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Greenland’s critical minerals require patient statecraft

Reed Blakemore, Alexis Harmon — Tue, 13 Jan 2026 21:01:29 +0000

WASHINGTON—Greenland is a land of stark contrasts. Larger than Mexico and Saudi Arabia but home to only 56,000 people, this autonomous Danish territory has an economy traditionally built on fishing and substantial subsidies from Denmark. Yet beneath its ice and rocky coasts lies mineral wealth that has attracted growing international attention—including from US President Donald Trump. Greenland has firmly rejected notions of being “for sale,” and European allies have responded with alarm at US overtures about seizing the territory. Regardless of the rhetoric, the United States has compelling opportunities for commercial and diplomatic partnerships with Greenland.

As a mineral frontier, Greenland offers clear advantages: Its geological endowment is significant and comparatively unexplored, and it presents relatively low above-ground investment risk as a stable democracy aligned with Western institutions. However, these advantages come with major caveats. With fewer than one hundred miles of road on the entire island and significant local resistance to mining, Greenland lacks both the basic infrastructure and social license needed for large-scale mining operations. As a result, the path from exploration to production is likely longer, riskier, and more expensive than in more developed mining jurisdictions.

Yet, as US Secretary of State Marco Rubio prepares to meet with Danish officials in the coming days, these challenges inform how the United States can most effectively engage: through collaboration rather than confrontation.

What critical mineral reserves does Greenland have?

Greenland’s mineral wealth presents a geographical puzzle. The country’s ice-free area, which is nearly double the size of the United Kingdom, represents less than 20 percent of the island’s total surface. Vast areas of the interior remain unexplored beneath ice that can exceed a mile in thickness.

Nonetheless, Greenland possesses an impressive array of critical minerals, from traditional commodities such as copper, lead, and zinc that have been mined on a small scale in ice-free coastal areas since 1780, to modern critical minerals essential for energy and defense technologies.

Greenland’s most geopolitically significant resources include:

Rare earth elements (REEs): Greenland is estimated to hold approximately 36 million tonnes of rare earths, though only 1.5 million tons are currently considered proven, economically viable reserves. Greenland is generally ranked around eighth globally in reserves, placing it among the most significant undeveloped REE holders; with further exploration and feasibility studies, it may be proven to contain the world’s second-largest reserves after China.
Uranium: Greenland has one of the largest uranium deposits in the world, which is notably co-located with major REE deposits. However, Greenland reinstated a ban on uranium mining in 2021 following sustained local opposition. This prohibition has had direct implications for projects where uranium is present alongside other minerals.
Other strategic minerals: Greenland holds known deposits of copper (essential for electrical infrastructure), graphite (key to battery production), gallium, tungsten, zinc, gold, silver, and iron ore. It also holds various specialty metals with high-tech and defense applications, including platinum, molybdenum, tantalum, and vanadium. While many of these resources are geologically promising, few have progressed beyond early exploration.

To date, exploration activity has focused primarily on coastal and southern Greenland, where logistics are more feasible. The latter half of the 2010s saw an explosion of exploration permits in this region; by early 2020, exploration permits had been granted across almost the majority of southern Greenland. Despite this explosion of interest, there are only two active mines on the entire island, Nalanuq (a gold mine) and White Mountain (an anorthosite mine). To date, no rare earth, uranium, or other high-profile critical mineral projects have entered commercial production.

Though further exploration and feasibility studies may foster additional interest, the sites currently receiving the most attention include:

The Kvanefjeld project on Greenland’s southern tip, one of the world’s most significant deposits of both rare earths and uranium.
The Tanbreez mine in the same fjord network, which contains substantial deposits of eudialyte ore rich in rare earth elements (in particular heavy rare earths) and gallium.

What are the main obstacles to developing Greenland’s mineral resources?

Greenland’s mineral deposits are globally significant, particularly for rare earth elements. However, unlike established mining regions in Australia, Canada, or even emerging sources in Africa and South America, Greenland has minimal production infrastructure and no large-scale operating critical mineral mines.

From a supply perspective, Greenland’s reserves are largely theoretical. Though it represents a substantial reserve in a politically stable, Western-aligned jurisdiction, bringing that potential online faces several notable challenges:

Infrastructure deficits: Outside of Greenland’s few small cities, roads and railroads simply do not exist. Transport depends almost entirely on ships and aircraft, greatly increasing costs and complexity. This infrastructure gap extends the typical decade-long timeline from discovery to production and dramatically increases capital requirements. While mining projects can spur infrastructure development, the initial infrastructure investment represents a significant barrier to entry—especially since it is generally too cold in Greenland to construct durable roads from concrete and asphalt. This poses a significant challenge to project economics. Transportation of minerals can sometimes be even more expensive than the mining process itself, and Greenland’s remoteness, limited economies of scale, and harsh Arctic conditions make it one of the world’s most expensive mining jurisdictions.

Social and political opposition: Though the government has periodically promoted mining as a tool for economic development, mining remains politically contentious. All land in Greenland is publicly owned and administered, making closed, privately controlled mining sites culturally unfamiliar and politically sensitive. Local opposition reflects deeper concerns about environmental impacts, changes to traditional ways of life, and the terms under which mining would proceed. Most significantly, in 2021, Greenland’s parliament passed legislation prohibiting uranium exploration and limiting uranium content in mined resources, effectively halting rare earths development at the Kvanefjeld project given the presence of uranium.

Geopolitical complications: Recent US rhetoric about acquiring or annexing Greenland has naturally generated diplomatic friction and intensified local sensitivities around sovereignty, complicating social license for mining. At the same time, broader US-China competition has played out in Greenland’s mining sector. In one notable example, US officials reportedly successfully lobbied the Tanbreez mine CEO to sell to American bidders for less than Chinese-linked competitors. The Kvanefjeld project is owned by Australian company Energy Transition Minerals (formerly Greenland Minerals Limited)—but China’s Shenghe Resources is its second-largest shareholder, raising concerns in Washington, which sees the mining sector as a backdoor for Chinese encroachment in the Arctic. Though Shenghe only holds a 6.5 percent stake, a nonbinding 2018 MOU reflects the intent to have Shenghe “acquire all rare earth output produced at the Project,” positioning it as the primary prospective offtaker and downstream processing partner.*

What are viable paths for US engagement?

Greenland’s strategic value lies in its role as a long-term diversification partner in a concentrated global market, rather than an opportunity for immediate production. While annexation rhetoric has drawn attention to Greenland’s resources, a unilateral US approach would limit their potential value. More effective alternatives include:

Strategic partnerships with Greenland and Denmark: Rather than pursuing ownership, American companies and the US government could support mining development through direct investment, financing mechanisms, and technical assistance—tools well suited to institutions such as the US Development Finance Corporation and Export-Import Bank. Coordination with European partners could amplify these efforts, as seen in the Lobito Corridor, where European capital helped bridge infrastructure gaps. Diplomatically bundled investment could help de-risk projects that might otherwise fail to attract private capital, an approach far less viable under a confrontational strategy.

Competing effectively with Chinese investment: The Tanbreez case demonstrates that US diplomatic engagement can influence ownership and investment outcomes, but effective competition requires more than lobbying against Chinese involvement. It demands credible alternatives such as competitive financing, technical expertise, market access, and partnership structures that align with project needs—all of which are more successful in concert with a wide pool of partners. One complementary step could be the development of an investment screening mechanism in Greenland, akin to a Committee on Foreign Investment in the United States–style review, to assess national security and strategic risks associated with foreign capital. Such a framework would strengthen Greenland’s own security and governance while providing greater assurance to US and allied markets that upstream assets are not vulnerable to strategic capture. However, even with successful mining development, rare earth ores from Greenland would likely still be processed in China absent expanded allied processing capacity, underscoring the need for parallel, collaborative investment in downstream infrastructure.

Supporting responsible development: Projects that lack local legitimacy are unlikely to succeed. Emphasizing environmental safeguards, indigenous rights, and meaningful benefit-sharing is both ethically and commercially essential. Greenlanders have consistently expressed a much stronger interest in independence than in joining the United States. An overly aggressive US approach would likely further complicate social license for mining.

Greenland’s mineral wealth will take a decade or more to translate into meaningful supply. Its greatest value lies not in rapid extraction but in long-term diversification within a trusted political framework. For the United States and its allies, the challenge is clear: securing access to critical minerals and strategic space without undermining the very alliances and norms that underpin long-term stability. Patient, partnership-based engagement that respects Greenland’s autonomy and international law will not generate immediate headlines, but it offers the only credible path through a period in which intensifying competition over critical resources threaten to upend the established geopolitical order.

Note: This article was updated on January 29 to more accurately reflect Shenghe Resources’s role in mining operations in Greenland.

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Rare earth mining could solve, not worsen, Central Asia’s water troubles

Andrew D’Anieri — Mon, 12 Jan 2026 16:40:27 +0000

Central Asia is facing a paradox: Vast energy and mineral reserves promise economic growth, yet climate change and water shortages constrain the region’s ability to realize that potential.

Led by Kazakhstan and Uzbekistan, the five Central Asian states—which also include Kyrgyzstan, Tajikistan, and Turkmenistan—are eager to develop their wealth of critical minerals and rare earths. But without careful management, this push risks further straining already dwindling water reserves, particularly as temperatures in the region rise twice as fast as the global average.

