is already known to have at least a third of the global resources.  And that’s with under-exploration being a characteristic.  So going back to the analogy of Saudi Arabia, I think we could increase that significantly.

But not only is it under-explored, it’s under-invested in terms of infrastructure, in terms of mining capabilities, in terms of deployment of technology, and in terms of access to finance.  

I say this one, we’ve heard all morning that the demand on materials is going to be a multiple of what it is today.  And add to this something that hasn’t been mentioned sufficiently I think today, is that a lot of the existing production facilities will either decline because of depletion and resource decline, or because it is not acceptable from a sustainability and environmental standpoint, or because of over-concentration in certain geographies whether it’s upstream or the process.

So that tells you that the incremental demand, the incremental investment, the incremental technologies and the effort to meet this inevitable challenge that we have to meet is quite frankly unprecedented in my lifetime.  

It is not something that this industry, whether it’s from government or private sector that are with us in the audience and in the panel can reach alone.  I think it’s a challenge for the global community to come together.  It’s going to require working across borders, especially in the super region, to access somewhere between a third and half of the world’s critical materials.  It’s going to require deploying the kind of sustainable technologies from energy to logistics to processing to recycling, the kind of circularity that Prince Abdulaziz talked about in the area of energy is going to also have to be deployed in a big way from consumption all the way back to upstream. 

It’s going to require to undo and reverse what you talked about in your opening remarks which is the industry is getting a bad rap, ironically while the industry is really the underpinning for meeting the challenge that we have to.  That means exciting the research institutions, exciting the young people, bringing the latest technology.  And I think most importantly, bringing the finance into the industry.  

I’ll end with this.  We are going to need trillions of dollars in the next couple of decades to go into the industry to meet the reshaping of the global supply chain, and I believe that the Kingdom is going to be at the heart of this.  We’re going to be leading this.  

Within the super region I like to think of the Kingdom as a connector connecting countries that are today challenged with finance, challenged with logistics, being landlocked in Central Asia, but also our brothers and sisters in Africa who also have their own challenges in accessing all of this.  

I think the Kingdom can be a connector and the Kingdom can be a partner — not can be, but will be a partner to countries in the region.  And of course the private sector who is with us in strength is willing and able to partner with the companies from around the world to come and turn this resource base to a great enabler not only for development of the countries of the region which is paramount to people like me who are in public policy positions, but it’s also paramount to the global community as we look to energy transition.

Moderator:  It’s interesting, you talk about the public policy question because it leads me to Your Excellency, Minister Kabuswe.  

On an African continent everybody can appreciate and understand why it would be important in developing economies to have processing and manufacturing hubs, revenue, et cetera, et cetera.  The list is endless.

One of the challenges we’ve had on the continent, however, is the policy environment and framework and the collaboration. 

How do you see the changes potentially in that context in order for us to do better when it comes to manufacturing and processing hubs?  We manufacture, we produce a lot of raw materials.  We’re not so great at processing and manufacturing.

Minister Kabuswe:  Thank you.  Thank you very much.  

First and foremost, just to thank Saudi Arabia government, the whole team for such a fantastic arrangement.  We came here last year, and this year it’s even much, much better.  So thank you very much.

One thing I want to say is that it’s only a mind that doesn’t think straight that would want to do the same things and expect a different result.  I think that where we are coming from, I think we have so much worked in siloes that it doesn’t work for us, especially in Africa.  

So I think that here now comes an opportunity when the world is going to look for critical minerals and the whole world is talking about shutting it.  So it means that even countries like in the Zambian jurisdiction, in the two years that we’ve been in government we’ve already shown that declaration of intent, that we need collaboration.  Already we have signed an agreement with DRC, our neighbors, because DRC and Zambia share a very long border and as such, as a country we are said it’s only when you collaborate.  Because if we work in siloes, this one is shifting this way, this one is shifting the other way.  I think that we are not going to see more benefit.  So it is important that we begin to collaborate as countries, we begin to work together as countries, and look at the resource base that we have as countries.

