Search

Biden's overseas mineral strategy faces early test - E&E News

ersamoyor.blogspot.com

The Biden administration wants minerals needed to build out electric vehicles and green the grid. Mineral-rich African countries could be where it finds them.

White House officials hope to put down payments on projects that help shore up lagging supply chains in the United States, while at the same time showing that this country is serious about supporting a continent that holds a third of the world’s critical minerals and has for a decade been the recipient of Chinese investment.

That effort will test the Biden administration’s commitment to meaningful investments that don’t just benefit governments and private industry. Top Biden officials often downplay the idea of taking aim at China, which dominates global mineral supply chains that often start in mines in African countries such as the Democratic Republic of Congo. And yet any U.S. investment will compete with China’s Belt and Road Initiative, which has built out infrastructure in Africa and other developing regions.

Advertisement

Instead, officials say, the goal is to secure, open up and diversify markets crucial to U.S. and global climate goals while forging deals that enrich African countries — all while meeting high labor and environmental standards that critics have long complained are absent from Chinese deals.

“That is what the United States is offering our African partners,” said Amos Hochstein, President Joe Biden’s coordinator for global infrastructure and energy security. “A partnership that invests not only in African critical minerals, but invests in African communities.”

Right now, the administration is mulling key investments, such as helping build a railroad that will cross the continent and showing political support for a nickel processing plant in Tanzania. This is part of a larger diplomatic strategy that’s generated scores of new deals worth upward of $6 billion focused on energy, food security, infrastructure and digital connectivity as Africa faces the brunt of climate change.

International experts say both climate and national security concerns are fueling the U.S. focus on Africa. China’s long-standing presence there is also obviously front of mind, they argue.

Africa has “climbed up on Washington’s foreign policy priority list after what must be seen as a decadelong period of utter neglect,” due to both climate and security considerations, said Tim Zajontz, a research fellow in the Centre for International and Comparative Politics at Stellenbosch University in South Africa.

“Besides more traditional security concerns over growing Chinese and Russian influence on the continent, Washington and other Western governments have become increasingly concerned about Chinese dominance of so-called critical value chains, of which some originate in African mines,” said Zajontz, who also lectures in global political economy at Technische Universität Dresden.

What’s more, the administration faces challenges both at home and abroad.

Republicans have repeatedly criticized the administration for not focusing enough on domestic mining as they look for the minerals necessary for the energy transition, and have called for more details around deals the White House is pursuing abroad.

At the same time, the government is pushing for deals in countries where mining has historically been associated with environmental and labor abuses instead of driving prosperity. Adding another layer of difficulty is that China has invested heavily in specific African countries, with Chinese financiers signing more than $150 billion worth of loans with African governments and state-owned enterprises, according to the Boston University Global Development Policy Center, much of it in power infrastructure, mining, roads, ports and railways.

Tom Sheehy, a fellow with the Africa Center at the U.S. Institute of Peace, a nonpartisan, independent institute established by Congress, said past investments have not necessarily changed the lives of ordinary Africans, who too often live and work in impoverished conditions.

“The history is not good for critical minerals. Going back centuries, we’ve seen natural resources extracted from Africa that have … benefited elites and those who are doing the extraction, but there’s been very little local development,” said Sheehy. “I credit the administration for making the effort. Whether or not they have sufficient resources to succeed is a big question. … It’s not going to be easy.”

‘Wins on the board’

Vice President Joe Biden talks with State Department Special Envoy for International Energy Affairs Amos Hochstein as they join other Caribbean leaders for a working lunch during the Caribbean Energy Security Summit, at the State Department in Washington, Monday, Jan. 26, 2015. (AP Photo/Pablo Martinez Monsivais)
Then-Vice President Joe Biden in 2015 talking with State Department special envoy for international energy affairs Amos Hochstein as they join Caribbean leaders for a working lunch during an energy summit. Hochstein is now President Biden’s coordinator for global infrastructure and energy security. | AP Photo/Pablo Martinez Monsivais

Biden in May revealed at a meeting in Japan that the U.S. International Development Finance Corp., the government’s development bank, is studying a $250 million financial package for an initial investment in a railroad for the so-called Lobito Corridor.