Undoubtedly, new mining projects will initially add more pressure to Central Asia’s stressed water systems. However, with smart policies, states in the region can capture a net “water dividend”: By reinvesting mining revenues in water-saving infrastructure and technologies, they can ensure that the water conserved or newly secured ultimately exceeds the amount consumed by mining itself.

Resource wealth meets climate pressure

To avoid further exacerbating water shortages, the Central Asian states will need to navigate two public policy challenges. First, they must attract high-quality foreign investment in mining partnerships, ensuring firms from all countries can compete on a level playing field. Second, they must use mining revenues to modernize aging infrastructure, experiment with cutting-edge precipitation enhancement technologies, and fund a long-term strategy for regional water security cooperation.

Central Asia’s critical minerals and rare earths have drawn major commercial and geopolitical interest from the United States, China, Russia, and the European Union. Companies and governments alike view access to these resources—key to the production of complex electronics, renewable power sources, high-grade defense systems, and more—as essential to competing economically and militarily in the decades ahead. Kazakhstan and Uzbekistan, in particular, are rich in rare earths as well as critical minerals such as uranium, copper, and tungsten.

At the same time, the region appears to be careening toward a water crisis. Central Asia uses approximately 127 billion cubic meters of water per year. Of that, 100 billion cubic meters flow into the region’s highly inefficient agricultural sector, which loses half of this water supply before it even reaches the fields.

As many as twenty-two million of the roughly eighty million people living in Central Asia already lack secure access to safe water—and the region’s total population may increase to 110 million by 2050, intensifying demographic pressure on scarce water resources. Rising temperatures are rapidly melting the glaciers in Kyrgyzstan and Tajikistan that provide much of the fresh water for downstream countries such as Uzbekistan and Turkmenistan. Meanwhile, water levels in the Caspian Sea are projected to drop by up to 60 feet by 2100, exposing dry land roughly the size of Portugal.

Critical minerals could power the region’s growth

Mining operations are notoriously capital-intensive to launch and water-intensive to run, but the industry can still become a net revenue and resource boon to Central Asia. Western firms have begun investing in new critical mineral projects across the region. These firms have proven much more eager to do so when they are backed by their governments. In November, US-Australian firm Cove Capital agreed to a $1.1 billion deal with Kazakhstan’s state mining company to develop the Upper Kairakty and North Katpar tungsten deposits in central Kazakhstan—among the largest known tungsten deposits in the world. Cove Capital’s feasibility studies suggest the project could produce eighty billion dollars’ worth of the resource over the mine’s lifespan.

Crucially, the project is set to be backed by $900 million in financing from the US Export-Import Bank (EXIM), making it the most high-profile example to date of concrete Western government and private-sector engagement in Central Asian critical minerals development.

Water intensity varies widely across metals mining depending on ore grade, depth, dispersion, recycling rate, and management, but tungsten and other rare earth elements may be among the more water-efficient metals to extract. Almonty Industries’ Sangdong tungsten mine in South Korea—a much smaller operation in terms of annual output—uses roughly 500,000 cubic meters of fresh water per year, a drop in the proverbial bucket compared to Central Asia’s agricultural water consumption. Cove Capital believes ore grades at Upper Kairakty and North Katpar may exceed those at Sangdong, potentially further reducing water requirements for tungsten processing.

If early exploration proves accurate, Kazakhstan could hold the third-largest rare earth reserves globally. The Kazakh government has signaled that it aims not only to mine rare earths but also to move up the minerals value chain. Studies estimate that developing rare earth processing capacity alone could add up to 7.1 percent of gross domestic product (GDP), on top of revenues from raw mineral production. Such investments could ultimately make mining more valuable than Kazakhstan’s oil and gas sector, which currently accounts for about 16 percent of GDP, compared to roughly 12 percent (around thirty billion dollars) from mining today. This additional revenue would be especially valuable for a country whose real GDP growth is expected to slow beginning in 2026.

Uzbekistan has also signed agreements with the US government to partner on mining investments with significant potential, particularly in tungsten and other rare earths. While the country’s mineral wealth has not been surveyed as extensively as Kazakhstan’s, Tashkent is investing billions of dollars in exploration it believes could unlock as much as three trillion dollars in total economic value. Achieving this ambitious target will depend on maximizing transparency during exploration and reducing investor risk through continued rule-of-law reforms—turning memoranda of understanding into bankable projects.

Turning mining revenues into modern water infrastructure

Both Kazakhstan and Uzbekistan should therefore pass favorable subsoil and export-tax legislation to attract investment. Astana and Tashkent should also work with EXIM and the US Development Finance Corporation to support investments in processing capacity tied to projects involving US investors. Given China’s dominance in critical mineral and rare earth processing, the US government has a strategic interest in facilitating regional processing capabilities alongside US mining investments.

Kyrgyzstan and Tajikistan also possess economically viable mineral resources, but uncertain regulatory environments and Chinese dominance in their mining sectors make large-scale Western investment unlikely in the medium term. Among the five Central Asian states, Turkmenistan may stand to gain the most from a water dividend—and could leverage its substantial natural gas revenues to fund smarter water conservation practices.

Most importantly, governments must reinvest new revenue streams in technologies that directly mitigate water insecurity.

First, agricultural irrigation infrastructure across the region is largely outdated and inefficient and should be replaced by modern systems to reduce water loss to seepage and evaporation. Efficiently collecting mining revenues and procuring water-saving technologies will require greater governmental agility and technical capacity.

Second, Central Asian states should explore increasingly efficient cloud-seeding technologies, pioneered in the United States and the Gulf, as a means of increasing precipitation in agricultural zones—particularly in steppe and mountain valley regions. Early studies suggest that localized cloud-seeding programs can increase precipitation by up to 15 percent per year. While some have raised questions about cloud seeding’s environmental impact, communities and local governments that employ cloud seeding have empirically found negligible risks.

Third, a region-wide water security strategy, backed by interstate conservation and infrastructure projects, is essential for long-term stability. For decades, competition over water and strained neighborly relations created a vicious cycle of mistrust and tension in Central Asia. That dynamic can be gradually reversed through people-to-people engagement and shared infrastructure projects designed to conserve and distribute water more effectively in service of regional welfare and stability—rather than narrow domestic interests.

Modernizing irrigation infrastructure is expensive but can be made affordable by diverting a modest share of future mining revenues. Experts estimate that Kazakhstan will spend $515 million on irrigation upgrades between 2026 and 2030. The proposed Cove Capital tungsten mine alone could eventually generate around $125 million in annual tax revenue, assuming production and price targets are met over its fifty-year lifespan. Cloud seeding in the west of the United States has repeatedly proven more cost-effective than water metering and other indirect conservation measures, and costs could fall further as companies such as California-based Rainmaker deploy drones to seed clouds more precisely.

Central Asia should leverage its vast mineral wealth to secure a net water dividend and reduce risks to regional security and stability. Trusted partnerships, high-quality investment, good governance, private-sector dynamism, and creative diplomacy will all be crucial to addressing the region’s escalating climate and water challenges. By maximizing shared benefits from mineral development, Central Asian states can transform mining revenues into long-term water security.

Andrew D’Anieri is associate director of the Atlantic Council’s Eurasia Center. Find him on X at @andrew_danieri.

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First hundred days: How Kast can accelerate US investment in Chile

Maite Gonzalez Latorre, Jason Marczak — Mon, 22 Dec 2025 21:12:03 +0000

Bottom lines up front

Chile elected José Antonio Kast president December 14, after a campaign centered on economic growth, security, and institutional stability.
Kast’s proposed security measures aim to restore the predictability of long-term investment needs.
To deepen economic ties with the US, in his first hundred days Kast could also expand workforce training and regional programs to ensure access to skilled talent across the country.

New president, new pressures

José Antonio Kast will head to La Moneda in March 2026. Chile’s president-elect won the second round of the election with 58.2 percent of the vote—winning by a margin of more than 16 percentage points. The day after the election, Kast met with outgoing President Gabriel Boric and emphasized afterward that he will advance a “government of national unity on priority issues: security, health, education, and housing.”

Kast will enter office with a slew of economic pressures in his inbox: slow growth, weak investment, stagnant productivity, high inequality, limited social mobility, and regional gaps. The labor market remains segmented, with low female participation and high informality. Along with these economic pressures, security and rising crime rates dominated the electoral campaign and addressing them will be central to Kast’s government plan.

In 2024, Chile’s economy showed signs of stable but uneven recovery, with moderate 2.6-percent gross domestic product (GDP) growth driven largely by mining, easing inflation, and falling poverty, while unemployment and informality remained elevated and investment growth lagged. Looking ahead to 2026, growth is expected to remain steady at 2.6 percent. Alongside a narrowing fiscal deficit and inflation stabilizing, this suggests a macroeconomic environment that is steady but still dependent on restoring investment momentum.

Chileans want to see changes and expect Kast to deliver some economic wins quickly. But the ability to do so goes hand in hand with addressing the increased rates of crime and violence. Kast’s campaign focused on the security of the country with proposals such as his Plan Implacable, which aims to “restore state authority and curb organized crime” through tougher penalties, more federal control over prisons, and stronger security operations, while also reasserting state authority in areas where criminal networks have expanded. This plan might be among the things on which Chileans want Kast to take action first. However, Kast and his administration need to balance what they want and what they can actually get done, especially regarding migration and deportation.

A challenging congress

The first one hundred days of the Kast administration will test the executive’s ability to move legislation that supports faster growth, rebuilds investor confidence that has been weakened by security concerns and political fragmentation, and signals a clearer economic direction.