One thing I’ll say is that really there’s been so much emphasis on the fact that we can no longer continue to export raw materials.  Zambia has been mining, for example, since the 1900s and we just end that copper cathode and begin to export those things.  And when you look at our sales, we are endowed with basically all the critical minerals that you can talk about.  We have lithium, we have copper, we have manganese, we have graphite, we have basically all of them.  But when you look at our country, I think that we haven’t seen the benefit that we must see as a country with those minerals.

When you look at the geography of Zambia, you cannot go to any area without going through another country.  That’s why historically Zambia has fought that the whole region has peace, which Zambia has enjoyed for quite a long time.

So that even as we collaborate, we are friends in those collaborations so that we can maximize benefits.  So even in terms of policy.  If I make policies myself that will disadvantage my neighbor, then that is not going to help matters at all.  That’s why the regional groupings, Sadiq and African Union, we all sit together so that we make sure that countries can come together and maximize the benefit of this resource.

When you look at Africa, you talk about the continent that is well endowed, but when you go around countries, you find that we have a lot of impoverished people and this must come to an end.  How does it come to an end?  Is through collaboration, working together.

And I want to again applaud Saudi Arabia for such a platform because I think that we’ve been all shifting.  This one is shifting this way, this one is shifting that way, and it’s time to come together.  It’s time to collaborate and look at how we can even harness the [various even roots that we have.

For example, like I said, Zambia cannot go or export anything unless it goes through its neighbors, and that is critical.  So for you to really look at the benefit in terms of collaboration is when you speak to countries, is when we accept an invitation like this one to come to Saudi Arabia, and then discuss and look at how we can harness all these resources together.  And then move forward.

I also want to emphasize the point of looking at the human resource that Africa has.  We must take advantage of that and use it to help us in terms of benefiting from our resources.

Moderator:  Excellency, can you and I just agree that we’re not choosing in any direction.  Can we just agree on that?  Are we agreed?  We’re not choosing this way, that way, or any direction.

Minister Kabuswe:  No, no —

Moderator:  I know.

Ambassador Pyatt, if I can then come to you.

Looking more broadly speaking, looking globally, we can appreciate why it’s important to have the super region that collaborates and cooperates.  Because currently there is this sense of disparity, and I think that’s what His Excellency’s referring to.  That this one’s doing this, this one’s doing that.  A bit of a silo mentality.  But here’s an opportunity for us to collaborate because we need that in order to produce the volumes and to process the goods.

How do we make sure that that happens?

A/S Pyatt:  Thank you, Tumi.

I should say on this my job is made very easy by the fact that both of the Ministers framed the issues so well.  And it starts with I think the presentation we heard this morning from His Royal Highness the Energy Minister.  

The emphasis on the idea that the energy transition is exactly that.  It’s a transition.  It’s not a binary switch.  And we are going to have to figure out how we work together.  And the United States is strongly committed to our partnership with the Kingdom of Saudi Arabia in that regard, in order to help deliver the energy the world needs, in particular for the hundreds of millions of people coming into a middle class in the developing world.

So from that perspective we start from the principle we just heard from the Finance Minister, the extraordinary growth in demand we’re going to see.  Forty-two times growth in lithium requirements; 25 times growth in graphite requirements by 2040.  And this is the statistic that really jumps out at me.  According to the IEA to meet our energy transition goals by 2030 we are going to have to mobilize some $4 trillion of new investment every single year.

So we can only tackle this problem collectively.  We want to do so in the context of a market for critical minerals, as Eduardo and Dominic can talk about much better.  A market which is sometimes opaque and turbulent.  We want to figure out how we uphold the high ESG standards that I know Minister Kabuswe would want to see.

I greatly appreciated the Minister’s reference to the partnership with DRC because the DRC-Zambia Battery Council was signed in Washington, DC during the Africa Leaders Summit in 2022 and it reflects the Biden administration’s effort across a variety of lines to build these partnerships, to address the issues of logistics the Minister talked about.  My colleague Amos Hochstein who will address the group later is leading our effort to foster the Lobito Corridor which is intended to help connect Zambia, Angola, DRC to bring the commodities to market.  But importantly me, as you emphasized, to do so in a way that delivers benefits to the citizens of the producer countries, whether those countries are in Africa, Central Asia, Southeast Asia, or the Americas.

