In this Member Spotlight, the U.S.-Saudi Business Council (USSBC) spoke to Pini Althaus, Managing Partner at Cove Capital, a Platinum-level member of the USSBC. Discussions centered around Cove Capital’s strategic investments in critical minerals projects, exploring their alignment with Saudi Arabia’s Vision 2030. Discover how Cove Capital addresses challenges in the critical minerals supply chain, supporting the Kingdom’s economic transformation and ambitions to become a global tech hub. The discussion also sheds light on how Cove Capital addresses challenges in the critical minerals supply chain and provides insights into the company’s role in enhancing local value creation and collaborating with Saudi counterparts for mutual benefit in the evolving economic landscape.
Given the goals of Saudi Arabia’s Vision 2030 to diversify the economy, how does Cove Capital’s investment strategy align with the Vision, and in what ways does it contribute to the economic transformation outlined in Vision 2030?
Since 2018, Cove Capital’s primary focus has been in the investment and development of critical minerals projects. Cove Capital views the Vision 2030 strategy implemented by H.R.H. Crown Prince Mohammed bin Salman as an essential plan to ensure that oil-producing countries like Saudi Arabia have a vibrant manufacturing industry, and in turn a robust economy, as the world starts the process of divesting from fossil fuels.
Cove Capital is working with key stakeholders in the Kingdom on the Vision 2030 supply chain strategy, addressing both the upstream (mine) and downstream (refining and processing) challenges that the world faces, as it seeks to create critical minerals supply chains independent of China.
Could you elaborate on the significance of critical minerals in the Saudi market, and how Cove Capital’s investments in explorative mining projects contribute to the Kingdom’s goals in securing a stable supply of these minerals for various industries?
The Saudi strategy, spearheaded by the Crown Prince, realizes that to become a global manufacturing hub, it needs to secure the raw materials and appropriate refining and separation technologies in order to control its own supply chain. At the present time, China controls more than 80 percent of these supply chains making it difficult for other countries to establish a robust supply chain required for both existing and new industries that utilize these critical minerals.
Cove’s investments in mining projects and refining and separation technologies provide countries like Saudi Arabia with options as it seeks to establish its own supply chains. The Kingdom is taking a multi-level approach to this: developing its own projects and technology in-country, seeking off-take agreements from projects in other countries, and technology transfers for its innovation hub.
Pini Althaus, Managing Partner, Cove Capital
Considering the increasing importance of critical minerals in advanced technologies, how does Cove Capital see the availability of these resources to fuel technological advancements in Saudi Arabia, especially in line with the Kingdom’s ambition to become a global tech hub?
Saudi Arabia has significant experience over many decades in the oil and gas industry, in addition to that of Ma’aden, Saudi Arabia’s state-owned mining company. The Kingdom has many experienced personnel who can with relative ease pivot to the critical minerals industry and apply much of the same skill-sets.
Given the Kingdom’s commitment to Vision 2030 and ensuring the establishment of its own robust supply chain, Cove Capital sees Saudi Arabia as well ahead of most other countries and regions (ex. China), who don’t have the financial commitments, expertise, policies, or drive to implement what is required for this challenging task. Cove has placed a significant focus on the Kingdom for these reasons. The Kingdom’s strategy is one that can be used as an example for many others seeking to achieve the same goals.
As part of Vision 2030’s emphasis on localization and building a robust supply chain, how does Cove Capital plan to integrate its investments into the Saudi economy? Are there specific parts of the supply chain that the company aims to establish within the Kingdom to enhance local value creation?
Saudi Arabia’s issue is not a financial one, which is the challenge for some countries. The Kingdom’s challenge, along with most of the world at present, is securing a consistent feedstock of various critical minerals, along with the refining and separation technologies to unlock the value of these minerals.
Cove’s investment into both mining projects and the downstream technologies may provide options for the Kingdom, both for offtakes (buying the raw materials) and also to further refine these materials in the Kingdom to be utilized for the Kingdom’s domestic manufacturing requirements.
In light of Cove Capital’s global collaboration approach, how does the company plan to engage with local stakeholders to ensure a sustainable and mutually beneficial impact on the Saudi market? Are there specific partnerships or collaborations in place to strengthen ties with Saudi counterparts?
In its numerous discussions with key stakeholders in the Kingdom, it’s apparent that there are a number of opportunities for Cove to collaborate with its Saudi counterparts. We are in discussion and collaborating with local companies, organizations and government agencies on everything from establishing a critical minerals fund – thereby providing a direct path for the raw materials and associated technologies to the Kingdom, to assisting with off-takes and technology transfers, including refining and separation technologies, magnet manufacturing, magnet recycling, battery manufacturing, recycling, and more.