That said, Kast takes office with a congress that leans right but does not give him full control. Right and far-right parties aligned with Kast hold seventy-six of the 155 seats in the Chamber of Deputies, with his second-round opponent Jeannette Jara’s left and far-left coalition of Unidad por Chile controlling sixty-one. The swing party of Franco Parisi, Partido de la Gente, holds fourteen seats.

Kast will need a simple majority to pass most legislation. But constitutional amendments and reforms of the electoral system would require two-thirds of votes in the congress. Kast’s coalition cannot reach either threshold on its own, and must work with partners to move any major bill forward. This makes the Partido de la Gente especially important. Because no bloc controls a majority, its fourteen deputies are in position to decide whether a proposal advances or fails. Its votes can tilt negotiations, shape the final text of legislation, and determine how governable the next term becomes.

Passing legislation through the lower house will be easier, but major legislation such as Kast’s proposed mass deportations will need broader support. The evenly split senate will require him to work with the traditional right as well as swing actors to move legislation. As such, Kast will be faced with increased pressure to deliver short-term results on crime and economic growth, signaling early whether his administration can translate public demand for order and stability into a more predictable environment for investment, something US investors typically look for before committing capital in Chile.

How Chile’s investment environment has shifted

Since the mid-1980s, Chile has implemented significant reforms that opened its economy and encouraged foreign investment. These included changes in the financial and social markets, such as Law No. 20.848 of 2015 establishing the framework for foreign direct investment (FDI), as well as other tax and labor reforms. However, social unrest in 2019, the COVID-19 pandemic, two failed constitutional reform attempts, and rising crime have affected investor confidence.

The trade relationship between Chile and the United States is one of the deepest and most strategic for our country. Since the Free Trade Agreement came into effect in 2004—which allowed 100 percent of bilateral trade to be duty-free by 2015—trade between the two countries has more than doubled, and Chilean exports to the US have grown steadily. Today, the United States is our second-largest export destination and also the second-largest foreign investor in Chile, reflecting a mutual trust built over time.

The opportunities to deepen this partnership are enormous: sustainable energy, critical minerals, green hydrogen, water and digital infrastructure, and advanced technologies. Chile contributes stability, legal certainty, and strategic resources; the United States brings innovation and capital. Strengthening this cooperation is key to driving investment, productivity, and new opportunities for both countries.

—Susana Jiménez Schuster, president, Confederation of Production and Trade (CPC)

The foundation for investment in Chile lies in democracy, rule of law, and a predictable regulatory environment. The Organisation for Economic Co-operation and Development (OECD) has indicated that Chile’s growth might be reaching a ceiling, making continued reforms—such as streamlining permits, encouraging innovation, digitalizing paperwork, simplifying regulations, and removing bottlenecks—essential for reigniting momentum.

Chile has economic sectors with great potential that meet global demand for a wide range of goods and services, as well as developed markets and a stable institutional framework. Just as our country can offer attractive conditions to foreign investors, we can also provide knowledge and talent in those industries where we have developed a high level of know-how and expertise. Chile’s growth has been founded on strong collaboration, and free trade agreements with various economies around the world.

—Francisco Pérez Mackenna, board member, AmCham Chile

What makes Chile an attractive destination for US investors

Several conditions strengthen opportunities for US investment in Chile. Together they shape a more attractive environment for long-term investment is likely to be a priority for the incoming Kast government.

Chile is a key tech hub in Latin America. This is because of its stable economy, strong startup ecosystem, skilled workforce, advanced digital infrastructure, and government-backed innovation programs. Successful tech projects require a strong and solid workforce. According to CBRE’s Scoring Tech Talent 2025 report, Santiago has the third-highest tech talent pool in Latin America, with more than 143,000 professionals. This positions Chile as an attractive hub for companies to expand. That said, most initiatives are heavily concentrated in Santiago, emphasizing the need for additional training in both the northern and southern regions to ensure successful new project implementation.
US companies benefit from working with reliable local partners, in part because Chile has clear rules for contracts and strong institutions and because local firms usually have long experience navigating permitting, local procurement, cultural nuances, and sector-specific regulations. These conditions create an environment where these partnerships give foreign investors a dependable base of support on the ground.
Investors trust Chile because its infrastructure is strong, and its politics stay steady. In 2024, Chile received $15.3 billion in FDI, one of the highest inflows in recent years. A big share of that comes from reinvesting earnings, which shows that companies already in Chile are confident enough to expand. The government agency InvestChile closed 2024 with a portfolio of $56.2 billion in foreign-backed projects, with US companies investing the largest share at $20.5 billion. Major investments target clean energy: green hydrogen, mining, and infrastructure. These numbers show that foreign investors, especially those from the United States, believe in Chile’s long-term stability and the clarity of its rules. They see a country where projects can start quickly and scale up, thanks to predictable regulations and reliable systems. That confidence in both infrastructure and political stability strengthens the case for more investment.

The U.S. International Development Finance Corporation (DFC)’s mandate prioritizes investments in markets that offer predictability, stability, and clear rules, conditions that have historically made countries like Chile attractive for engagement. The DFC, a US federal agency, was created under the 2018 Better Utilization of Investments Leading to Development (BUILD) Act, which merged the Overseas Private Investment Corporation (OPIC) with USAID’s Development Credit Authority. Its core purpose is to mobilize private capital to advance US development and foreign policy objectives by leveraging financial tools such as loans, equity investments, guarantees, and political risk insurance to support private-sector-led solutions in markets where commercial finance is limited or unavailable.

In December 2025, Congress reauthorized and modernized the DFC through the FY 2026 National Defense Authorization Act (NDAA), extending its authorization through 2031, and significantly expanding its scope and authorities. Under this reauthorization, the DFC’s investment cap (Maximum Contingent Liability) was raised to $205 billion, and the agency gained new tools, including a $5 billion equity revolving fund and increased equity investment authority. The legislation also broadened DFC’s ability to invest in more countries and sectors while placing limits on financing in the wealthiest countries, ensuring that no more than 10 percent of its portfolio may support high-income markets, with specified sector exceptions such as energy, critical minerals, and information and communications technology.

While Chile’s high-income status means that large-scale DFC engagement is still limited compared with developing markets, the agency can support selected projects in strategic areas, including clean energy, critical minerals, infrastructure, and technology, particularly where there is a clear economic or strategic rationale and consistent with the statutory constraints on participation in wealthy countries.

Addressing bottlenecks to further FDI in Chile

Following the presidential election, Chile enters a new political phase with renewed attention on how the next administration will translate campaign promises into policy. Chile continues to take steps to strengthen its investment environment, while facing persistent bottlenecks that shape foreign investor confidence and will influence the country’s economic direction in the months ahead.

Regulatory delays are a major concern and become impediments. Permitting and environmental review processes can take several years. However, the Framework Law on Sectoral Authorizations (Law 21.770)—better known as the Ley de Permisología, which creates the Framework Law on Sectoral Authorizations (LMAS)—was enacted and posted in September 2025. The goal is to update and speed up the permit process to encourage investment. The law creates a single digital portal called SUPER to manage permits simultaneously, introduces simplified procedures for low-risk projects, and establishes administrative silence. Streamlining and updating procedures are expected to drop processing times between 30 percent and 70 percent without lowering regulatory standards. This will also be a step forward for attracting foreign investment.
Policy uncertainty remains a concern for long-term investors. Over the past decade, shifts between governments of the right and left have created questions about the direction of future regulations. Relations between Santiago and Washington are expected to further deepen under a new administration. Kast will need to show that he can meet public expectations for stronger growth and higher investment. Here, it’s critical to balance the demands of [JF1] parties across the political spectrum as this congressional balancing act is what’s needed to advance legislation reassuring to investors. Although Chile has struggled lately to attract FDI, the United States remains its second-largest source, with a strong presence in energy, data centers, and mining.
The economy also plays a major role in the current political moment. Chile has experienced slow growth for several years and unemployment sits at about 9 percent. Investment remains stagnant, with inflation and high living costs shaping daily choices for many Chileans. Voters widely see the current government as falling short in addressing these issues. The national budget was also a central topic of conversation during the election. The legislative commission in charge of reviewing the annual budget recently rejected the proposal for 2026; Kast will now likely express his approach to next year’s spending plan in the short term. That said, his proposal of gradual elimination of property taxes on primary residences, starting with those on homeowners over sixty-five, would reduce government revenue, meaning the 2026 budget will need to account for this shortfall. The administration will need to balance funding public services and implementing the policy in a fiscally responsible way.
Security is another major risk. While Chile remains relatively safe in comparison to select other countries, crime has risen in recent years—including organized crime, drug trafficking, and violence in northern regions and Santiago. Researchers estimate crime costs the country nearly $8 billion annually, discouraging some foreign investment. Kast made public safety a core part of his platform through the previous mentioned Plan Implacable, which includes tougher penalties for organized crime, high-security prisons, expanded self-defense laws, protections for law enforcement and judicial actors, and targeted border security measures with his Plan Escudo Fronterizo.

American investment has been central to the growth of Chile’s strategic industries, while Chile’s stability, talent, and infrastructure have enabled US companies to scale across Latin America. Significant opportunities remain. Chile is the world’s largest copper producer and holds 25 percent of global lithium output, with growing mineral-processing capacity and emerging resources such as rare earths and cobalt. The country is also becoming a regional digital hub, supported by projects like Google’s Humboldt Cable and expanding data-center infrastructure. Upcoming port concessions and the need for energy storage solutions in a rapidly growing clean-energy system offer additional avenues for deeper US investment.

