With the continent’s “geopolitical stock” on the rise, observers see African countries becoming more assertive in negotiating mineral deals with external actors, and resorting to resource nationalism “in some economies where we see an insistence on local processing, more stringent local content requirements and generally attempts to integrate these critical mineral supply chains with a broad drive for industrialization.”

Most recently, Kenya is making headlines with legislation pending that would establish a Mining Regulatory Authority to replace the current Mining Rights Board, which would, unlike its predecessor which was an advisory body, “control the exploration, extraction, production, processing, refining, transportation, storage exportation, importation and sale of minerals.”

Kenya is home to significant deposits of copper, graphite, manganese, nickel and iron ore, demand scenarios for which are surging.

With the coronavirus pandemic spotlighting supply chain security issues for critical minerals and against the backdrop of ever-increasing demand, export controls have gained in popularity as a policy tool.

Earlier this summer, reports of India considering an export ban on four key metals – lithium, beryllium, niobium, and tantalum — made headlines on the heels of China announcing export restrictions on gallium and germanium, followed by controls on certain drones and drone-related equipment.

Zimbabwe banned lithium ore exports last December, and Namibia recently banned the export of unprocessed lithium and other critical minerals.

All these announcements tie into a larger trend, which has been noticeable particularly in Latin America, a region with a historic penchant for nationalism, but also elsewhere.

ARPN has featured recent nationalist moves in Chile, Mexico and Bolivia, as well as in Myanmar, Indonesia, and China, and has showcased that even in the Western world, government involvement in the critical minerals sector is on the rise.

Some argue that rather than seeing emerging resource nationalism as a cause for concern, we should embrace it and understand it as an opportunity as “raw material export bans would encourage the construction of processing facilities in producer countries, allow them to claim a larger share of the value chain, (…) encourage the global dispersion of processing capacity that is today dangerously concentrated in China,” and the U.S. could harness this development via an expansion of its friend-shoring network.

Opportunity or threat – resource nationalism is increasingly becoming a policy tool the U.S. and our allies will have to factor into our efforts to decouple from adversary nations, i.e. China. In the process, as ARPN previously outlined, we will have to carefully balance domestic and global policy approaches — as well as public and private sector roles with economic and security concerns to reflect the geopolitical realities of our times.

And, as followers of ARPN well know, this can be best achieved within the context of a comprehensive all-of-the-above approach that focuses on domestic resource development where possible and leverages partnerships where needed.

The post Resource Nationalism Growing Factor as Nations Continue Quest to Reduce Reliance on China for Critical Minerals appeared first on American Resources Policy Network.

Followers of ARPN are aware of rising resource nationalism in Latin and South America, parts of Asia, and now Africa (see our most recent coverage of the issue here).  While some of these developments can be chalked up to a historically penchant for resource nationalism, more recently, government involvement in the critical minerals sector is on the rise even in the Western world.

As ARPN outlined earlier, while modern Western democracies are typically hesitant to embrace more state intervention in the critical minerals sector, many believe that in order to succeed, the United States and its allies need to learn “how to stomach more state intervention [themselves].” 

While state involvement has taken different forms depending on the geographical region, type of government and prevailing political leanings in a given country, a general trend towards more government intervention in this field cannot be dismissed, prompting PHP Group Ltd. Chief Executive Officer Mike Henry to warn that some of these efforts could backfire, and in fact undermine the global push towards net zero carbon emissions.

Speaking at an industry conference in Brisbane, Australia, he told attendees that it was “‘understandable’ that nations were scrambling to secure domestic supply of the metals needed in renewable energy and electric vehicles, but warned against an excessively domestic focus and over-reliance on the ‘sugar hit’ of state-provided subsidies,” as Yahoo Finance reports.

Said Henry:

“Governments striving to secure their own critical mineral supplies must ensure they don’t undermine the outcome the world needs to achieve – where in fact a combination of pragmatic international cooperation and competition can jointly accelerate the energy transition,” 

Speaking specifically in reference to Australia’s just-released critical minerals strategy, which had left some disappointed as they had hoped for more subsidies, permitting reforms and additions to the country’s critical minerals list, he added:

“There’s a big movement underway in the U.S. right now towards permitting reform. Australia needs to do that,” and “[w]hat governments here – federal and state – should focus on are those things within their control to make investment fundamentally more attractive,” i.e. focus on better productivity and fiscal settings.

Henry’s comments should give policy stakeholders pause as they rush towards protectionism.

For a prudent all-of-the-above mineral resource policy to succeed, governments should avoid a heavy-handed approach and rather focus on providing well-structured frameworks conducive to unleashing their countries’ mineral potential and securing critical mineral supply chains without stifling the progress that stems from market innovation.