I think this is a fundamental challenge of our time.  We need to build the kind of partnerships that the United States has been investing in globally for decades and I started my visit here in the Kingdom, in Riyadh.  It was a wonderful reminder of the 70-year legacy of energy partnership between our two countries, Minister.  And I think now our signature initiative I this area is something called the Mineral Security Partnership, bringing together 13 countries, the European Union, more than half of global GDP, to try to establish a new baseline for developing these resources, setting, as I said, the high ESGs of our citizens and our democracies demand, but doing so in a way that delivers benefits for the producers.

Moderator:  Mutlaq, if I can come to you.

Let’s talk for just a moment about the TASNEE.  How Titanium obviously is a very tight space wherever in the world you two look at.  It’s competitive, it’s tight, everybody wants to do the best out of it.

How are you grappling with that particular question in the context of this broader discussion and collaboration?  How are you approaching it and dealing with that challenge?

Mr. Al-Morished:  Thank you so much.  Good morning, ladies and gentlemen.

It’s really great to be in the center here.  My right hand side is public policy-makers.  Myself on the left are the executioner of that policy, or the private sector.  

TASNEE known, a very well known in Saudi Arabia is 100 percent private company owned by the Saudi stock market.  So publicly traded.

We entered the titanium business, which we were in it about 35 years ago in the TiO2 space, titanium dioxide.  We own the mines, we own the pigment plants and including the marketing.  And to grow beyond the pigment we became the world’s number one TiO2  with TRONOX of the US, the combination.  You need to go somewhere else which with ended up the titanium metal itself.  

In the industry, originally, I came from the chemical, and in the chemical you make money, you own control and own the full chain of manufacturing.

The same thing with TASNEE.  We actually own the mine to produce the Ilmenite or the titanium salt, all the way to the plain parts.  That is the only company globally that owns that Hill. The mines we own in Australia, South Africa and Brazil.  We bring the Ilmenite to Jizan in Saudi Arabia.  We smelt it, slag it, produce the TiO2, take it to our pigment plant in Yambo and also globally in Europe and in America, and produce the TiO2.  Take our TiO2 with chlorine make tetrachloride or titanium tetrachloride, and then go to sponge.  From there we’re going to melting and forging parts to the plane.

So we own the whole thing.  That’s how TASNEE is playing in the game, really concentrating in owning the chains from the mine to the end product.  It’s been extremely successful.  We are very cooperative.  We, even though we own the mines in Australia, we bring material from Zimbabwe for simply logistic reasons.  Zimbabwe is closer shipping time to Jizan than in Australia and we sell some of our aluminized to Asia rather than bringing it to Jizan.

So there is a lot of collaboration into that case.

Moderator:  And clearly, clearly a demonstration example whichever you will of how if you own the process it’s quite efficient and you can manage some of the costs related there, et cetera, et cetera.

If I can then come to you, Eduardo, and let’s talk about VALE.  How are you approaching the question of decarbonization?  Without being too broad.  Let’s bring it down, and looking at your organization in particular and how you’re thinking about the challenges which are inherent to this industry more broadly speaking, and to anybody who’s looking at sort of dealing with supply chains, but also truncating the processing process.

Mr. Bartolomeo:  Thank you very much.

First of all, I’m very glad to be here.  Saudi Arabia is almost my home now because it’s my fifth time already here in less than two years.

So I think first of all we see decarbonization as the core of our business.  We see it actually as an opportunity, not a threat.  

Because I was talking to somebody and I think you mentioned in your initial remarks, exactly our reputation is not the best one.  And I think we have a unique opportunity to change that because like the pharmaceutical industry did in Covid.  Mining has to be perceived as the solution for this climate change and will be unless we don’t do the right thing.  I think that both all of the previous speakers talked about that.  Yes, the standards are really relevant and critical in that sense.

