When a senior Biden administration official was in Cape Town for a mining conference last month, he heard from a number of African countries desperate for foreign investment to help extract critical minerals like lithium, manganese and cobalt.
At the same time, the Under-Secretary of State Jose Fernandez said, mining companies told him they were reluctant to invest in some key resource-rich countries due to poor governance standards and a lack of transparency.
A new State Department initiative called the Minerals Security Partnership, which Fernandez announced this month, aims to bridge that gap by channeling foreign investment into a sector that provides critical raw materials for electric vehicle batteries and solar panels. underpinning US efforts to usher in a greener economy.
The initiative – which includes Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, the United Kingdom and the European Commission – also aims to secure a chain of critical resource supply for advanced manufacturing. But it remains almost totally dominated by China, which controls most of the market for processing and refining minerals such as cobalt, lithium and other rare earths.
“There is this need, there is this eagerness from countries and you can go down the list – the Democratic Republic of Congo is obviously one of them, but you know, Zambia, Ghana, you name it,” Fernandez said in an interview. . “The success of our initiative will be: are we able to involve our companies and partners in projects that both make sense from an economic point of view, but also improve livelihoods and do not promote the resource curse?
The resource curse is a term used to describe the risk that the exploitation of natural resources will fuel corruption, instability or conflict.
The United States already shares information with countries seeking foreign funding for mining projects and with allied governments, foreign mining companies and financial institutions that can help launch projects, Fernandez said.
The State Department’s effort is part of a broader, longer-term effort by the Biden administration to wean the United States and its allies from China and other countries it sees as abusive. their market dominance or their geopolitical influence.
Fernandez said the global food crisis and supply chain chaos caused by Russia’s invasion of Ukraine is a reminder that nations must ensure that key areas – from minerals and batteries to vaccines – are not vulnerable to geopolitical shocks.
He described the State Department’s mining partnership as an attempt to play the role of “midwife” between countries hungry for investment and companies reluctant to violate environmental, social and governance principles, which would benefit United States by diversifying the sector and would eventually help resource-rich countries transition to processing and refining projects that typically generate more revenue.
“There are a number of supply chains where we are vulnerable,” Fernandez said. “The goal is to build reliable, robust and critical mineral supply chains that meet high environmental, social and governance standards, and I believe that if we do that we should be able to diversify our supply chain. ‘supply.”
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