A report from the United States Institute of Peace has emphasized the urgent need for the U.S. to strengthen its commercial connections with African nations to curb reliance on China for supplies of critical minerals.
According to Reuters News, the U.S. economic and national security depend on securing a reliable supply of critical minerals, including from Africa.
The report noted that the U.S. is almost 100% reliant on foreign entities of concern, mainly China, for key critical minerals, and must come up with own sources of supply to avoid being vulnerable to China’s export curbs.
Western mining companies
According to the report, Western mining companies are lagging Chinese rivals in the race to tap Africa’s abundant mineral resources, key to sectors from electric vehicle manufacturing to defence industries.
- “{To counter China’s head start in Africa, Washington must roll out more vigorous commercial diplomacy with a keen eye toward building critical minerals partnership in Africa,” the 76-page report said.
One option for the U.S. would be to increase commercial diplomacy in countries such as Democratic Republic of Congo, the world’s No. 1 cobalt supplier, and Zambia, Africa’s second-largest copper producer, the report said.
The competition for securing minerals in Africa is heating up as cash-rich Middle East firms join the race.
It noted that while Western mining companies still see hurdles in investing in countries such as Congo, which lacks vital infrastructure such as roads and adequate electricity, Chinese miners have strengthened their grip in the country and are broadening investment throughout Africa.
International Development Finance Corporation
According to the report, the International Development Finance Corporation said in February that it could scale up project financing in Africa to help reduce the risk of investing in countries, open new vistas of opportunities on the continent, including in Congo which some investors still perceive as high risk.
U.S. stocks closed essentially unchanged on Monday, ahead of crucial inflation data and the kick-off of first-quarter earnings season.
Unlocking U.S. investment in Congo could be helped by reopening its consulate in Lubumbashi that closed in the 1990s after the end of the Cold War, the report further said.
The government also needs to prioritize full development of a memorandum of understanding with Congo and Zambia which could help guide U.S. private investors across the battery metals supply chain, it said.
The U.S. has stepped in to back the Lobito Corridor, a rail link from the central African copper belt that’s key to export of metals through Angola’s Lobito port.
The U.S. is simply not on, or even close to competing with China for critical minerals investment and diplomacy in Africa, and needs to take a vigorous approach, according to the report .
According to the report, Jose Fernandez, the U.S. State Department’s Undersecretary for Economic Growth, Energy, and the Environment, said last month the U.S. holds regular talks with Congo state miner Gecamines.
Still, the U.S. government is unlikely to match the resource levels and the mining ecosystem that China wields in winning mining contracts, the report added, nothing that “concerted U.S. efforts to land U.S. mining investment in Africa can succeed.”