—Beatriz Herrera, investment commissioner for North America, Embassy of Chile

Sectors in Chile with investment potential

Information technology (IT): Chile’s IT sector is expanding rapidly, driven by high internet penetration, widespread mobile connectivity, and growing demand for digital services. Key emerging sectors include fifth-generation (5G) deployment, big-data analytics, and artificial intelligence (AI) integration, supported by initiatives such as Chile Digital 2035 and the National AI Policy. To accelerate growth, Chile can build on existing programs by expanding Chile Digital 2035 and Digital Talent for Chile, increasing investment in digital infrastructure, scaling training and education initiatives, and deepening public-private partnerships to ensure broader access to advanced IT solutions, close the skills gap, and achieve full digitalization of public services.
Critical minerals (copper and lithium): As the world’s largest copper producer, supplying 24 percent of global output, and home to 41 percent of lithium reserves, Chile is a strategic source of materials essential for clean technologies. These include electric vehicles, energy storage, and digital infrastructure. With public policies promoting sustainability and high environmental standards, Chile is positioning itself to attract investment that advances technological innovation, supports the global energy transition, and fosters inclusive economic growth. China currently dominates global demand for Chilean copper and lithium, but Kast could attract more Western-aligned investment by promoting legal certainty, officering incentives, and fostering partnerships with companies that meet high environmental and governmental standards.
Water management and drought mitigation: Chile is increasingly leveraging public-private partnerships to improve water management and climate resilience. Investments focus on both traditional infrastructure, such as dams, and natural solutions including reforestation and wetland restoration. There is demand for technologies that enhance water efficiency, like advanced treatment and recycling systems, data-driven water management tools, and construction waste reduction. Sustainable agricultural practices that conserve water and lower input costs also present promising opportunities. Water management could become a strategic priority for Kast, with the advancement of such projects allowing the administration to deliver visible results, balance regional needs, and contribute to Chile’s robust agriculture sector.
Seismic-resilient infrastructure: Situated on one of the most active fault lines in the world, Chile experiences frequent earthquakes, including several above magnitudes of eight. Critical infrastructure—such as ports, airports, and energy facilities—requires modern seismic design. There is strong demand for engineering and technology services in risk modeling, resilience planning, and early warning systems. Opportunities include digital twins, smart sensors, and integrated solutions to strengthen utilities, transportation networks, and urban development.

How can the new Kast administration help unlock Chile’s economic potential and attract investment?

Visit Washington before the March 11 inauguration. This would reinforce Chile’s shared interests in economic security and investment cooperation, present project pipelines aligned with DFC priorities and clarify Chile’s commitments in areas such as energy transition and trade. Early engagement would allow Chile to secure a proactive position in shaping US investment decisions, demonstrate commitment to close cooperation with the United States, and build political support in the US Congress and executive branch for stronger bilateral financing ties. When in Washington, use the visit to generate broader public interest in the importance of Chile as a strong US partner.
Identify emerging skills and priority growth sectors in Chile and encourage private-sector programs that link education directly to industry needs. Kast can do this by providing tax incentives and speeding up the processing of paperwork for companies involved in workforce training. Scholarships, vocational training, apprenticeships, and partnerships with universities that teach technical skills can help equip students and current workers with the skills required for mining, technology, energy, and other strategic industries.
Maintain continuity in key policies on permitting reforms. This applies to policies such as the Ley de Permisología, which aims to streamline and coordinate environmental and sectoral permitting across government agencies, and they should be expanded to ensure that the ministries and offices involved are actively collaborating with each other. If government entities are not coordinating—for example, in the processing of environment permits—the procedures for key sectors such as mining and technology will continue to be delayed. Demonstrating consistency will reinforce Chile’s reputation as a stable investment destination and encourage both new and reinvested capital.
Avoid over-centralizing these initiatives in Santiago. This can be done by collaborating with regional partners or established private-sector actors to develop and train local workforces. This could include local recruitment, training programs at regional universities, and ongoing partnerships between the government and private sector.

These measures strengthen security in ways that matter for investors by creating clearer rules, steadier institutions, and stronger local trust. When the government improves workforce training and expands formal job opportunities, it reduces pressures that fuel crime in regions tied to mining and energy. Better coordination on permits lowers chances of corruption or operational disruptions because companies face fewer conflicting decisions from different agencies. Together, these steps create a safer and more predictable environment for investors.

Conclusion

Chile remains a trusted and stable partner for the United States. Its democratic values, institutional strength, and openness to trade make it a strategic destination for US investment. But sustaining and expanding this partnership will require continued economic reforms and political engagement between both countries to ease processes for doing business, improve regulatory efficiency, enhance human capital, and foster political stability toward a robust, long-term strategic partnership. As Kast prepares to take office, he has an opportunity to set a foundation to ignite Chile’s economic growth and attract investment. And with the Western Hemisphere as a top priority for Washington, Chile has the potential to be an even more strategic partner to the United States.

The views expressed in this publication are those of the authors alone. Some of the investment opportunities discussed in this issue brief were informed by an October roundtable discussion on US-Chile investment relations, which included the participation of US and Chilean private-sector leaders, public-sector representatives, and multilateral organizations. The roundtable was organized in partnership with AmCham Chile and with the support of MetLife. Neither were involved in the production of this issue brief.

About the authors

Maite Gonzalez Latorre is program assistant at the Adrienne Arsht Latin America Center of the Atlantic Council.

Jason Marczak is vice president and senior director of the Adrienne Arsht Latin America Center of the Atlantic Council

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On critical minerals, the US needs more than just supply. It needs refining power.

Bart Piasecki — Tue, 25 Nov 2025 18:11:08 +0000

When China announced export controls on several critical minerals—including rare earth elements—and related processing technologies and materials this October, the United States well understood the enormous economic consequences such restrictions could carry. Washington rushed to the negotiating table, resulting in a one-year pause on the measures, wrapping up the latest round of tit-for-tat export control escalations between the two countries.

This episode illustrates the true power of critical minerals. They now sit at the center of economic policymaking worldwide, with advanced economies racing to secure reliable access to the metals that power the modern global economy.

It is no surprise that the global race to secure long-term access to these resources is accelerating. The list of critical minerals is extensive—the latest US Department of the Interior assessment identifies fifty-four such commodities. But four of them stand out for their strategic value: lithium, nickel, cobalt, and graphite. These minerals are foundational to the future energy economy, in part because they form the core inputs of lithium-ion technologies that power electric vehicles, drones, grid storage, and modern electronics. At the same time, key nodes of their supply chains are highly concentrated. Securing access to these minerals is essential for economic competitiveness, national security, and the global energy transition.

Serious players in the critical minerals landscape specialize in at least one of three key assets—and the assets that these countries lack can present strategic vulnerabilities. One asset is access to reserves or mineral supply, either through geographic fortune or effective dealmaking with nations that host these resources. A second is processing capacity. While raw materials matter, true strategic advantage comes from the ability to reduce dependence on others to make use of those raw materials. And a third is strong export capability, which depends on having either an abundant supply, advanced processing infrastructure, or, ideally, both.

For the United States, the picture is mixed when it comes to the first key asset. But it isn’t as bad as many assume. While the United States holds significant geological potential for various critical minerals, it has not benefited from the same geological fortune in several essential deposits. Even where resources exist, production is frequently uneconomical, permitting processes are highly restrictive, and robust environmental standards further constrain the ability to scale extraction and processing. What it does have, however, is a strong capacity for strategic dealmaking. Both the Biden and Trump administrations have been notably successful in securing deals with countries with reserves. The chart below illustrates just how effective these efforts have been.

US efforts to secure access to lithium, nickel, and cobalt supplies have been largely successful. Countries shown on the graph in green represent those with active critical minerals agreements with the United States. Notably, those agreements include the $8.5 billion deal with Australia, a country that holds substantial reserves of key resources. In addition, the United States benefits from its long-standing free trade agreement with Chile—a major lithium producer. Although the free trade agreement does not explicitly address critical minerals, it makes Chile eligible for US tax credits. This preferential status means that Chilean lithium can enter the US market without additional tariffs, effectively making Chilean exports more cost-competitive.

The United States continues to lag in securing formal access to graphite, with no completed agreements so far and only ongoing negotiations with Brazil and a few African countries, including Mozambique, Madagascar, and Tanzania. Graphite remains especially challenging because China controls roughly 90 percent of global output—including extraction, processing, and exports.

However, the absence of a deal on graphite or any other mineral does not mean the United States is inactive on the ground in countries that host important reserves. The United States uses its development agencies, such as the Development Finance Corporation, to support private-sector deals, especially in Africa.

Of course, there are the other two critical components of supply-chain power: processing capacity and exports. Using lithium as an example, the chart below shows that reserves are relatively well distributed across the globe. However, processing capacity is not. Refining is almost completely concentrated in just two countries: China, which controls about 65 percent, and Chile, which holds roughly 25 percent. Processing capacity also directly shapes export power. While countries such as Australia can export large volumes of raw materials, the real value in the supply chain comes from exporting processed products.