But if you switch you asked me to be specific, if look at my own spoke one and two, I’m talking about 14 million tons of CO2.  If you look at only shipping that VALE demands on its business if 14 million tons.  Almost the same.

When you look at the steel industry that we supply to, it’s 600 million tons.  So if we were to decarbonize the world we have to do what is going on on the super region. What the future of steel is here.  What is being done for decades is where the world will head on.  That’s why VALE brought the mega hub concept.  It has to do a lot of collaboration that was mentioned before.  We are bringing the upstream closer to the downstream.  And then you have to partner.  It’s a partnership idea.  I’m not going to produce steel.  I’m not a steel producer.  But I can partner with Balu and Aranko as we are doing here in Saudi Arabia.  We can partner with the Japanese as we are doing Oman.  By the way, we have a very good experience in that super region.  We are here for more than 50 years, operating Oman.  Extremely successfully.

So decarbonization for us, it’s an opportunity and it’s our business.  We don’t exist if this is not a reality.  Then what I think we should, and I was talking to the Ambassador, is it priced correctly?  All the externalities are priced correctly?  Because I in my books I have a net present value of $4 billion to decarbonize by.  At the same time I have a $17 billion price on the decarbonization.  One is for sure I’m going to spend.  It is a reality or not.  

So that’s more or less where our minds are when we talk about decarbonization.  We truly think it has to happen one way or another.

Moderator:  And I think that’s a really critical point because obviously apart from this theme of bringing talk into action, it’s where does the rubber meet the road, right?  Where do you move from the ideas of how we collaborate, how we innovate and what the ideal is, and what’s actually practically doable?

Dominic, if I can come to you, looking at what is practically doable.  You obviously are a global player as well.  You recognize very easily the challenges depending on which region you’re dealing with.  How has manufacturing, processing and manufacturing changed over the years?  And what in your view might the impact be should we get this super region notion correct in the context of processing and manufacturing?

Mr. Barton:  Thank you again for having me on the panel.  It’s great to be back in Saudi.  And I think it’s not a surprise that Saudi is convening everyone in this super region given what they’re doing here themselves on it.

You mentioned the point, Rio Tinto is 150 years old.  So it’s interesting when you go back through history at where manufacturing has shifted, because it’s shifted a lot as the world has changed.  Also the company you mentioned being vertically integrated.

In our aluminum business in Canada, AlCan, we were so far down the chain we made the wrapping that you put your food in the fridge in.  It was a consumer good, so we were completely vertically integrated.

So over time, depending on technology, energy, geopolitics, where the consumer is, companies need to think about where they are on that value chain.  Are you upstream or downstream?  Are you integrated?  And how and where you operate.

We are in exactly that period of time right now.  I’d just say if you think about manufacturing, a lot of people have talked about how that shifted.  In the year 2002 50 percent of the world’s manufacturing was in the United States and in Europe.  That’s dropped to 30 percent last year.  It’s a shift.

Now everyone wants the value-added and the manufacturing more in their countries.  You can’t do that without the materials.  This is where I think the industry has to step into the darkness and we have to do more to have that recognized, the importance of what we’re doing.  But you will not have manufacturing if you don’t have the materials and the processing.

What I would just say is in this region I think that there is a huge opportunity, because we’ve got the population.  A quarter of the world is going to be in Africa.  Talk about a consumer base.  I can’t imagine a bigger one than that.  

Energy.  And again, it’s interesting the way the Minister described it.  It’s not fossil fueled energy, it’s renewables that’s there.

Then we have the technology that’s changing dramatically.  And I think that’s something that we’re underestimating, how quickly that’s shifting.

So I see huge opportunity for us.  We’ve seen this area not as a region but as working in pockets of it.  I think we have to update ourselves on that front.

Moderator:  Okay, gentlemen.  We are going to be running out of time shortly because that’s the story of our lives when we’re doing panels.  So I’m going to start at the far end and work my way back.  I’m going to ask you two things.  Actually, I’m going to ask you three things.  The first thing is, can you be brief?  The second thing is give me what is the biggest challenge and what you see may be the quickest win.

