The Biden administration plans to use a gathering of resource-rich nations to spur new investment as part of its bid to shift the supply chain for rare-earths minerals away from China.
The Minerals Security Partnership between the US, EU, Japan and other wealthy nations is holding a ministerial meeting Thursday at the United Nations General Assembly with nations that possess minerals such as lithium, manganese and cobalt.
The developing nations taking part include Argentina, Brazil, Chile, the Democratic Republic of the Congo, Indonesia, Mongolia, Mozambique, Namibia, the Philippines, Tanzania and Zambia. US Secretary of State Antony Blinken is set to chair the meeting
The initiative, launched in June, is designed to funnel investment toward developing countries with mining projects that adhere to stricter environmental, social and governance standards.
“We created this to deal with a supply chain vulnerability that we’ve known has existed a long time,” Under Secretary of State Jose Fernandez said in an interview in New York. “But the pandemic has taught us that these vulnerabilities need to be addressed and minimized. And what we’re hoping to do is to galvanize investment, financing and other agreements.”
The critical mineral supply chain remains almost totally dominated by China, which controls most of the market for processing and refining minerals such as cobalt, lithium and other rare earths.
“It’s about providing options,” Fernandez said, when asked whether the partnership was a strategic initiative to counter Beijing. “If we’re successful, the Chinese will also gain as well, and that will be to the benefit of producing countries.”
The minerals initiative may also get a boost from recent legislative efforts in Washington. Fernandez referred to a recent trip to lithium-rich Mexico last week, where he told local officials that “now’s the time to partner” on projects that might to benefit from tax credits under the Biden administration’s Inflation Reduction Act.
“There is momentum — the funding that is provided in the IRA is substantial,” Fernandez said. “It should allow us to to promote responsible critical mineral production in a way that supports ESG goals.”
In the coming months, the US intends to continue meeting with mineral-rich nations and identify some of the first mining projects to benefit from the minerals security pact.
(By Iain Marlow)