Looking again at the four examples of lithium, nickel, cobalt, and graphite, their combined global market value in 2024, based on my calculations, was roughly $100 billion, about the size of Luxembourg’s gross domestic product. For comparison, the global oil and gas market that same year was valued at around six trillion dollars. I estimate that by 2030, the market value of these four critical minerals is projected to nearly double to $186 billion. That figure isn’t slated to catch up to oil and gas soon, yet critical minerals are gaining rapidly in their strategic significance. As the transition to a modern, electrified economy accelerates, their importance will only continue to grow.

To address its vulnerabilities, the United States must now focus on building and securing access to adequate refining capacity. In their analysis, my Atlantic Council colleagues—Reed Blakemore, Alexis Harmon, and Peter Engelke—highlight US vulnerabilities and offer concrete policy recommendations, such as designing trade and partnership strategies to ensure access, stability, and resilience when a fully domestic supply chain is unattainable. Whatever path the current administration chooses, it is clear that expanding global processing capacity remains a crucial—and currently missing—step in strengthening supply-chain control and export competitiveness. Fortunately, when considering the capacity of the United States’ partners and allies, the overall picture is far more promising.

A strong example of cooperation between the United States and its partners is the recent US-Saudi agreement, which includes a deal to establish a critical minerals processing facility in the Gulf. The joint venture—bringing together mining group MP Materials, the US Department of Defense, and Saudi Arabia’s state-backed mining giant Ma’aden—will focus on rare-earth processing, a segment of the supply chain still largely dominated by China. Looking ahead, expect more of these public-private partnerships as the United States works to strengthen its critical minerals ecosystem.

Bart Piasecki is an assistant director at the Atlantic Council’s GeoEconomics Center.

This post is adapted from the GeoEconomics Center’s weekly Guide to the Global Economy newsletter. If you are interested in getting the newsletter, email SBusch@atlanticcouncil.org.

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Solving the US military’s gallium dilemma requires turning trash into treasure

Wed, 15 Oct 2025 13:00:00 +0000

In July 2023, China announced export licensing for gallium and germanium, sharply restricting flows and creating immediate friction across global supply chains. Spot prices for gallium spiked by more than 40 percent in Europe, leading to longer lead times andforcing chip fabs to draw down inventories and prioritize critical programs. Shipments could not leave China until licenses were approved, forcing sellers to wait, and some buyers to tap into stockpiles.

This event rattled more than just commodity markets; it exposed a fault line in the US defense industrial base.

Gallium has an outsized yet overlooked strategic value. Embedded in radars, missile seekers, secure radio frequency links, and satellite solar cells, this obscure metal is crucial for advanced electronic warfare systems. The United States produces no domestic gallium and lacks a government stockpile to cushion against Chinese weaponization.

This is the gallium dilemma: a small metal with huge consequences for US war readiness. Solving it does not mean new mines or scouring the globe for deposits. Instead, the United States must proactively recover gallium already flowing through the domestic industrial system—before it slips away as waste.

Gallium’s strategic stakes

Gallium is not a bulk commodity like copper or steel. The United States consumes only about 20 tons per year, enough to fit on a single flatbed truck. Yet that small volume anchors the entire US defense industrial base. Gallium is critical for the electronics supply chain and is needed for many advanced US weapon systems and satellites.

The irony is that gallium is both everywhere and nowhere. It exists in trace amounts in US ores processed daily, such as alumina, zinc, and coal residues. However, without a deliberate recovery strategy, gallium vanishes into waste products. China commands nearly 99 percent of primary output not because it discovered richer deposits, but because Beijing made the choice decades ago to recover gallium during aluminum production.

Export limitations should be treated as an opportunity to act before the next crisis. If an adversary can weaponize a couple dozen tons of gallium, then the United States’ economic, military, and technological edge is more at risk than most policymakers realize.

The supply dilemma

The United States cannot mine its way out of the gallium dilemma. Gallium rarely concentrates beyond a few parts per million, substituting invisibly into aluminum and zinc ores. Unlike lithium or copper, no ore deposit has been discovered in high enough grades to anchor a mine. The one historical exception was the Apex Mine in Utah, reopened in the 1980s to extract gallium and germanium from a uniquely enriched deposit. It shuttered within two years due to dipping commodity prices, ore quality issues, and costly metallurgy. Apex showed that primary gallium mining is not sustainable.

Apex’s closure left the United States wholly dependent on imports. Today, nearly all low-purity gallium originates in China, and only a single facility in New York upgrades imported feedstock and semiconductor scrap into high-purity metal. It is a critical capability, but far too limited to insulate war materiel supply chains from shocks. When China imposed export licenses, US buyers had no fallback beyond drawing down what little stock they held.

Other countries manage the risk differently. Japan and South Korea maintain government reserves of gallium as part of their broader critical minerals strategies. China is widely believed to hold state stockpiles, although quantities remain undisclosed. The United States, by contrast, does not include gallium in the Defense Logistics Agency’s Annual Materials Plan, nor is it present in the National Defense Stockpile.

Gallium is abundant in theory but inaccessible in practice. Every ton of alumina or zinc refined in the United States carries trace gallium. Capturing just 1 percent of that byproduct could meet US demand. But without dedicated recovery units, gallium disappears into red mud, slags, or smoke stacks.

US gallium security will not come from new mines; it requires policy choices that treat trace gallium recovery as seriously as any weapons program, especially before the next supply shock strikes.

From trash to treasure

The only path forward is to capture gallium where it already flows: existing industrial processes. A “waste to gallium” approach leverages infrastructure that already processes millions of tons of alumina, zinc, coal residues, and semiconductor scrap. The chemistry is proven. Now Washington must encourage industry to scale, qualify, and sustain output at the purity military materiel requires.

There are five ways for the United States to increase domestic supplies of gallium.

First, alumina refining offers the quickest way to increase the gallium stockpile. In aluminum production, most of the gallium dissolves into the caustic liquor, with the rest bound up in red mud waste. China’s decision to install capture units turned its aluminum refineries into a strategic asset. The United States has no such capacity today, though pilots are emerging. ElementUS, for instance, has 30 million tons of red mud in Louisiana and is testing flowsheets that recover gallium alongside iron, alumina, and scandium. The project underscores that, while gallium recovery rarely makes economic sense alone, it can be viable when folded into multiproduct strategies.

Second, zinc smelters can diversify sources and methods for gallium extraction, improving supply chain resilience. Gallium tends to concentrate in residues like jarosite and goethite, which can be leached and refined. Nyrstar, operating a major facility in Tennessee, has floated plans for a gallium-germanium recovery circuit capable of covering a significant share of US demand. The chemistry process is relatively straightforward and validated by National Laboratory tests, but financing remains elusive. Without targeted support, promising projects like this will never leave the drawing board.

Third, there is a need to secure gallium supplies through allies and partners. In 2025, Rio Tinto and Indium Corporation demonstrated gallium recovery at the Vaudreuil alumina refinery in Quebec, with pilot steps carried out in New York. European pilots like RemovAL are testing red mud leaching, while Japan and South Korea are investing in recovery processes. The pattern is unmistakable; countries that anticipate future scarcity are embedding gallium capture into their industrial ecosystems. US policymakers should encourage gallium recovery integration with allies and partners to maximize options.

Fourth, coal-based waste offers another gallium capture option. Fly ash and acid-mine drainage contain low concentrations of gallium. The Department of Energy has piloted mild-acid leach processes originally designed for rare earth elements that can be adapted to recover gallium. The economics depend on co-recovering other critical minerals, but the prospect of transforming waste piles into strategic feedstock shows the versatility of the approach.

Finally, the most overlooked—yet easiest—gallium recovery pathway is semiconductor scrap. A single US refiner in New York already upgrades scrap into high-purity gallium. While modest in scale, this capability provides military-grade material through shorter supply chains and clear traceability—advantageous for defense buyers who need secure, auditable sources. The United States should seek to increase the number of refineries recycling semiconductor scrap to build a high-purity gallium stockpile.

Three policy levelers for US gallium security

Recovering gallium from waste streams is not a scientific gamble; this chemistry has been proven for decades. What is needed are deliberate policy decisions to turn waste into war-ready gallium. Achieving this will require US financing, qualification, and stockpiling. Absent these choices, America’s industrial base will remain exposed to Beijing’s weaponization.

The first priority is qualification-first funding. For military applications, purity and delivery cadence matter as much as volume. Producing a few kilograms in a lab means little if the material cannot sustain continuous production at 99.999 percent purity or higher. The Department of Energy’s TRACE-Ga initiative, which requires 50 kilograms from a fourteen-day continuous run, is a step in the right direction. This model should be expanded, with defense agencies directly engaged to ensure outputs meet actual military needs.

The second lever is de-risking first-of-a-kind flowsheets. Banks rarely finance recovery circuits that have never operated at scale in the United States. Federal tools can fill the gap, including Loan Programs Office guarantees, cost-sharing through the Office of Clean Energy Demonstrations, and Defense Production Act offtake agreements calibrated in kilograms per month, not speculative tons per year. The Department of Energy has signaled nearly $1 billion in forthcoming funding opportunities across critical minerals, including byproduct recovery and processing. Targeted commitments would give investors confidence while avoiding stranded capacity.

Finally, Washington must establish a modest gallium stockpile. A reserve of at least 1,000 kilograms would buy time during licensing delays or supply shocks. Japan and South Korea already follow this gallium stockpiling playbook; the United States must now do the same.

As strategic competition deepens and global supply chains decouple, national power will hinge on securing the chemicals and materials that keep modern economies and militaries running. China’s export restrictions are a reminder that military success can depend on just a few kilograms of gallium. If Washington lets gallium slip into its waste streams, this hands Beijing more leverage.