The post Heavy-Handed Government Protectionism Could Backfire as Nations Continue Push towards Net-Zero Carbon Emissions appeared first on American Resources Policy Network.

Leaders must “pivot to the new reality provoked by the Covid-19 pandemic, the war in Ukraine, the growth of extreme inequalities and aggressive Russian and Chinese autocracies,” writes the NYT.

In the critical mineral realm, these recent events have served as a catalyst for the new “Great Game,” which the geopolitics of mineral resource supply had triggered and which had gained momentum with the adoption of the Paris agreement in 2015 which in turn had committed countries to significantly reduce greenhouse gas emissions and transition to renewables.

Over the course of the last few months, awareness of the importance of securing critical mineral supply chains and decoupling form adversaries, i.e. China, continued to grow against the backdrop of an increasingly volatile geopolitical landscape and mounting environmental pressures.  While, as the New York Times suggests, “the shape of an alternative international system is unclear,” we are seeing first steps towards a realignment as nations around the world rethink and reorganize their critical mineral supply chains.  

ARPN has discussed several developments involving the United States and key allies like Canada and Australia, but Asian nations, too, are taking steps to diversify their supply chains away from China, particularly in the rare earths (REE) space.

In spite of having signed a deal with Vietnam on rare earth development after having experienced the ramifications of an over-reliance on Chinese minerals first hand with the 2010 rare earths standoff between China and Japan, Japan’s domestic rare earth production has remained limited to date, with more than two thirds of the country’s rare earth supplies coming from China.  With demand surging in the context of growing EV markets, Japan is looking to “curb excessive dependence on specific countries, carry forward next-generation semiconductor development and manufacturing bases, secure stable supply for critical goods including rare earth, and promote capital reinforcement of private enterprises with critical goods and technologies,” according to a government strategy paper cited by Qu4tro Strategies this month.

To do so, Tokyo inked a critical mineral agreement with Australia in October of 2022 and Japan’s Organization for Metals and Energy Security (Jogmec) is working with private companies to take control of its holding in a joint venture to develop dysprosium-terbium heavy rare earths in Namibia.  Jogmec is also an investor in Australia-based Lynas Rare Earths’s latest push to increase its meaning capacity in Western Australia.

Vietnam, not traditionally known as a global mining powerhouse, is looking to become a key player in the global REE supply chain.  While, as Qu4tro Strategies outlines, North Korea is believed to be home to the world’s largest rare earth deposits, Vietnam’s large REE reserves are more viable as an alternative to Chinese REEs, as North Korea’s political situation and economic sanctions prevent the country from becoming a link in the global supply chain.

While exploration in Vietnam has so far been unable to tap into the country’s considerable mineral potential, that may be changing. As a fast-growing economy, Vietnam is attracting companies trying to find new regional bases as U.S.-Chinese trade tensions rise, and post-Covid supply chains remain strained.

In recent months, several countries have entered into partnership agreements with bot the Vietnamese Government and private companies to establish “an integrated supply chain for rare earths and other critical minerals.”

Qu4tro Strategies cites the December signing of an agreement between Vietnam and South Korea to jointly explore and develop core minerals including rare earths in Vietnam, as well as a partnership between Australia Strategic Minerals (ASM) and Vietnam Rare Earths for “long-term supply of rare earths to provide feedstock for ASM’s Korean Metals Plant.” 

Trade between Canada and Vietnam is reported to increase under the Trans-Pacific Partnership free trade agreement, and the Canadian province of Saskatchewan is actively exploring the “potential for the countries to collaborate on green energy, including sustainable mining and rare earth elements.”

The Middle East, traditionally known as a leader in the fossil fuel realm, could also emerge as a critical mineral player in a newly realigned world, particularly as nations like Saudi Arabia incentivize investment towards creating integrated value chains, with the country currently processing 145 exploration license applications sent in by foreign companies, according to a new report issued by the Future Minerals Forum in Collaboration with the Payne Institute for Public Policy Colorado School of Mines.

Meanwhile, Africa’s resource richness is well known. As the Future Minerals Forum’s report outlines, trade tensions with China as well as Russia’s ongoing war have triggered many Western countries to turn to Africa for investment opportunities in critical mineral supply during 2022.

Discussions between Minerals Security Partnership countries (see our post here) have begun involving African regions as targets for potential partnerships, and five countries — the DRC, Mozambique, Namibia, Tanzania and Zambia – have initiated conversations on development opportunities to “diversify and bolster critical mineral supply chains while lowering trade reliance with China and Russia” during the UN General Assembly conference in September 2022.  Deals made at the U.S.-Africa Leaders Summit, which included a commitment of over $150 million dollars into Zambia’s mining sector to develop copper and Cobalt, are a case in point.