The funding would help expand a railway and connect the Democratic Republic of Congo, the world’s largest producer of cobalt used in lithium-ion batteries, and copper-rich Zambia, with global markets through a port in Angola. The administration said it’s also looking for opportunities to connect the corridor to Tanzania and, ultimately, the Indian Ocean.

Funding for the rail line is part of the Partnership For Global Infrastructure and Investment, or PGII, an initiative among the G-7 — the United States, the United Kingdom, Canada, France, Germany, Italy and Japan, along with the European Union — aimed at boosting infrastructure in developing countries and countering China’s efforts.

And in April, Vice President Kamala Harris during a trip to Tanzania announced that the U.S. government had forged a partnership between Lifezone Metals and TechMet, a critical minerals company partially owned by the federal government through the International Development Finance Corp.

Lifezone, a metals supply chain, development and technology company that has the backing of mining giant BHP, has entered into a partnership with the Tanzanian government to build a nickel processing plant and produce battery-grade nickel for electric vehicles in the United States and around the world as soon as 2026.

Those developments are landing within months of the State Department’s inking a memorandum of understanding (MOU) to help build up an EV battery supply chain in Congo and Zambia. And the Energy Department last year announced a conditional loan guarantee for a Louisiana graphite processing plant that will rely on metal mined in a region of southeastern Africa that’s been plagued by violence from an Islamist insurgency.

But Eric Olander, editor-in-chief and cofounder of the China Global South Project, said the United States needs to turn ambitious plans into concrete developments.

“What we need are wins on the board,” Olander said during a recent panel discussion in Washington hosted by the U.S. Institute of Peace. “The proof points are what people are going to judge us on, and if we only have aspirations, if the MOU doesn’t come through, or PGII doesn’t follow through, which has been our past 20, 30 years now in Africa, then no one’s going to believe us.”

A U.S. 'proposition'

Chinese and Ivorian technicians work on the construction site of a new container terminal at the Port of Abidjan in Côte d'Ivoire, in West Africa, on March 27, 2019. - The modernization of Abidjan Port which started in 2012 are led by Chinese engineers and workers whose country finances up to 1,100 billion FCFA (1.67 billion euros). (Photo by ISSOUF SANOGO / AFP) (Photo credit should read ISSOUF SANOGO/AFP via Getty Images)
Chinese and Ivorian technicians work on the construction site of a new container terminal at the Port of Abidjan in Côte d'Ivoire, in West Africa, on March 27, 2019. | Issouf Sanogo/AFP/Getty Images

China looms large in the global EV supply chains, processing and refining about 70 percent of the world’s cobalt, the majority of it from the Democratic Republic of Congo. China also processes about 35 percent of the world’s nickel, up to 70 percent of lithium, and nearly 90 percent of rare earth elements used around the world, according to the International Energy Agency.

China is also poised to dominate Africa’s growing lithium market, according to U.K. mining data firm Benchmark Mineral Intelligence, even as countries like Namibia and Zimbabwe move to ban exports of raw metal.

Experts caution that China’s presence in Africa is not straightforward or monolithic, but instead is concentrated in certain areas through complex arrangements. The United States needs more expertise, a nuanced approach and the resources to prove it can be a good alternative partner, they said.

Olander said China is invested heavily in countries like Guinea, Zambia and South Africa, a central hub for mining, along with Zimbabwe, which is emerging as a major player in lithium, and cobalt-rich Congo. But he said discussions and coverage of China’s role — especially on Capitol Hill — are often “distorted, borderline bad, and oftentimes just wrong.”

For its part, the White House is offering up a carefully crafted message, emphasizing that it’s pushing a new way of doing business through private and public funds that will ensure African countries also benefit.