The choice is clear. America must turn trash into treasure—or let rivals weaponize scarcity.

Macdonald Amoah is a communications associate at the Payne Institute for Public Policy where he conducts research on topics bordering on critical minerals and general mining issues.

Morgan D. Bazilian is the director of the Payne Institute for Public Policy and professor at the Colorado School of Mines. Previously, he was lead energy specialist at the World Bank and has over two decades of experience in energy security, natural resources, national security, energy poverty, and international affairs.

Lt. Col. Jahara “FRANKY” Matisek is a US Air Force command pilot, nonresident research fellow at the US Naval War College and the Payne Institute for Public Policy, and a visiting scholar at Northwestern University. He has published over one hundred articles on strategy and warfare.

Col. Katrina Schweiker is a US Air Force physicist and military fellow with the Defense and Security Department at the Center for Strategic and International Studies. She has spent a decade working at the intersection of science and technology and military strategy.

The views expressed are those of the authors and do not reflect the official position of the US Naval War College, US Air Force, or Department of Defense.

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Responsible stewardship models can transform Africa’s mineral wealth into prosperity

Mamadou Fall Kane — Tue, 14 Oct 2025 15:00:00 +0000

Bottom lines up front

As the global race for minerals critical to green energy tech heats up, African nations should manage their mineral revenues with sovereign wealth funds applying best practices from funds like Norway’s and Saudi Arabia’s.
Well-structured, credible sovereign wealth funds would lower risk, attract liquid capital markets, and facilitate strategic alliances for African nations.
By aligning resource wealth management with domestic industrial policy, African countries can move beyond extraction and play a greater role in global supply chains.

doWnload pdf

Current production of critical minerals is largely insufficient to keep up with rapidly growing global demand for cobalt, nickel, manganese, and other minerals that are essential for new green technologies.

Africa has a significant opportunity to capitalize on the large-scale investments currently unfolding in the global mining sector: Roughly one-third of the world’s metal reserves including copper, cobalt, lithium, and manganese are found there. If the continent can move beyond extraction to maximize value through refining, it has the potential to become a major global hub for the mining industry.

However, the extreme volatility of natural resource revenues leaves African economies vulnerable to external shocks from fluctuating commodity prices, which can lead to substantial economic downturns. Additionally, the capacity limitations and operational bottlenecks within African governments often hinder the effective conversion of resource revenues into productive investments and long-term benefits. Given that minerals are inherently finite resources, there is a risk of declining trade balances as the surge in mineral earnings may be offset by increased imports of goods and services. Concurrently, other sectors of the economy may experience a decline in exports, particularly those disrupted by the rapid expansion of the critical minerals sector, potentially leading to the phenomenon known as “Dutch disease.”

To mitigate these risks, many mineral-rich nations have established sovereign wealth funds as tools for fiscal and financial planning, supporting both short- and long-term policy objectives. The primary purpose of these funds is to manage mineral revenues transparently and sustainably, protecting domestic economies from the volatility of strategic mineral and petroleum revenues while promoting long-term economic stability. Industrialized and developing nations alike have adopted sovereign wealth funds as a mechanism to stabilize government spending, shield against inflationary shocks, and serve as an intergenerational savings tool for finite resources.

In the African context, effective management of natural resource revenues presents a unique opportunity to drive long-term economic development. By adopting best practices, these revenues can be leveraged to invest in human and physical capital, build economic buffers to weather external shocks, and create lasting financial reserves. Transforming mineral resources into financial or physical assets can benefit citizens and foster broad-based economic and social development.

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About the author

Mamadou Fall Kane is a nonresident senior fellow at the Atlantic Council’s Africa Center. He also is the deputy secretary of Senegal’s Strategic Orientation Committee for Oil and Gas, a committee created by the president to strengthen the management of natural resources following Senegal’s accession to the Extractive Industries Transparency Initiatives. He was energy advisor to the Senegalese president from 2016 to 2024. He graduated from Sciences Po Paris before completing his education at the Ecole Polytechnique of Paris in economics and public policy. He also holds an executive master’s degree in management and finance in innovation from the University of California, Berkeley.

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Critical minerals in crisis: Stress testing US supply chains against shocks

Reed Blakemore, Alexis Harmon, Peter Engelke — Thu, 09 Oct 2025 13:00:00 +0000

This issue brief was updated on November 19, 2025.

Introduction

Critical minerals are foundational to the modern economy and state power via their centrality to advanced technologies across energy, military, and commercial applications. From permanent magnets in fighter jets and submarines to the batteries in electric vehicles and grid-scale storage, these inputs underpin the defense, energy, and technology bases of the United States and its partners. Yet critical mineral supply chains have become increasingly brittle: concentrated in a handful of countries, overwhelmingly refined in China, and increasingly exposed to extreme weather disruption.

China has demonstrated its willingness to weaponize its dominance over mineral markets, tightening export restrictions on graphite, antimony, and certain rare earths in retaliation for US trade and technology controls. Meanwhile, extreme droughts and heat waves are already disrupting mining and processing in regions the United States hopes to rely on for diversification. Policymakers are thus confronted with a stark question: How prepared is the United States to withstand a sudden, sustained disruption in access to critical minerals?

Policymakers in Washington are increasingly focused on mapping US critical mineral needs and boosting domestic production capacity to manage dependency risks. Given the long lead times for the development of critical mineral mining, processing, and manufacturing assets, even aggressive expansion of new, derisked supply chain activity may not yet bear fruit in time to protect the United States from a severe supply chain disruption.

To explore this challenge, the Atlantic Council, in partnership with TMP Public, convened a scenario workshop in July 2025, bringing together experts from government, industry, and academia.¹ Through two stress tests—one geopolitical, one extreme weather-driven—participants mapped the likely impacts of severe mineral disruptions, the limits of the current US response tool kit, and the role that allies, markets, and industry could play in bridging vulnerabilities.

This paper distills the insights of that exercise. It first outlines the scenarios presented, then explores the policy toolbox available to the US government and companies, before concluding with the key lessons and policy recommendations that emerged. This report’s focus is not on providing comprehensive policy recommendations to fix the structural challenges facing minerals development but rather on the US ability to respond to a major supply chain disruption.

All of this analysis is framed against a risk framework for critical mineral supply chains crafted by the Atlantic Council Scowcroft Center and Global Energy Center in June 2025. The findings highlight a concerning challenge: While the United States government and industry have some tools to manage a mineral crisis in the short term, their abilities to sustain resilience in the face of protracted disruption remain dangerously underdeveloped.

Workshop: A two-stage scenario exploring supply chain disruptions

Given widespread industry and policymaker concerns about China’s market dominance across a wide variety of critical mineral markets, the workshop covered a two-stage scenario. The first stage, Scenario A1, centers geopolitics when a de facto ban on Chinese export licenses sets off severe supply constraints. The second stage, Scenario A2, adds an extreme weather-driven crisis that compounds the challenge arising in Scenario A1. This two-stage workshop model was designed to map the public- and private-sector tool kits that could be employed as supply becomes increasingly constrained. In both stages, participants underscored that the United States would need to rapidly activate emergency tools (e.g., Defense Production Act, stockpiles, allied sourcing) while confronting the reality that scaling alternative production or processing capacity would take years.

Table 1: Scenarios A1 and A2 overview

Scenario A1: China imposes an effective ban on certain mineral exports

Context: US-China tensions escalate amid trade wars and technology rivalry.

Challenge: China implements an effective export ban on three strategically vital minerals: neodymium (Nd), dysprosium (Dy), and refined manganese (Mn). In this scenario, China chooses these three minerals because of the severe impacts of their shortages across energy, defense, and other spaces on the United States and its allies and partners. China instructs firms not to issue export licenses for Nd, Dy, and Mn to US companies. Negotiations between the United States and China on this issue have stalled. China’s deep dissatisfaction with the talks suggests that the export ban is a strategic, long-term move by the Chinese rather than a short-term negotiation tactic. The licensing regime takes full effect one month from the start date of the exercise.

Rationale:
– Dual-use applications provide diplomatic cover.
– Aimed at undercutting the US defense sector, in addition to US competitiveness – in AI, semiconductors, electric vehicles (EVs), and clean energy.
– Relatively low cost to China; high strategic impact on US security, economy, and politics. A one-year disruption of Nd, Dy, and Mn (sulfate and dioxide) supply would result in a $154 million, $1.6 billion, and $96 million reduction in US gross domestic product, respectively.

Immediate consequences:
– US public and private stockpiles will be depleted within weeks to months.
– Defense and civilian industries face hard trade-offs over allocation.
– Prices spike globally as markets scramble for alternative suppliers.

Scenario A2: Extreme weather-induced supply shock across source countries

Context: As the United States turns increasingly to other partners to mitigate the effects of Scenario A1’s export restrictions, the world faces severe drought and extreme heat over several years in a number of critical mineral-producing regions, including China, Southeast Asia, Australia, and southern Africa. These weather-driven impacts are compound shocks that worsen the Chinese export restrictions that remain in effect in Scenario A1, impacting Chinese processing facilities, as well as mining operations in Australia, South Africa, and Burma.

Challenge: Extreme weather reduces mining output, limits hydropower for processing, increases equipment failure and operational downtime, and intensifies competition for water with local communities. Supply chain interruptions ripple across production timelines for rare earths and Mn.