Dominic, you go first.

Mr. Barton:  I’m just going to answer one of your questions which is on I think consistent, long term policy.  If we have consistency in policy and direction, it’s a bit of what the Ministers talked about, we’re a long-term business.  We’re a 30-year timeframe business, so please be long term consistent policy and we’ll be able to move quickly.

Moderator:  That was really quick.  Thank you, Dominic.

Mr. Bartolomeo:  I think prioritization.  We need to be prioritized.  There’s a lot of talk, less walk.  Permitting is like a nightmare everywhere.  So, if we want to really face the challenge that is in front of us, we need to be much more quicker, much more faster, much more focused, and much more cooperative between nations and between governments and private sector.

Mr. Al-Morished:  On our side, it’s the speed of decarbonization for a natural industry like mining and manufacturing.  And how from the regulation side, the public policy side, rules need to be long term and need to give people time for transition.  We can’t expect people to come to standards of Europe in five years when Europe itself took 100 years.  So we have to be realistic in that arena.

The other things we see in our industry, unfortunately, the supply chain disruption. We’re going through it for different instability around the world.  And shipping around long distances, what’s happening in the Red Sea.  So that’s really costing the industry quite a fortune.  And that’s a policy-maker issue also.  It’s not for the industry to solve these issues.

Moderator:  Thank you.  I think that was a call to action pointing to this side.  [Laughter].  

Ambassador, your turn.

A/S Pyatt:  The biggest challenge, I think, equity.  Ensuring that the benefits and the cost of the energy transition is distributed in a way that’s sustainable, so we don’t end up with one story in wealthy countries and another in the developing world.

I think the biggest opportunity is to reshape global supply chains.  Leveraging the kind of partnerships that my team is seeking to build, leveraging the recognition that I think everybody in this panel has shared, that there is an over-concentration of some of these key commodities right now.

Then I’ll just add an extra bonus point.  I think for the United States, the biggest challenge — we have to show up.

Moderator:  It’s okay.  He only did one so you’re allowed to have three.  You lost your chance, Dominic.

Your Excellency?

Minister Kabuswe:  Thank you very much.

I think one point that I want to emphasize is that we need mutually beneficial partnerships.  I think that we are by the history of having a slave/master relationship in terms of investment.  So as Zambia we are calling for partnerships that are mutually beneficial, that are mutually respectful.  

And also we need affordable capital for Africa.  I think Africa has been exposed to a lot of expenses of capital.  So we need affordable capital. 

And we need new technology in Africa.  I think that will also help.  As I talked about the vast human resources that Africa has, we need even technologies that are also affordable, by the way, because technology can be expensive, may be deliberately so.  So we need those three things.

I think that has been the challenge of Africa to collaborate.  Thank you.

Moderator:  Excellency?

Minister Al-Falih:  I think in addition to what has been said, our biggest challenge as humanity is short-termism.  Everybody is trying to look at the next year, the next quarter, at most the next couple of years.  And this is an industry that works in decades and it’s an industry that must do what it has to do with other entities, other partners for humanity without exaggeration to survive.

Risk aversion is related to this.  And I think our industry, this industry is full of risks.  Technology risks.  Project risks.  And of course geopolitical risk.

What we are doing through this platform, through this gathering today is trying to reduce those risks; trying to connect, integrate this super region, bring in the global industry, bring in global leading nations like we have with us on the panel today in the case of the United States, the UK and the previous panel.  China, I might add.  All important countries in this global economy have to work together to bring the materials that will sustain a population that is going to be 10 billion in a few decades, in the 2050s, and many of them will be living in and around the super region.

Moderator:  Gentlemen, we are in the red.  So if it was our bottom line, we would be in serious trouble.  But seeing as it’s not, it’s a panel, I have to say thank you.  Excellency al-Falih, Excellency Kabuswe, Ambassador Pyatt, Mutlaq, Eduardo, Dominic.  Thank you so very much.  You can use a round of applause, and thank you to them.

U.S. Department of State

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