Increasingly concerned over their vulnerability to China and Russia, Western powers and their allies banded together this spring to ensure that critical minerals are mined and processed in a way that promotes high environmental, social and governance standards. Launched at the Prospectors and Developers Association of Canada convention in Toronto this June, the Minerals Security Partnership brings together the US, Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, the UK and the European Commission.
On 22 September, on the margins of the UN General Assembly, the US gathered these partners together along with mineral-rich countries looking to benefit from developed countries’ funding and know-how in order to step up the processing of rare earths domestically. Five African countries made it to the invite list: The Democratic Republic of Congo, Mozambique, Namibia, Tanzania and Zambia.
“We’ve got to diversify our supply chains, and for them it’s a development opportunity,” Jose Fernandez, the under secretary of state for economic growth, energy, and the environment, tells The Africa Report.
At the same time, he said, the US is determined to avoid a race to the bottom in its competition with China and other rivals.
“We will not support an investment from a consuming country into a producing country, unless they follow the highest standards,” he said. “If we do this right, everyone wins.”
Build it in Africa
Joining Fernandez at the event were Secretary of State Antony Blinken and the president and chairwoman of the Export-Import Bank of the United States, Reta Jo Lewis. The bank is playing a key role in the partnership by helping fund supply chain resilience.
“Too often, the relationship between minerals-producing and minerals-purchasing countries has been extractive and characterised by abusive working conditions,” Blinken said in opening remarks. “Often, it has left behind environmental degradation and devastated communities.”
Blinken said the partnership doesn’t only want to improve mining practices, but also ensure that developing countries start benefiting more fully from the transformation of their raw resources.
“We aim to make sure that minerals-rich countries benefit from all stages of the value chain, from extraction to processing to recycling,” Blinken said. “That’s ultimately how we can make sure that each project actually serves your communities and uplifts your citizens.”
It’s a message that resonates with African countries.
“We are not so particular about who helps us,” Zambian Minister of Commerce, Trade and Industry Chipoka Mulenga tells The Africa Report after the meeting. “Our focus is about who helps us [and do they] share[…] the vision of my people and our country, because for a very long time, we’ve sent our minerals in their raw form all over the world.”
Mulenga said the US could be a valued ally as Zambia partners with its neighbour, DRC, to develop an electric battery plant at the border. The mineral-rich belt that straddles Zambia and the DRC produces more than 70% of global cobalt, more than 95% is exported in raw form, depriving both countries of crucial revenue.
Mulenga said he met with Fernandez on 21 September along with his Congolese counterpart. The US appears keen on the project, he said.
“There were very good takeaways from that meeting. [Fernandez] said some things that g[a]ve me a lot of insight and opened [our] minds on how we should do things. […] I think America wouldn’t be a bad partner to do business with.”
[…] financing was definitely mentioned and not just by the US, but by Australia and the European Union as well
Likewise, Namibia is interested in domestically processing its ample reserves of rare earths such as dysprosium and terbium to create magnets used to power wind turbines. The coastal nation is looking to deploy renewable energy assets in mass to incubate a synthetic fuels industry.
Participation in the Minerals Security Partnership could improve African countries’ access to capital and arrangements with buyers (off-take markets) and present “interesting opportunities to collaborate on technology sharing”, said James Mnyupe, economic advisor to President Hage Geingob and one of the ministerial meeting participants.
I think now they are taking interest to see how they can partner, but also help us, in terms of leveraging technology in this sector.
“For countries like us, that’s very important because deploying blended financing in a manner that reduces the cost of capital for these endeavours is a big part of the process of de-risking the production of the minerals that are needed, so financing was definitely mentioned and not just by the US, but by Australia and the European Union as well,” Mnyupe said.
For Tanzanian foreign minister Liberata Mulamula, the partnership represents America’s biggest involvement in the African minerals sector since passage of the 2010 Dodd-Frank Act requiring US-listed companies to disclose their use of “conflict minerals,” that is, tin, tungsten, tantalum and gold.
“I think now they are taking interest to see how they can partner, but also help us, in terms of leveraging technology in this sector,” Mulamula said.
“They are saying it’s important to have the link between the mineral production and the energy sector transition, the green economy, so they’re looking at the issue of value addition, recycling, processing, that adheres to the standards, the benchmarks,” she said.
Zambia’s Mulenga said he’s convinced “beyond a reasonable doubt” that the US is serious about developing an African minerals processing industry.
“We just want to thank Secretary Blinken for bringing this meeting together,” he said. “It just shows exactly that they are thinking ahead, and seeing where they can tap opportunities and support countries like mine.”
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