Saudi Arabia "spreads money globally" and has just invested in its first mining project, giving Vale $3.4 billion.

Saudi Arabia's "money-spending spree" continues, this time targeting the previously unexplored mining industry.

On Thursday, the Public Investment Fund of the Kingdom of Saudi Arabia and Saudi Arabian Mining Company (Maaden) announced their acquisition of a 10% stake in Vale SA's base metals subsidiary, with investment firm Engine No.1 purchasing an additional 3% stake, for a total payment of $3.4 billion.

According to Bloomberg's interview with insiders, Saudi Arabia outbid competitors including Japanese trading company Mitsui & Co. and the Qatar Investment Authority in the bidding process.

In recent years, Saudi Arabia has been committed to investing its vast wealth in various industries globally, acquiring stakes in video game developers and electric vehicle manufacturers. However, this investment in Vale SA marks its first major project investment in the mining sector.

In addition to the agreement with Vale SA, Maaden recently formed a joint venture with Ivanhoe Electric Inc. to develop mining projects in Saudi Arabia and partnered with gold company Barrick Gold Corp. for exploration and development in two new regions of Saudi Arabia.

Vale SA's base metals business is responsible for mining and processing nickel and other metals required for electric vehicle batteries. As Saudi Arabia seeks diversification and the establishment of new industries away from hydrocarbons, Maaden will focus on minority stakes in the fields of iron ore, copper, nickel, and lithium.

However, Saudi Arabia has also made investments in the petrochemical sector this year. In March, Saudi Aramco acquired a 10% plus one share stake in Rongsheng Petrochemical for CNY 24.6 billion, in collaboration with Northern Industries and Panjin Xincheng Industrial, with plans to build a large-scale integrated refining and chemical complex in Northeast China, with a total expected investment of CNY 83.7 billion.

For Vale SA, the world's second-largest iron ore supplier, this sale will help raise up to $30 billion in investments to meet the growing demand for metals such as nickel and copper in the electric vehicle sector. Collaborating with Saudi partners to establish an independent base metals division may also allow Vale SA to participate in the wave of mergers and acquisitions in the industry.

In December of last year, Vale SA stated that it would consider selling up to 10% of the business, which at the time attracted interest from General Motors and Qatar, according to The Wall Street Journal.