OPINION:
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Faced with growing global demand and China’s control of many supply chains, the U.S. is becoming increasingly concerned about its access to critical minerals. Our security demands reliable supply chains for the 50 minerals the government deems critical [usgs.gov], including cobalt, graphite and manganese.
These minerals are essential to every aspect of the modern economy, including consumer electronics, batteries, jet engines, medical supplies, satellites, solar panels and turbines, and defense systems. Yet the U.S. heavily relies on China for many of these minerals.
This vulnerability has put a U.S. spotlight on mineral-rich Africa. Many African countries possessing abundant critical minerals are attracting worldwide investment, especially from China. These trends will significantly affect African development and U.S. economic and national security, as captured in the recent report “Critical Minerals in Africa” from the U.S. Institute of Peace (usip.org).
Unfortunately, natural resource development in Africa has a troubling history. Mineral extraction on the continent has too often fueled corruption, human rights abuses, environmental degradation and even violent conflict. While Africans are understandably looking to seize this economic opportunity, the “natural resource curse” looms large.
Despite these risks, Africa’s critical minerals will be developed as global demand increases. The issue is how — in ways that contribute to economic growth, social advancement and peace? Or that sow the seeds of discontent and conflict? It will not be easy, but our report highlights the potential of the U.S. government to successfully facilitate partnerships that boost African economic development and diversify U.S. critical mineral supply chains.
The first step toward this goal is recognizing that the U.S. is playing from behind in Africa — far behind. It’s not just China that has been investing in Africa; the U.S. has discounted the continent for decades. Turkey, the United Arab Emirates, Saudi Arabia and other countries have bet on Africa. U.S. mining and related companies, by contrast, have a small African presence.
Africa presents a challenging business environment that deters U.S. investment. Most African countries have poor infrastructure. The rule of law is generally weak. And the competition sometimes plays by different, often underhanded rules. Expanded and invigorated “commercial diplomacy” is needed to interest and help U.S. companies compete in Africa.
The U.S. doesn’t — nor should it — operate like China, spending hundreds of billions of government dollars to support projects overseas. The U.S. private sector must lead. But U.S. government efforts are often needed for American companies to overcome the challenges of doing business in Africa. More focused and efficient support of mining and related infrastructure by the U.S. International Development Finance Corp., Export-Import Bank, Trade and Development Agency and other relevant U.S. government agencies would help. The State Department and the U.S. Commercial Service are badly under-resourced in Africa, shortchanging commercial diplomacy on behalf of U.S. companies.
The Biden administration has recently made critical minerals a focus of its Africa policy, highlighted by the Lobito Corridor project. Aiming to catalyze private investment, this is the largest U.S. infrastructure effort in Africa in years, focused on moving critical minerals and other products through Zambia, the Democratic Republic of Congo and Angola. But this project is just the start of developing the focus on critical minerals in Africa.
Effective commercial diplomacy means being realistic about China in Africa. Many African countries value investment by U.S. mining and related sectors because they are perceived as operating with higher environmental, labor and transparency standards. China is known for “getting things done” and acting with dispatch, which Africans value. Badly needing investment and jobs, Africans do not view U.S. and Chinese investment as an either-or proposition. They want both. But if Africans are forced to choose, U.S. mining companies may remain on the outside, looking at Chinese-dominated mining ecosystems in Africa.
The Inflation Reduction Act is reshaping critical mineral supply chains and investment decisions worldwide. African countries are major players in these markets. Yet Africa is an afterthought in U.S. trade and investment policy. The African Growth and Opportunity Act, which expires next year, could address African concerns over the act’s exclusion of incentives for critical mineral production in Africa.
Critical minerals will be developed in Africa. The demand exists, as do the investors. Can U.S. companies succeed in these challenging business climates, building productive partnerships with Africans through high-standard investment while avoiding the common pitfalls of natural resource development?
It will be a major challenge, but our report concludes that it is worth the effort for the United States. A more focused and sustained public-private partnership in Africa will help to secure the critical minerals that are essential for the economic prosperity and national security of our country.
• Thomas P. Sheehy is a distinguished fellow at the U.S. Institute of Peace’s Africa Center.
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