White House clean energy and climate adviser John Podesta said at a recent Wilson Center event that the United States is focused on transparency, labor protections and avoiding human rights violations, particularly in mining sectors. “There’s a proposition that the markets of Europe and the the U.S, Canada, Australia, etc., are open to products from those countries, and I think that’s a competitive advantage that we have in terms of the development model that’s going to be attractive in many, many places,” said Podesta.

Hochstein said PGII has already seen remarkable success globally, making historic investments in low- and middle-income countries, spanning renewable energy and expanding digital access as well as new railways and ports. Last month, for example, the administration through PGII invested nearly $1 billion to support construction of two solar plants in Angola, a project touted as a way to create hundreds of jobs while helping Africa meet climate goals.

“Countries can make their own judgment: If, after over a decade of investment in mining and infrastructure, they are heavily indebted, their workers walk home on a dark road to a home without electricity, a town without a hospital and a city without a school, maybe it’s time for a different investor,” said Hochstein.

Calls for transparency

A person carries wet cobalt on his back at the Shinkolobwe cobalt mine in the Democratic Republic of Congo in 2004.
A person carries wet cobalt on his back at the Shinkolobwe cobalt mine in the Democratic Republic of Congo in 2004. | Schalk van Zuydam/AP Photo

Yet the administration’s work abroad is spurring calls for a more coordinated and transparent approach across the federal government.

A dozen environmental groups, including Oxfam and Friends of the Earth, for example, are pushing the International Development Finance Corp. to adopt stronger environmental and social policies to protect marginalized communities, Indigenous communities and land rights holders before doling out money. The Biden administration, they say, must uphold the right of free, prior and informed consent, require more extensive financial disclosures and ensure that African communities benefit from any project receiving U.S. support.

Maria Ramos, associate director for extractive industries at Oxfam America, said the concern is that federal agencies flush with money from the Inflation Reduction Act approved last year and 2021's bipartisan infrastructure law don’t have the safeguards in place when they review project proposals and see impacts across the entire value chain.

“Our main concern is that all of this is happening in a fast-tracked and uncoordinated way,” said Ramos. “There's this urgency because it's under the banner of the climate crisis, but without necessarily having the safeguards in place.”

Pooja Jhunjhunwala, a spokesperson for the International Development Finance Corp. (DFC), said any project that receives support must meet the agency's eligibility criteria, and is evaluated to identify and mitigate possible social, environmental and economic risks using studies, a sponsor's track record, proof of equity, local support and offtake and supply contracts.

"DFC monitors all active projects for environmental and social policy compliance and development impact results and manages its credit portfolio, from the first transfer of funds after origination through disbursement until maturity," said Jhunjhunwala.

Those protections are critical in Africa.

The Business & Human Rights Resource Centre recently found scores of alleged human rights abuses in countries like Zambia and Congo directly tied to the mining sector, and recommended ways to avoid those outcomes.

Joseph Kibugu, a Nairobi-based researcher and representative for the group, said that while the continent is flush with critical minerals, many people live without basics like electricity and are not benefiting from mining projects in their own backyards.

“How do we make sure this transition does not happen on the backs of communities?” said Kibugu. “As we scale up on the continent and elsewhere, how do we make sure the transition is not just fast, but also just?”

'Nose under the tent'

Zimbabwe lithium mine
An aerial view showing part of the blast work done at the Arcadia lithium mine in Goromonzi, Zimbabwe. | Tafadzwa Ufumeli/Getty Image

Infrastructure development in Africa hasn’t been a top priority for previous U.S. administrations, said Zajontz, except for former President Barack Obama’s Power Africa initiative, which he said remained far behind its own ambitions.

China, at least in part, is responsible for the renewed interest in Africa. Zajontz said Washington is keen to prevent situations in which Chinese firms control critical supply chains, from the mines to the ports, mainly due to concerns that they could be leveraged by Beijing should relations with the West deteriorate.

