The United States is turning to Africa to lessen its dependence on China for critical minerals and weaken Russia’s influence in the market. This comes amid growing concerns about the vulnerability of Western supply chains.
Shifting Strategies
The ongoing war in Ukraine and the aftermath of the pandemic have highlighted the need for the West to diversify its sources of critical minerals. These minerals are essential for various clean energy technologies, including electric vehicles and solar panels.
While the U.S. has implemented measures to boost domestic production through the Inflation Reduction Act, Deputy Treasury Secretary Wally Adeyemo acknowledges the crucial role Africa plays.
“Africa holds vast reserves of critical minerals, making it a key player in this sector,” Adeyemo said during his visit to a South African platinum mine.
China’s Dominant Position
China has been proactive in securing access to these minerals through significant investments in African mines. Chinese state-backed companies hold substantial stakes in copper and cobalt projects in the Democratic Republic of Congo and Zambia, along with lithium mines in Zimbabwe.
To counter this, the U.S. is collaborating with G7 allies to bridge the infrastructure gap that hinders African mining operations. Additionally, the U.S. International Development Finance Corporation is working to mitigate risks for private investments in the continent.
Incentivizing American Production
The U.S. government is implementing a two-pronged approach. Firstly, it’s offering incentives to boost domestic manufacturing of critical minerals. This creates a market for African resources and fosters favorable conditions for miners.
Secondly, the White House is prepared to intervene if necessary. “We’re discussing measures with European allies to prevent China from flooding the market with electric vehicles and solar panels,” Adeyemo stated.
The U.S. is urging South Africa, a major producer of palladium, to step up and help reduce reliance on Russia. Following sanctions imposed on Russia for its invasion of Ukraine, the U.S. left palladium largely untouched due to its dependence on the metal for catalytic converters.
“South Africa has the potential to be a significant supplier to the global market,” Adeyemo highlighted. “This would allow the U.S. to take further actions to hold Russia accountable.”
Collaboration is Key
South African mining companies like Sibanye-Stillwater, which operates mines in both South Africa and the U.S., believe government support is crucial.
“Government intervention through loans, tariffs, or other measures can significantly aid companies like ours in supplying critical metals,” said CEO Neal Froneman.
The U.S. acknowledges the need for a collaborative effort with African nations and its allies to achieve a more balanced and secure supply chain for critical minerals. This strategic partnership holds immense potential to reshape the global energy landscape.
Source: Reuters
