Saudi Arabia expands lithium processing to supply BMW

Saudi Arabia expands lithium processing to supply BMW

Saudi Arabia is planning a second lithium processing facility, as it steps up efforts to work with western partners to develop its battery supply chain.

The facility, which will use feedstock mined in Austria to produce refined lithium hydroxide for BMW, is a sign of how supply chains to process the metal are slowly developing outside China.

China accounts for nearly 60 per cent of global processing for lithium, a critical ingredient in electric car batteries — and the EU and US are bolstering incentives to create more capacity. 

Australia-listed lithium start-up European Lithium and the Saudi industrial conglomerate Obeikan Investment Group will each take a 50 per cent stake in the plant. The facility will cost $350mn-$400mn and will probably produce its first lithium hydroxide in 2026.

European Lithium will supply the processing plant with lithium ore, known as spodumene, from its mine in southern Austria. 

“A lot of the world is fearful about what would happen if China switched off its [lithium] exports,” said Tony Sage, executive chair of European Lithium. “It would be a disaster for the energy transition.”

For Saudi Arabia, the project is the latest in a series of deals aimed at boosting its role in electric vehicle production and the