United States teams up with Saudi Arabia as a work around China metal domanice or....

Partnership could boost U.S. in race with China for cobalt while jump-starting Saudi mining industry

With the United States current polical “net-zero” poistion and it’s mining regulatory nightmare, compounded by metal and materials current and future deficits, has cause some to speculated if America will be able to secure enough metals and materials to reach it’s green upotphia fantasy. How was America going to get it’s metals? Will they come to economic stanity and restrain the regulatory powers of the numerous alphabet agencies: E.P.A, D.O.I, F.W.S, U.S.D.A.? Sad to say no.

The WSJ recently reported U.S., Saudi Arabia in Talks to Secure Metals for EVs in Africa. The $15 billion dollar deal would give US companies the right to purchase mined metals from Saudi Arabia assets, easing the US depenndecny on China for citiracl metals and helping to build Saudi Arabia mining sector. On the surface, the strateic parternership appears to straight forward and benefits both patries. However this parternership is the start of a energy cartel most people are unaware of.

At first glance glance, Saudi Arabia move into mining seems to fit the narravite of Mohammed bin Salman Al Saud (MBS) diversifying his country’s economy and the narravite of the United States securing supply of critial materials needed for it’s military and electricfication agenda. Saudi Arabia, along with Engine 1 which made a 3% investment, made a 10% investment in Vale’s industrial metal unit, worth $2.5 billion dollars furthering cementing his country’s path towards a future of less oil.

Energy is one of the biggest expenses for mining companies constituting approximately 30% of total cash operating costs. In 2007 the D.O.E, one of those alphabet agency, conduct a energy bandwith study and concluded the U.S. Mining Industry uses 1.246.3 trillion btu per annum. The E.I.A indicates of the industry sector energy consumtion, mining uses over 12%. However you say it mining uses a lot of energy and of that energy fundamental diesel is the most important.

It is estimated that the mining sector utilizes nearly $7 billion worth of diesel-powered equipment. This ranges from diesel-powered shovels and drills to underground haul trucks, large excavators, and material handling equipment to extract, convey and transport for processing mined natural resources. Diesel Techonolgy Forum

So Saudi Arabia has created a back-door way to increase demand thereby increasing the share it’s product on the market while simultaneously gaining greater influence in the energy markets by controling more resources while profiting from both side of the energy complex trade—liquids & metals.

The United States for it’s part gets several strategic concession. First it allow the US war machine and economy access to available materials without having to deal with the mining liabilities. Second, the United States will also be shoring up relations with Saudi Arabia further economically intertwining the two nations. The by-product will be the continuationing of the commodity dollar system and the alliance will also give the US greater influence over commodities, completing it’s strategy of assuring energy access while simultaneously exerting greater influence over the old OPEC. Using the combination of the SPR-the ultimate oil field-along with regluatory actions reducing supply from shale & restricting captial from the oil & gas industry, this latest tool will have to greater control over supply and therefor price.