However, as the authors of the Future Minerals Forum’s report point out, of Africa, “the scale and pace of investment inflows will largely hinge on the restructuring of domestic governance and policy changes.”

As leaders continue to deliberate on the new realities of the post-Cold War world order in Davos this week, we will continue our focus on the realignment underway in the minerals sector and will zero in on the West in our second post this week.

The post A New Critical Minerals World Order? — A Look at the Post-Cold War Realignment in the Wake of Covid, War in Ukraine and Geopolitical and Economic Tension appeared first on American Resources Policy Network.

But while the U.S. gears into action, the global scramble for resources is in full swing.  Case in point:  reports that Russia may be taking advantage of the United States’ shifted focus away from foreign entanglements and may be “following China’s lead and making a splashy bid for influence in Africa.”

For the first time since the collapse of the Soviet Union, Russian President Vladimir Putin welcomed dozens of African national leaders for a summit in Sochi earlier this month in what was supposed to “underline the reversal of Russia’s retreat from the continent and demonstrate the country is no longer a defunct World power,” according to Voice of America (VOA). 

Speaking to reporters, a Putin spokesman said: 

“This is a very important continent. (…) Russia has things to offer in terms of mutually beneficial cooperation to African countries.”

According to the Associated Press, Russia “is taking advantage of the Trump administration’s seemingly waning interest in the continent of 1.2 billion people that includes some of the world’s fasted growing economies and a strategic perch on the Red Sea.”

Followers of ARPN are no stranger to recent Russian forays into mineral-rich areas of the world. One need to look no further than the Arctic, where, against the backdrop of the region’s increasing strategic relevance and China’s ever-growing influence, Russia has increased its military commitment and upgraded its old Soviet Arctic military bases. 

In Africa, the Kremlin is looking to revive its relationships from the Soviet era, which were extensive at the time, but cut off abruptly with the collapse of the Soviet Union.   As VOA reports, while trade with African countries has already increased by 350 percent in the past decade, according to Russia’s foreign ministry, the country hopes that the conference will lead to more oil, and mineral resource deals with African states going forward.

To be sure, Russia’s engagement on the African continent pales in comparison to China’s, which has been aggressively tapping the continent’s vast mineral potential by investing hundreds of billions of dollars in infrastructure projects as part of its One Belt One Road Strategy.

Against this background, analysts argue that Russia’s role in Africa should not be overestimated, as its “involvement in Africa is limited and guided by a combination of unrealistic ambitions and opportunism,” and “U.S. efforts should continue to prioritize addressing those long-standing challenges rather than being reoriented around the far narrower issue of countering Russian actions.”

Neither, however — with the tech wars over which country will dominate the 21 Century Tech Age in full swing — should Russia’s African resource outreach be neglected or ignored. 

The post Against Backdrop of Tech Wars, Russia Seeks to Boost Footprint in Africa appeared first on American Resources Policy Network.

It is the big elephant in the global resource policy room: China. And its footprint is growing – as we recently outlined, in the Arctic, and in Africa. A recent comprehensive Financial Times piece by David Pilling outlines Beijing’s growing multifaceted involvement on the African continent. As Pilling writes: 

“In the past 15 years, […] the level of engagement by Chinese state-owned enterprises, political leaders, diplomats and entrepreneurs has put centuries of previous contact in the shade.”

China’s engagement ranges from loans over investments for construction of roads, ports and railways to involvement in peacekeeping missions. According to Pilling, who cites think tank figures, China-Africa trade has risen from a mere $10 billion to 220 billion since 2000, while China’s foreign direct investment stocks went up from just 2 per cent of US levels to 55 per cent. Meanwhile, about one-sixth of all loans to Africa come from China.

Most recently, and not surprisingly, Cobalt – a critical component of EV battery technology – has been in the crosshairs of Chinese companies, which have purchased multibillion-dollar stakes in mines in the Democratic Republic of Congo (DRC). At 3,400,000 metric tons, the DRC is home to the world’s largest Cobalt reserve and roughly 62 percent of global refined Cobalt is sourced here.

What does this mean for the rest of the world – and for the U.S. in particular? Writes Pilling:

“The China-Africa relationship — partly spontaneous and partly the fruit of an orchestrated push from Beijing — is shifting the commercial and geopolitical axis of an entire continent that many western governments had all but given up on. While Europeans and Americans view Africa as a troubling source of instability, migration and terrorism — and, of course, precious minerals — China sees opportunity. Africa has oil, copper, cobalt and iron ore. It has markets for Chinese manufacturers and construction companies. And, perhaps least understood, it is a promising vehicle for Chinese geopolitical influence.”

