美国与非洲矿业合作的前景 Prospects for U.S. Minerals Engagement with Africa 20230831

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ProspectsforU.S.MineralsEngagementwithAfrica

Photo:poco_bw/AdobeStock

Commentaryby

GracelinBaskaran

PublishedAugust29,2023

Intheracetosecurecriticalmineralsfortheenergytransition,theUnitedStatesislookingabroadtocounterthedominanceofChina.EveniftheUnitedStatesweretodramaticallyimproveprospectsfordomesticmining,thereisnowaytomeetgrowingglobaldemandwithoutalargerandmorediversesupplychain.ThatiswhytheUnitedStateshasbeguntoformplurilateralandbilateralpartnershipsandextendedtaxcreditsandsubsidiesformineraldevelopmentincloselyalliedcountries.

Butoneregion—oneofthemostwell-endowedwithcriticalminerals—hasbeenleftoutofthepartnerships,tradedealsandotherdiscussions.

Africa’sexclusionisakeyshortcominginglobalcriticalmineralsefforts.Accordingtointernalcalculations,thecontinenthasroughly85percentoftheworld's

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manganese,80percentoftheworld'splatinumandchromium,47percentofcobalt,21percentofgraphite,and6percentofcopper.Despitesuchreserves,the

miningexplorationbudgetinSub-SaharanAfricawasthesecondlowestinthe

world—roughlyhalfthatofLatinAmerica,Australia,andCanada.

StrengtheningU.S.commercialdiplomacywiththeAfricancontinentshouldbeakeypriorityinamineralsstrategy.Historically,theUnitedStateshasnotmaintainedstrongcommercialdiplomacytieswiththecontinent,withKenyaandSouthAfricabeingtheexceptions—thisstandsoutincontrastthatwithChineseeffortsthatbegandecadesago.

HerearethreerecommendationsforstrengtheningtheU.S.-Africapartnershiponthecriticalmineralsagenda:

1.CollaboratewithAfricanCountriesthroughtheMineralsSecurityPartnership

MSPcountriesneedtoworkwithproducerstoensurethatcollaborationwillcreatesocioeconomicbenefits,includinginfrastructureinvestments,employmentgeneration,andfiscalrevenue.Ideally,theMSPwillexpandtoincludeproducingcountriestocreateamoreequalpartnership.Atpresent,theMSPonlyincludesWesterncountries,India,andtwohigh-incomeandadvancedEastAsiancountries.BringingAfricancountriesintotheMSPcanencourageinvestmentsintheirextraction,processing,andvalue-additioncapacitybyotherMSPcountries.

ExistingMSPcountriesarelikelytoloseaccesstoAfricancriticalmineralswithoutbuildingdomesticmineralprocessingcapacityinthesecountries.Thisisbecauseanincreasingnumberofresource-richAfricancountriesarebanningtheexportofrawcriticalminerals.

Inthelast9months,Namibia,Ghana,andZimbabwehavebannedtheexportofunprocessedcriticalminerals,includinglithium.Zimbabwehasthe

sixth-largest

lithiumreservesintheworldand

largestinAfrica

.Namibiahasaheavyrare

earthsoperationthatproduces2,000tonsperyearofrareearthoxidesandhas

richdepositsoftwoofthemostvaluableheavyrareearthmetals—dysprosiumandterbium.Ghanarecentlydiscovered

commercialquantities

oflithium.Thesecountriesalsohavequantitiesofcobalt,manganese,nickel,andgraphite.

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ItislikelyotherAfricancountrieswillfollowsuit.Thereisprecedentforit.Forexample,Tanzania—whichishometothefifth-largestreserveofgraphiteintheworld—imposedan

exportban

ongoldorein2017.

Bringingresource-richAfricancountriesintotheMSPenablesthemtocometothecriticalmineralstablesasequalsandcancreateaconduciveenvironmenttoinvestmentandtrade.

2.ExpandTradeAgreements

TheUnitedStatesshouldconsiderextendingtheInflationReductionAct(IRA)benefitstoresource-richAfricancountries.TheIRAsetsamarketvalue-basedtargetforbatterycriticalmineralcontent.In2027,foranelectricvehicletobetax-crediteligible,

80percent

ofthemarketvalueofcriticalmineralsinitsbatterymustbesourceddomesticallyorfromU.S.free-tradepartners.

Thelithium-ionbatteriesthatareusedfornearlyallelectricvehiclesusefive

criticalminerals:lithium,nickel,cobalt,manganese,andgraphite.Africahas

approximately21percentofgraphitereserves;47percentofcobaltreserves;and85percentofmanganesereserves.Itcurrentlyhas4percentoftheworld’slithium—butthisisexpectedtoincreaseto12percentoverthenextdecadeowingtodiscoveriesofnewreserves.Thecontinenthas5percentoftheworld’snickelreserves.

IfAfricanmineralscouldcontributetoIRA-backeddeploymentintheUnitedStates,itcansignificantlyimprovetheircommercialattractivenessandincentivizeinvestmentinexploration,production,andprocessing.

Thereisagoodcommercialcaseforit.Explorationhasyieldedgoodreturnsonthecontinent.Africawashometo40percentoftheworld'sgasdiscoveriesbetween2010and2020.

Aspecificagreementcouldbesigned,similartothebilateralagreementthatwassignedearlierthisyearwithJapantodevelopasupplychainforcriticalmineralsrequiredinelectricvehicleproduction.InthelongertermtheUnitedStatescouldsignafreetradeagreement(FTA)withtheAfricanContinentalFreeTradeArea(AfCFTA).