Rationale:
– Extreme weather-induced hazards exacerbate the strategic vulnerabilities already highlighted in Scenario A1.
– Extreme weather is increasingly frequent and unpredictable, creating a chronic risk to mineral supply chains.
– Even without Chinese export restrictions, these natural events could critically constrain global supply.

Immediate consequences:
– Production delays in affected areas reduce potential alternative supply and increase prices, leaving the United States and allies with limited options.
– Options for diplomatic work-arounds narrow as each country protects their domestic supply.

Table 2: Impact timelines

While the impact timelines in Table 2 show how disruption unfolds, the toolbox in Table 3 reveals what tools the United States can use to respond. These assessments reflect the authors’ analysis of how each tool would function in practice across both short-term crisis management and longer-term resilience building. Here, “short-term impact” refers to how effectively a tool can buffer immediate disruption and ease pressures within months, while “long-term impact” captures a tool’s ability to reshape market structures or expand supply over years.

Table 3: US response tool kit

Discussion: Scenario A1: US response to Chinese mineral export curtailment

Rapid curtailments of Chinese exports of Nd, Dy, and Mn would have immediate and cascading consequences across United States supply chains.

Both US manufacturers and government agencies have limited stockpiles to buffer disruption. The main US mineral stockpile, the National Defense Stockpile, is intentionally small as it is designed to meet critical defense needs in crisis situations, not sustain broader industry during shortages. Public data on mineral stockpiles have been limited since 2022, but data on potential acquisitions show that supplies of Nd, Dy, and, even more importantly, their derivative products that are closer to end use (like neodymium-praseodymium [NdPr] oxide and neodymium magnets, most commonly NdFeB magnets) likely have vanishingly small reserves. Many manufacturers keep small working inventories, but these generally last only a few months before shutdowns begin. In their current form, rare earths stockpiles can keep defense and manufacturing afloat for a brief disruption but offer little resilience overall.

For Mn, the National Defense Stockpile had 291,000 metric tons (t) and 114,000 t of metallurgical-grade Mn ore and high-carbon ferromanganese, respectively, as of 2021, numbers that have likely held steady. Both are helpful for keeping steel production for perhaps a year; neither has any impact on the industries affected by the Chinese ban on Mn sulfate and dioxide, such as the battery industry.

Within weeks, firms would be forced to draw down private inventories for all targeted minerals. Smaller tier 2 and tier 3 suppliers, especially those in the defense supply chains, would feel the pinch first, with production delays compounding up to OEMs and defense prime contractors within three months. At the same time, speculative buying and transshipment through third countries would drive market volatility and rapid price escalation, making it even harder for firms to secure stable supply.

During the workshop discussion regarding Scenario A1, the policy interventions to limit the damage of the first three months after China’s ban vary in reach and effectiveness. The Defense Production Act (DPA) Title I, which authorizes the government to require US companies to prioritize contracts and allocate materials for national defense, can be used as an immediate bridge to reallocate existing supplies toward defense and other security priorities, but it cannot expand supply in the near term. Ultimately, the DPA is useful for emergency coordination, but obviously cannot conjure a resource that is not there.

DPA Title III, which provides financial incentives to expand domestic industrial capacity, could accelerate investment in alternative mining or refining, but actual production would take months or years to materialize. Moreover, its impact differs across the three minerals in our scenario. Domestic Mn and Nd production could grow, but Dy is challenging to source outside of China; the DPA also can do nothing to address which minerals are or are not in the ground in the United States. As a result, while the DPA can ensure the embargo’s effects are delayed for critical national security needs, its effectiveness as a short-term tool is constrained by what materials are currently stockpiled and available on the market.

The Export Administration Regulations (EAR) provide tools to ensure there is no leakage of minerals already in the United States, but with only sparse US production, impacts are limited. For example, the United States could invoke short-supply controls (EAR Part 754) to restrict exports of Mn, Nd, and Dy already in the US market, preserving availability for domestic industry. Export controls on key US exports, like semiconductors, could also serve as leverage in negotiations with China, signaling reciprocal action or broader retaliation.

Beyond regulatory measures, financial tools are critical across the near-, medium-, and long-term under Scenario A1. Loans, guarantees, and tax credits could derisk new refining and magnet production projects outside China, while underwriting short-term diversification of Mn processing. Other key interventions with longer time horizons include permitting reform, which could accelerate approval for domestic refining, processing, and recycling projects, though the benefits would be realized only after several years.

In parallel, diplomacy would be an indispensable tool under Scenario A1. Stockpiles could temporarily cushion defense-critical uses, but consumer industries would remain highly exposed. Coordination with allies—such as Japan and South Korea, which have notably robust stockpiles—could help mitigate impacts. This is based on two assumptions: first, that allies would be willing to expose themselves to Chinese retaliation; and second, that allies would not be protective of their stock even as prices surge. Trust and coordination do not tend to surge during commodity crises.

Even if allies are still willing to proceed, the United States would have to prove itself to be the best buyer in a globally constrained market. To prepare, the US could organize prenegotiated crisis-coordination agreements to harmonize stockpile releases and reallocate scarce supplies. This would not counter a global shortage since countries would prioritize their own supply security, but it could help undermine targeted adversarial actions or localized shortages, such as the one outlined in our scenario.

The US could also turn to emergency procurement and contracting, pursuing direct arrangements, for example, with suppliers in Australia and Vietnam for rare earths or Japan and Belgium for Mn. However, volumes outside China are extremely limited, and the risk of fragmented, inflationary bidding wars is high. To counter this, the government could encourage OEMs and defense prime contractors to form purchasing consortia, consolidating buying power and reducing competition among US firms.

Even with these stopgaps, in the first year the United States would likely only recover a fraction of lost supply. Optimistically, alternative sources might replace only about 10 percent of US demand—even less for Dy—that was previously fulfilled by China for each embargoed mineral. The disruption would thus remain severe, shaping both production capacity and market dynamics for years to come.

Key lessons under Scenario A1

The United States has a severely limited tool kit to manage the immediate consequences of a Chinese embargo on Nd, Dy, and Mn. The discussion of this scenario reinforced some of these limitations, while highlighting several key lessons.

The US government needs a clearer cross-agency map for crisis management

Contrary to other national emergencies, significant institutional gaps challenge the speed and effectiveness of the US response in this scenario. This includes a dangerously limited awareness of the United States’ own true exposure, particularly in the private sector where mineral and precursor inventories are largely unknown, clouding any assessment of where vulnerabilities lie or how significant they may be.

This is further complicated by the lack of an interagency response playbook. Though interagency participation in addressing US dependency on these minerals has increased in recent years, these efforts remain highly siloed, limiting the United States’ ability to mitigate the immediate consequences of the embargo. One such example is the Department of Defense: Though it is currently the most capable of distributing stockpiles and leveraging the DPA, its mandate requires it to prioritize disbursements toward national security-related customers. Without clear signals or a policy change to develop more robust support for the commercial sector or alleviate price pressure, exposed sectors could face severe shortages while relying on slower, longer-term supply chain interventions like asset development.
Stockpiling is necessary but insufficient

Available US stockpiles sit almost entirely within the National Defense Stockpile (NDS), which by statute is narrowly designed to support defense needs and lacks the flexibility and scale to buffer the wider civilian economy. Even with rapid acquisitions in the thirty days remaining before a full embargo (as outlined in the scenario), the US government and private sector would only be able to build a partial inventory.

Stockpiling is also uniquely difficult in the mineral sector. Many existing stockpiles are ore heavy, meaning they cannot directly support manufacturing without parallel investments in refining and magnet-making capacity. Even a “sufficient” stockpile of raw inputs may be ineffective if midstream bottlenecks persist, limiting the buffer that stockpiles can offer. In practice, stockpiles are often more useful for derisking new mineral projects by countering price manipulation than for filling market gaps during a crisis.
Engaging allies is critical—and challenging

Given domestic limitations, US crisis response would require engagement with trusted partners on several fronts. First, purchasing existing stockpiled resources from partners and allies such as Japan and South Korea, which possess much healthier stockpiling programs than the United States, could provide some relief. Second, the use of partner groupings could help US firms navigate market volatility, either through the establishment of buying consortia or trade tools to establish US firms in a more competitive position.

This, however, is complicated on several fronts. Not only might allies not have sufficient supplies to buffer US supply, but many potential partners are also themselves highly dependent on Chinese flows in one way or another, potentially constraining their willingness to participate. Past supply crises, from the 1973 oil embargo to the scramble for COVID-19 vaccines, show that even close allies often default to self-preservation when critical resources are scarce.
Longer-term resilience requires whole-of-supply-chain investment

Tools like DPA resource allocation, export controls, or emergency procurement help cushion national security needs, but none fundamentally resolve shortages and dependency. Diversifying sources and expanding domestic processing capabilities are multiyear or even multidecade endeavors. Without sustained, coordinated investments across mining, refining, and manufacturing, the United States remains highly exposed to prolonged embargoes and similar disruptions in critical mineral supply chains.

Discussion: Scenario A2: Extreme weather disruptions in key-producer countries deepen the crisis

Scenario A2 builds directly on the conditions of Scenario A1. Chinese export restrictions remain in place, but the challenge deepens as extreme weather events—in this case, drought and heat—further disrupt neodymium, dysprosium, and manganese processing and refining. In Scenario A2, drought and heat halt operations in mineral-producing countries such as China, South Africa, and Australia, cutting off access to raw materials that underlie global energy and defense supply chains. This scenario was designed to highlight how natural disasters can trigger acute critical mineral shortfalls and drive chronic instability.