The global resource wars are continuing to heat up, but the U.S., for too long hamstrung by outdated policies and regulatory red tape, has been slow to even get off the starting block. There are indications this is changing, as evidenced by a current U.S. Commerce Department investigation into whether aluminum and steel imports from China and elsewhere constitute a threat to national security, among other things.

As China continues its global quest for resources, now would be a good time for policy makers and stakeholders formulate a comprehensive U.S. mineral resource strategy our country has been sorely lacking. 

The post Africa Taking Center Stage in China’s Quest for Resources appeared first on American Resources Policy Network.

Last month, the Huffington Post published a column discussing the growing footprint of two emerging powers in Africa – China and Brazil. China is a known quantity on the continent, and has been the “unequivocal leader in infrastructure development within Africa.” More recently, however, Brazil has accelerated its efforts and more than quadrupled investment to more than $20 billion over the past decade.

China’s motive for its aggressive investment strategy is clear: it’s about access to the continent’s mineral riches. But while Brazilian resource companies (both fuel and non-fuel) are leading the loan, aid and infrastructure campaign, Julia Neyman, citing Financial Times’ Deputy Emerging Markets Editor Jonathan Wheatley, argues that Brazil’s “move is ‘less about commodities, more about new markets.’”

Whatever the ultimate motivation, Neyman is on point when she says:

“Not only does Africa provide a necessary platform to showcase China and Brazil’s advancements to other BRIC and G20 nations, but the continent itself serves as a strategic future investment. […] If and when African nations become more important players on the world stage, China and Brazil’s political positions will have been favorably cemented.”

The interesting question is, where is the United States in this picture?

The post China and Brazil increase resource footprint in Africa appeared first on American Resources Policy Network.

Mills predicts that:

“[a]ccessing a sustainable, and secure, supply of raw materials is going to become the number one priority for all countries. Increasingly we are going to see countries ensuring their own industries have first rights of access to internally produced commodities and they will look for such privileged access from other countries.”

He concludes:

“The supply of most commodities is going to tighten. This undeniable fact should be on everyone’s radar screen. Is it on yours? If not, it should be.”

Thankfully, there are signs that the issue is increasingly appearing on Washington DC policymakers’ radar screens – let’s hope momentum keeps building for a the formulation of a comprehensive U.S. mineral strategy in light of the many challenges we’re facing in this area.

The post Global resource insecurity an issue that “should be on everyone’s radar screen” appeared first on American Resources Policy Network.

China’s aggressive pursuit of mineral resources around the globe continues with Africa being a “key destination for meeting China’s resource acquisitiveness,” according to a presentation given at the Coaltrans Southern Africa conference earlier this month.

As outlined in an article on MiningWeekly.com, China’s quest for resources in Africa, which centers on oil, gold, platinum, copper, nickel and manganese, has led to seven major partnership agreements between Chinese and African stakeholders in the second half of 2011 alone.

Meanwhile, China is also a key supplier nation for many critical metals and minerals, and has a near-total monopoly on strategic minerals like Rare Earths so much so that it is in a position – and has done so on several occasions in the past – to use its restrictive mineral export policies as a geopolitical weapon.

Needless to say, China’s role is being examined in the forthcoming American Resources Policy Network report entitled “Reviewing Risk: Critical Metals & National Security.” As the proverbial “Elephant in the Room,” China will also be a topic of discussion at the Strategic Minerals Conference 2012, taking place on June 6, 2012 at the Hyatt Regency Washington on Capitol Hill in Washington, DC.

For more information including related video from some of the conference participants, and an updated agenda as the event date draws closer visit www.strategicmineralsconference.com.

The post China’s African resource footprint continues to grow appeared first on American Resources Policy Network.

With more than 6,500 delegates expected at this year’s Indaba, next month’s event in Cape Town is set to be the biggest conference yet.  Particularly interesting from an American Resources perspective is the fact that organizers report a significant increase in interest from resource-hungry China and India, not just in terms of attendance, but active participation.

The conference is known to be a place where many mining deals have been struck in the past.  Against that background, the fact that China and India, both of which have worked feverishly to increase their footprint in Africa in an effort to gain access to the continent’s vast mineral riches, are looking to step up participation in the event is a clear indication that the global race for resources shows no signs of slowing down.

Another interesting take-away from the article points in the same direction:  Given the success of the conference in Africa, there are now plans to hold a similar Indaba in Asia this fall.  With awareness of the need to ensure future access to critical mineral resources increasing around the world, will policy makers in Washington, D.C. finally give the issue the attention it deserves?

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