Australian group EV Metals plans to invest $3 billion in Saudi Arabia in a bet on metals used in electric car batteries.

Its spending will be on building plants to process metals including lithium and nickel, and then expanding into battery metals exploration, said Michael Naylor, managing director and CEO of EV Metals Group Plc. This will be one of the first major deals since Saudi Arabia passed a law to attract investment in mining as it looks to diversify its economy away from oil.

"We have the knowledge, technology and technical capabilities to bring to the kingdom to explore for these minerals," Naylor said. Based on its studies, EV Metals is "optimistic" that it will find significant deposits of materials used in electric car batteries in Saudi Arabia.

Naylor said the processing facilities will be developed over the next nine years. He said the company also has more than 15 applications for exploration licenses in the kingdom, and is looking for deposits of lithium, nickel and cobalt. The rush to secure these raw materials as the world searches for cleaner transportation has driven the energy transition into higher demand and higher prices.

London nickel has increased 82% in the past five years, and is up 16% in 2021 amid a broader boom. Lithium carbonate prices in China rose to record levels. The Saudi government, which is already a major producer of aluminum with expanding gold production, says the kingdom has more than $1 trillion in untapped minerals. The kingdom is looking to attract foreign investors, after it issued a mining law last year and a set of incentives.