The race for the future: How GCC states are diversifying their economies

The Gulf Cooperation Council (GCC) states are rapidly diversifying their economies, viewing control over critical minerals like copper, lithium, cobalt, and rare earth elements as a means to bolster national power and economic resilience. A new report by the Al-Attiyah Foundation reveals that Saudi Arabia, the UAE, Qatar, and Oman are actively investing in international mining, processing, and trading operations.

Their efforts have intensified since 2023, with Africa emerging as the primary investment destination and Latin America attracting more selective interest.

The growing demand for these minerals, coupled with increasingly concentrated supply chains, has driven this shift. The International Energy Agency (IEA) reports that lithium demand rose by nearly 30% in 2024, while demand for nickel, cobalt, graphite, and rare earth elements increased by 6-8%. China currently dominates the refining of 19 out of 20 strategically important minerals, holding an average market share of about 70%.

The GCC states are utilizing state, quasi-state, and private capital to diversify their economies, ensure long-term supplies, and strengthen political relationships. Saudi Arabia and Oman are developing domestic mineral resources and investing abroad, while the UAE expands on its established metals industries and broadens its overseas portfolio. Qatar, on the other hand, has made fewer but significant investments.

Despite these efforts, the GCC's portfolios remain concentrated, with copper, gold, nickel, and cobalt receiving more attention than minerals such as lithium, rare earth elements, tin, manganese, platinum-group metals, bauxite, and uranium. Investment is also heavily focused on African producers like the Democratic Republic of Congo, South Africa, and Zambia, with limited exposure to other regions like Australia, Canada, Indonesia, North Africa, Central Asia, and most of South America.

The United States has emerged as a key partner, signing a strategic framework for cooperation on critical minerals with Riyadh in November 2025. Collaborative ventures seek to combine GCC capital and processing capabilities with US technology, strategic support, and market access. Other potential cooperation partners include the European Union, the United Kingdom, India, Japan, South Korea, Australia, and Canada.

However, despite ambitious plans, few projects have reached operational status. Delays have been attributed to long development periods, complex host-country politics, resource nationalism, financing issues, capability gaps, and regional security risks. The Al-Attiyah Foundation's report emphasizes that the GCC states have significant advantages, including abundant capital, competitive energy resources, robust infrastructure, and extensive international connections.

The report highlights promising opportunities in overlooked minerals and underrepresented mining regions, as well as in the Gulf's potential to process titanium, magnesium, synthetic graphite, and polysilicon. By successfully leveraging these opportunities, the GCC could emerge as a crucial link between mineral-producing nations and industries driving the next wave of global economic development.