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AnFTAcouldreplacetheAfricanGrowthandOpportunityAct(AGOA),whichwentintoeffect23yearsago.AGOAisaunilateraltradepreferenceprogramthatgivesAfricancountriesacompetitiveedgebyprovidingduty-freeexportsfor6,500productsfromAfricatotheUnitedStates,andisupforrenewalin2025.ReplacingitwithanFTAmakestradebetweenAfricaandtheUnitedStatesmutuallybeneficial—itallowsAfricancountriestobenefitfromtheIRAandstrengthenstheUnitedStates’criticalmineralssecurity.

ReplacingAGOAwithanAfCFTAcanalsoincentivizebypassingChinaasanintermediary.MostAfricancommoditiesareexportedtoChinabeforebeingprocessedandexportedtotheUnitedStatesandotherMSPcountries.In2021,theDemocraticRepublicoftheCongo(DRC)exported

$4.4billion

ofcobalt—and

100percentofitwenttoChina

.Itthenprocessesit,manufacturesgoodsusingit,andsellsashareofittotheglobalmarket.Cobaltisakeyinputforlithium-ion

batteriesandChinaisthebiggestexporterofthesebatteries.Chinaexports19.8

percentworld’slithium-ionbatteries—twiceasmuchasthesecond-largest

exporter,Singapore.

ThisposesasignificantrisktotheUnitedStates,asChina'suseofexportrestrictionsisrapidlyrising.Whenlookingatthelatestavailabledatafromthe

OrganizationforEconomicCooperationandDevelopmentin2021,Chinahad35

naturalresourceexportrestrictions,comparedwith17fromRussiaandzero

fromtheUnitedStates,Australia,andEuropeancountries.Therapidaccelerationofexportrestrictionsisconcerning.From2009to2020,Chinaincreaseditsexportrestrictionsoncriticalmineralsbya

factorofnine

,includingnonautomaticlicensing,exporttaxesandexportbans.Thus,reducingandeliminatingChina'sroleasanintermediaryisakeysteptostrengtheningcriticalmineralssecurity.

3.LeverageEconomicDiplomacyInstruments

TheUnitedStateswillneedtodevelopasuiteofeconomicdiplomacyinstrumentswithAfricancountries.U.S.financingandde-riskingcanmobilizeinvestmentsneededtoincreaseproduction.Onefactbearsrepeating:in2021,

theminingexplorationbudgetinSub-SaharanAfricawasthesecondlowestin

theworld.Significantlyincreasingexplorationiscritical.

Goodeconomicdiplomacyismutuallybeneficial.U.S.financingupstreamand

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downstreamvaluechaindevelopmentcanincreasefiscalrevenueandgeneratejobsinAfricancountries,bothofwhicharecriticaldevelopmentobjectivesforacontinentthat’sexperiencingasimultaneous

debtcrisis

andpopulationboom(by2050Sub-SaharanAfrica'spopulationisforecastedtoapproximately

double

from1billionto2billion).

Theprivatesectorhasacriticalroletoplayinscalingupextraction,processing,andmanufacturing.AttheAfricaBusinessForumin2022,aCalifornia-basedexplorationfirm,KoBoldMetals,whichusesartificialintelligenceandmachinelearningtoidentifybatterymetaldeposits,announceda

$150million

investmenttoexploreanddevelopacoppermineinZambia.

ItwilluseartificialintelligencetoolstocosteffectivelyprocessdrillingdataandoptimizecopperandcobaltexplorationatMingombaMine,whichisontracktobeatop-tiercoppermine.KoBoldisseekingtoapplythesetoolstoadditionalminesintheregion.

TheU.S.ambassadortoZambia,

MichaelGonzalez

,evencalledthis“investmenta“perfectexampleoftheUnitedStates’effortstocatalyzeinvestmentsinstrategic,critical-mineralsprojectstobuildmoretransparent,predictable,secure,andsustainablecritical-mineralsupplychains.”

TheprivatesectorwillneedtoworkhandinhandwiththeU.S.governmentandacoordinatedgovernmentapproach,similartoPowerAfrica,iskey.PowerAfricanistheU.S.governmentinitiativetodoubleaccesstoelectricityinSub-SaharanAfricaandbringstogether12U.S.governmentdepartmentsandagenciestobringenergyprojectstofruitionbyprovidingfinancing,insurance,andtechnicalassistance.

Acoordinatedpublic-privateapproachcanadvancethememorandumofunderstatingthattheUnitedStatessignedwiththeDRCandZambiatopromotea

regionalmine-to-assemblyEVbatteryvaluechain

.Amemorandumofunderstandingrequiresinvestmenttobringitintoaction.

Conclusion

TheunprecedentedrushtocreateasecuresupplyofcriticalmineralshasputtheAfricancontinentoncenterstage.GivenAfrica'swealthinkeyresources,itwillbe

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difficulttoreachnetzerowithoutit.Thecirculareconomyalonewillnotmeetdemand.

ThisnecessitatestheUnitedStatescreatingamorestrategicandfairpartnershipwiththecontinent,whichwillrequirelevelingtheplayingfieldandengagingwithAfricancountriesonequalterms.

Asisthecasewithanynewrelationship,therewillbethingsthatneedtobeironedout.TheUnitedStateswillneedtoprovidetechnicalassistancetogovernmentsonregulationsandoversightforgoodenvironment,social,andgovernancepracticesinthecriticalmineralsvaluechain.

Africaisperhapsthelastfrontierofmineraldevelopment,andtheUnitedStateshasapowerfulopportunitytobeapartofit.

GracelinBaskaran