US urges ‘race to the top’ for critical minerals at Africa Indaba mining conference

By Julian Pecquet
Posted on Thursday, 12 May 2022 20:40

Panel members take part in a discussion during the African Mining Indaba 2022 conference, in Cape Town, South Africa, 11 May 2022. REUTERS/Shelley Christians

The Joe Biden administration told Africa’s leading mining executives and officials this week that they are poised to play a key role in the clean-energy revolution, but only if African officials clean up corruption and other problems in the sector.

In a 10 May keynote address to South Africa’s Mining Indaba – the world’s largest mining investment conference – Jose Fernandez, the under secretary of state for economic growth, energy and the environment, laid out his government’s energy policy priorities.

These include a “just and inclusive clean energy transition”; the creation of “robust, sustainable, and transparent supply chains for critical minerals”; and the promotion of transparent financial and regulatory environments and natural resources management.

“The message there is that the United States and our companies would like to participate as partners with African nations in the development of their critical minerals, but we will do so following the highest environmental, social and governance standards,” Fernandez tells The Africa Report from South Africa, where he’s undertaking his first trip to sub-Saharan Africa since his Senate confirmation last August.

Oftentimes local communities that feel the effects of mining aren’t consulted, or don’t receive any benefits and live with the brunt of bad environmental practices.

“The message I tried to give […] is that we will compete while engaging in the race to the top, not a race to the bottom” he says. This means making sure mining benefits local communities instead of foreign oligarchs and their corrupt local patrons.

“Countries have learned that for these investments to benefit their people, for these investments to lead to sustainable economic growth, they’ve got to be done in the right way,” Fernandez says. “And that means disclosing agreements. That means […] cutting down on corruption. That means making sure that the communities are consulted.”

“That’s always a concern in mining projects,” he says. “Oftentimes local communities that feel the effects of mining aren’t consulted, or don’t receive any benefits and live with the brunt of bad environmental practices.”

Fernandez says conference attendees appeared to embrace the US message, which dovetailed with this year’s theme: ‘Evolution of African Mining: Investing in the Energy Transition, ESG, and the Economies.’

Countering China, Russia

Largely unmentioned, but permeating the US approach, is the intensifying competition with rivals, including China and Russia, which control most of the supply of the critical minerals needed to power key technologies such as mobile phones and electric car batteries.

China’s global dominance of rare earth imports, notably from Africa, has prompted the Biden administration to take emergency measures, including last year’s executive order to strengthen the resilience of US supply chains and this year’s authorisation for the Defense Production Act to be used to secure US production of critical minerals to bolster the clean energy economy.

Meanwhile, the invasion of Ukraine by Russia, which sits on the world’s fourth-largest reserves of rare earths, has sparked the search for alternative sources, notably in Africa.

“We do not ask our partners to choose between the US and any other country, including the PRC (People’s Republic of China),” Fernandez says. However, “we offer an alternative vision for economic development. It’s a vision that promotes democracy, democratic governance, respect for human rights and transparency, to better serve the long-term interests of citizens around the world”.

We will compete while engaging in the race to the top, not a race to the bottom.

The US also insists that other players in the African minerals sector, including China, respect local laws, particularly with regard to workers’ rights and protection of the environment.

The campaign comes as the US is helping the Democratic Republic of Congo revisit mining contracts with China that were signed under former President Joseph Kabila. In a press briefing, Fernandez said he’d met with the new Congolese mining minister, Antoinette N’Samba Kalambayi, at the Mining Indaba, and described her as “very impressive”.

“She talked about some of the very things that we are talking about in terms of the need to make sure that mining in her country benefits the people and what she’s doing to promote transparency in the sector,” he said.

“We think the mining sector in Africa has huge potential and we know it because there are a number of African countries that are already very active. We also know that in the clean energy future, critical minerals will be an important part of the solution. And that African nations have a lot of the critical minerals, be it cobalt, manganese, lithium, and others –  a lot of the critical minerals that will be needed to power turbines, to power electric batteries,” he said.

Fernandez says in order to meet the goal of zero carbon emissions by mid-century agreed to at last year’s COP26 summit, the world needs to multiply by six the amount of lithium used in the automobile sector. “The need is there, the supply is there on the part of African nations,” he says. “But again, this has to be done in a sustainable way, in an environmentally responsible way, in a transparent way.”

Playing by the rules

However, it’s not clear whether US companies always play by the rules. Last month, the advocacy group Global Witness released a report alleging that US companies, including Apple, Tesla and Intel, which source minerals from the Democratic Republic of Congo, may have obtained minerals from militia-controlled mines that use child labor because of flaws in a certification scheme call the Programme Mineral Supply Chains, or ITSCI.

“If companies and governments made stronger efforts, the situation could be much improved,” lead investigator Alex Kopp tells The Africa Report. “What we have now often looks like a PR exercise by companies.”

Fernandez says he isn’t familiar with the report, but that the US government insists that American companies follow best practices when it comes to mining, calling it “competitive advantage” for the US.

“We’ve got legislation in the US that provides for transparency and disclosure,” Fernandez says. “We talk to our companies about the need to follow the highest environmental principles, be it in in Africa, in Asia, or in the United States.”

“There’s no contradiction between following best practices in those areas, and being able to exploit your natural resources. In fact, the only way to do so sustainably is to follow best practices, because otherwise communities will not accept that,” he says. “[…] we believe that our companies understand that and we insist on those on those points of principle being followed.”

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