Matthew’s view
Saudi Arabia reshuffled the leadership of its mining and defense sectors, in a sign of renewed pressure on lagging areas of the economy sectors that are key to the kingdom’s diversification plans. Energy Minister Prince Abdulaziz bin Salman will now oversee the Industry and mineral resources ministry, replacing Bandar Al Khorayef, who was appointed to oversee the General Authority for Military Industries.
The reshuffle follows the appointment of Public Investment Fund executive Fahad Al Saif as investment minister in February, replacing the long-serving Khalid Al-Falih, in another sign of how the kingdom is trying to shake things up to meet its Vision 2030 goals.
Riyadh said it wants to unlock an estimated $2.5 trillion in mineral wealth and sees mining as a “third pillar” of the economy alongside oil and petrochemicals. It spun out the industry ministry from the energy ministry in 2019 to give the sector more focus, but the kingdom hasn’t significantly scaled output or attracted foreign companies.
With two ministries now under Prince Abdulaziz he is overseeing all three pillars of the economy, presenting a challenge in which one he devotes his time to. He’s also in charge of oil production and a key figure holding together the increasingly shaky looking OPEC+ alliance at a time when prices are surprisingly low, given the conflict in the region, and Gulf countries face unprecedented challenges getting their oil to customers due to the closure of the Strait of Hormuz.
Defense manufacturing is another top priority. The kingdom has one of the world’s largest defense budgets, but most of that goes into the hands of foreign military equipment makers. The kingdom is targeting localization of 50% of spending by 2030 from less than 25% in 2024 — a difficult target to hit given Saudi Arabia’s reliance on foreign procurement, but one that now faces additional attention in the wake of the Iran war and concerns about the ability of foreign partners to restock defense systems depleted over the past few months.
Notable
- Prince Abdulaziz, known as ABS, is now the face of Saudi Arabia’s industrial ambitions, and is regarded as a pragmatic, results-oriented official who has steered OPEC+ through a turbulent stretch in oil markets, according to Bloomberg. His expanded portfolio lets him align the energy, industry, and minerals briefs — a priority underscored by the effective closure of the Strait of Hormuz, which forced policymakers to rethink trade routes.