Melissa Barbanell, director of U.S.-international engagement at the World Resources Institute, said China is expected to pull back in terms of investment due to debt sustainability concerns and the administration’s efforts — from the rail line to the nickel processing plant — make sense.

“These projects are the U.S. getting a nose under the tent,” said Barbanell. “The U.S. is showing that it can be a good partner to Africa.”

Chris Showalter, CEO of Lifezone Metals, said that his company’s mine-to-metal operation in Tanzania aligns with the Biden administration’s goals of boosting resources for EVs while achieving high environmental and labor standards.

Lifezone, which recently merged with a special purpose acquisition company, GoGreen Investments Corp., plans to mine for nickel, cobalt and copper at a large and high-grade undeveloped nickel sulfide deposit in northwest Tanzania. This work will be done with Tembo Nickel Corp., a Tanzanian company developing the mine and processing plant.

The company then plans to refine the minerals by using a proprietary process that involves using an aqueous solution to remove metals from their ores, which Showalter said will use hydropower and produce lower emissions compared with other processing facilities. Showalter asserted that Lifezone will work to adhere to strong environmental and social standards to ensure meaningful engagement with all people affected by the project.

Showalter said that hydrometallurgy, which involves the use of chemistry to recover metals, is a proven technology used at commercial scale. Lifezone, he added, has “reconfigured” that process to maximize its benefits for nickel — something that has not yet been used at commercial scale.

But the project also underscores the complexities of U.S. engagement in Africa. The federal government has brokered a partnership between Lifezone and TechMet, which lists the International Development Finance Corp. as one of its largest shareholders. But TechMet is not currently involved in the Tanzania project. Brian Menell, TechMet's CEO and chair, said his firm believes the partnership will identify other critical mineral "opportunities" in the region.

The Biden administration's focus is also on infrastructure to openly move minerals and metals to global markets, a point made clear by the Lobito railway.

Olander with the China Global South Project said it’s the “dream of the United States to make” the Lobito port in Angola the next major hub for global goods and replace the Port of Durban in South Africa, which has been shut down three times in the last year because of natural disasters and political unrest.

“Right now, there are basically three ports of exit for most of the cobalt that’s coming out, and this is going to be the focus for the U.S. government, is now to build new supply chains that get away from the port of Durban,” said Olander.

The railway would link the deepwater port of Lobito with resource-rich Zambia and southern Congo, said Zajontz with Stellenbosch University. Mining firms, he said, have long eyed the corridor as an alternative route, but the line continues to face capacity constraints and gaps between the existing railway corridor and some mines in Zambia.

The U.S. government, said Zajontz, evidently considers the planned investment as a way to secure and improve open access to one of the world’s most important mining regions. He noted that the railway, along with reaching Congo and its cobalt, would also access the central African Copper Belt, which has huge copper reserves. While trade in minerals is global, Zajontz said the push among Western countries to home-shore and de-risk supply chains could pull those materials to Europe and the United States.

But Zajontz also noted that the investment of $250 million is nowhere near enough money to finish the Lobito rail line and close remaining gaps in the system, the cost of which could surpass $1 billion. Instead, the funding can be seen as “knock-on financing” intended to lure in private investment along the corridor and improve access to important mining areas.

”Africa’s growing geoeconomic importance and the intensifying competition between China and the West over the continent’s minerals actually provides a window of opportunity for African governments to demand that foreign investments contribute towards the development and diversification of local economies,” he said.

Reporter Sara Schonhardt contributed to this article.

Adblock test (Why?)



"strategy" - Google News
July 18, 2023 at 12:25AM
https://ift.tt/gQf8Jwv

Biden's overseas mineral strategy faces early test - E&E News
"strategy" - Google News
https://ift.tt/J7wHIDC
https://ift.tt/nQCkm93

Bagikan Berita Ini

0 Response to "Biden's overseas mineral strategy faces early test - E&E News"

Post a Comment

Powered by Blogger.