Africa has huge role in US critical mineral strategy, says Wally Adeyemo

Marikana — The US is looking to Africa to help loosen a Chinese stranglehold on battery metals and reduce Russia’s influence over the market for other minerals, US deputy treasury secretary Wally Adeyemo said on Thursday.

The fallout from the coronavirus pandemic fallout and the war in Ukraine have sent Western governments scrambling to reduce their reliance on Chinese supply chains and disentangle their economies from Russia.

But as Washington plots a course for its energy transition it is lagging behind China, which has spent the past decade securing access to minerals needed for the production of products such as electric vehicle batteries and solar panels.

“We don’t want to be overly reliant on any one country or any one company for global supply chains for critical minerals,” Adeyemo said during a visit to Sibanye-Stillwater’s Marikana platinum group metals mine.

While the US government has undertaken a raft of measures to incentivise increased production of strategic and critical minerals at home, notably under the Inflation Reduction Act, Adeyemo acknowledged that overseas resources were also vital.

“Africa is going to play a huge role,” he said. “A lot of critical minerals are located here.”

Chinese assets in Africa already include huge copper and cobalt projects in The Democratic Republic of Congo and Zambia as well as lithium in Zimbabwe, where companies are assisted by substantial Chinese state investment in accompanying infrastructure.

Adeyemo said the US was working with G7 allies to close that infrastructure gap.

The US International Development Finance Corporation is, meanwhile, aiming to derisk private investment in Africa. And Adeyemo said Washington was incentivising US manufacturing to boost demand for those minerals and create favourable market conditions for miners.

But he added that the White House also stood ready to ensure a level playing field.

“We are talking to our European allies ... about some of the actions we can take using trade tools to make sure that a country like China can’t flood the market with things like electric vehicles and solar panels,” he said.

Accountability

Regarding Russia, Adeyemo said countries such as SA also had a role to play.

In the wake of Moscow’s invasion of Ukraine in February 2022, the US government imposed sanctions on a number of Russian miners and mineral exports. But it left Russian platinum group metals (PGMs) largely untouched.

The US is a major consumer of palladium, a PGM used in catalytic converters, with 32% of its imports of the metal coming from Russia between 2019 and 2022, according to the US Geological Survey.

“SA has a real opportunity to help supply the global economy,” Adeyemo said. “And it gives us the ability to take other actions to hold Russia accountable.”

SA is a major palladium producer, and Sibanye-Stillwater mines the metal both in Marikana and at a US project in Montana.

“Between what comes out of SA and what’s produced in the US, the US doesn’t need to be dependent on sources from any other country,” Sibanye-Stillwater CEO Neal Froneman said.

However, he said companies such as his needed US government support.

“You can provide loans or introduce tariffs or whatever it might be,” he said. “That is a role that they need to think very differently about and help companies that are trying to source and provide these critical metals into those ecosystems.”

Reuters