Number of annual hours at or above the strong heat stress threshold under the Universal Thermal Climate Index (UTCI), a measurement that assesses the human body’s reaction to environmental conditions, as projected for a mine and processing facility in Australia in 2027. Source: TMP Public

Natural disasters, including extreme drought, heat, and flooding, are most acute in the upstream segment of the value chain, where operations are tied to physical geography, water availability, and energy infrastructure. For example, extreme heat may restrict workforce availability due to safety concerns and damage power systems. Midstream and downstream industries feel the effects later, but shortages in refined inputs ripple outward to global manufacturers of batteries, magnets, and other critical technologies. Unlike Scenario A1, where lost Chinese volumes might be partially offset by alternative sources, underlying production capacity itself is constrained in this scenario, removing physical capacity from global supply chains and making substitution far more limited.

The timeline of disruption under Scenario A2 differs from the rapid cascade modeled in A1. In the immediate term, extreme weather may halt operations at specific mines or smelters, causing localized shortages but not necessarily triggering a global supply crunch. Within one to six months, if alternative sources are unavailable, these outages compound into tightness in global markets, with prices spiking and downstream consumers forced to draw down inventories. Over six months to two years, repeated or prolonged shocks reduce confidence in the reliability of specific supply regions, deterring investors locally while accelerating efforts to diversify sources.

Governments and firms retain access to the same emergency tool kit—DPA authorities, stockpiles, export controls, and financial incentives—but in this scenario those levers are even less effective. Unlike an export ban where supply still exists somewhere in the system, extreme weather-driven production losses reduce the global pie. Stockpiles, already modest and dwindling, would offer little comfort and may be completely depleted. The DPA could still reallocate minerals for defense needs, but new production contracts would still take years to bear fruit. Financial support and permitting reform likewise remain slow-burn solutions.

Two features distinguish this scenario from a geopolitical shock. First, the cumulative nature of disaster risk elevates the role of adaptation and resilience. Forward-looking firms are already beginning to price such disruption into their business models, investing in diversified water sources, backup power systems, and more flexible logistics. However, these practices remain uneven and underdeveloped, with only a select few of the larger players having the capital to consider absorbing higher upfront costs. Without a stronger policy framework to incentivize and scale climate adaptation, smaller firms and entire supply chains will remain vulnerable, unable to respond beyond cutting production.

Second, diplomacy takes on a new shape. In this scenario, the United States would have less ability to rely on allies for stockpiled minerals or backdoor access to Chinese materials. Allied producers may themselves face shortfalls related to extreme weather and are even more likely to prioritize domestic demand. Instead, engagement would focus on negotiating with producers like Australia and South Africa to prioritize US flows and investing jointly in natural disaster-resilient infrastructure around mine sites. These steps could not eliminate the shortfall, but they would help build a foundation for future resilience.

Key lessons under Scenario A2

As under Scenario A1, the United States has a limited tool kit to manage the consequences of extreme weather-driven limitations of global production of Nd, Dy, and Mn. The workshop discussion revealed several insights that both US government and allied policymakers should take more fully into account.

Diversification must account for shocks driven by extreme weather and natural disasters, not just geopolitics. Unlike a politically motivated embargo where trade can be rerouted, extreme weather events can temporarily or permanently remove production capacity from even trusted foreign or domestic sources. Therefore, resilience cannot just focus on nearshoring or friendshoring supply chains but rather must be redundant and geographically distributed so they can absorb shocks from natural disasters as well as geopolitical action. Furthermore, uneven exposure to extreme weather means that while resource quality and cost remain paramount, sourcing decisions may increasingly prioritize regions with lower disaster risk, even if the resources are otherwise less attractive. Recycling and circularity also offer parallel sources of supply that are more insulated from disaster-driven shocks. Expanded magnet recycling, for example, could help stabilize Nd and Dy availability, providing a buffer against both short-term shocks and chronic scarcity.
Adaptation is inseparable from mineral security. Disaster risks are not a distant concern but a material, immediate factor shaping global mineral flows. Larger companies increasingly recognize this and are investing accordingly by integrating weather-related risk into their operations and financing. For example, for Mn producers in water-scarce regions, ignoring drought or heat is not an option. While some leading firms are working to internalize these risks, many others are completely unprepared. Companies can pursue comprehensive, system-level shifts, such as market-based approaches that price in such disruption risk and help incentivize resilience and resource allocation. Smaller firms, however, often lack the capital to invest in adaptation at scale, leaving them disproportionately exposed. Zooming in to site-level adaptation, many companies already have localized measures in place, such as water management, community partnerships, and diversification of energy supply, but these are rarely sufficient as disasters increase in frequency and intensity. Meanwhile, governments have largely failed to plan, often treating a mineral strategy as divorced from disaster resilience. Without a policy framework that incentivizes and supports adaptation across the whole supply chain, national security and industrial priorities remain at the mercy of disaster-driven shocks.
Institutional readiness for nonadversarial supply shocks is underdeveloped. The scenario underscored the absence of clear government processes for responding to disruptions caused by extreme weather events rather than hostile actions. Agencies could struggle to decide whether trade, energy, or defense authorities were in the lead, obfuscating agencies’ sense of ownership and slowing response. The United States needs a coherent interagency framework that treats climate-linked disruptions as a strategic risk category, complete with predefined authorities and operational playbooks, rather than assuming only adversarial actions will threaten supply.
Short-term emergency tools cannot replace preemptive resilience. Emergency tools offer short-term relief but cannot substitute for supply chains resilient to multiyear disruptions such as long-term drought. This scenario underscores the importance of preemptive investment in resilience, be it diversifying the energy inputs that power mining and refining or embedding redundancy through alternative suppliers and recycling. Such shocks will not wait for permitting reform or procurement contracts; resilience must be in place before the disruption arrives.

Conclusion: Preparing for crisis

Whether triggered by deliberate policy in Beijing or extreme weather around the world, the United States and its allies are just one disruption away from insecure supply chains for the minerals most critical for defense readiness and energy build-out.

Across both scenarios, a core set of emergency policy tools recurred: the DPA, the National Defense Stockpile and private stockpiles, emergency procurement authorities, and diplomacy. These instruments can help soften the immediate blow and reallocate scarce resources to mission-critical sectors. However, the exercise revealed that their effectiveness is uneven in crisis scenarios. Some tools, such as stockpiles and DPA prioritization, can only redistribute or smooth supply; they cannot generate new production and, by design, remain poorly calibrated to the scale and duration of potential crises. Other tools, such as permitting reform and financial incentives, are inherently long-term plays, essential for resilience, but irrelevant to short-term crisis management. Diplomacy’s ability to counter emergency shortages, meanwhile, is contingent on circumstances: Scenario A1 creates conditions where third-country suppliers can still channel volumes toward allies, but in Scenario A2, partners face similar supply constraints, limiting diplomacy’s utility as a stopgap. In the longer term, coordination on diversification remains a particularly powerful tool, though robust multilateralism has been slow to manifest in practice.

Diversification emerged as the single most important theme, but the scenarios showed that not all diversification strategies are created equal. In a geopolitical shock like Scenario A1, diversification is about reducing reliance on China by cultivating alternative partners and trade routes. In an extreme weather shock like Scenario A2, diversification must be about physical redundancy: ensuring supply chains are geographically distributed enough that a drought, flood, or cyclone cannot take out a large share of global capacity in one stroke. Recycling and circularity take on greater weight here, offering supply streams that are less vulnerable to both political and physical disruption.

When both scenarios are layered on top of each other, it becomes clear that US and allied supply chains would be hard-pressed to absorb just one of the above shocks, let alone both compounded. Existing mitigation and diversification strategies fall far short of what would be needed to maintain supply under these conditions. A key question for policymakers is whether current strategies are robust across both pathways or whether they remain overly skewed to geopolitical contingencies at the expense of disaster resilience.

The lesson of the scenarios is clear: Mineral security must be approached as a continuum of risks, where short-term tools and long-term strategies are designed in tandem and where geopolitical and disaster-related contingencies are addressed with equal seriousness.

About the authors

Staff

Reed Blakemore

Geopolitics & Energy Security Energy Transitions

Staff

Alexis Harmon

Assistant Director

Senior Fellow, GeoStrategy Initiative

Critical Minerals Geopolitics & Energy Security

Staff

Peter Engelke

GeoStrategy Initiative Global Energy Center

Technology & Innovation

Acknowledgements

The Atlantic Council would like to thank TMP for its support of this project.

This report is written and published in accordance with the Atlantic Council’s policy on intellectual independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions.

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The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

1 This workshop was held under the Chatham House Rule. The contents of this paper and its conclusions, though built from the workshop discussion and complemented by additional research from the Atlantic Council, are not endorsed by and do not necessarily reflect the views of the workshop participants.

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The critical minerals boom is an opportunity to integrate public health into mining operations

Connor Gregory, Ciara M. Weets, and Rebecca Katz — Tue, 23 Sep 2025 14:00:00 +0000

Bottom lines up front

Surging global interest in critical minerals presents a rare opportunity to fully embed public health protections into mining operations.
Mining companies that invest in disease surveillance, health infrastructure, and pandemic preparedness protect their bottom line and their social license to operate.
Development corridors like the Lobito Corridor can serve as testing grounds for cross-border health cooperation and integrated approaches to mining regulation.

As the global critical minerals race heats up, resource-rich African countries once again face a double-edged opportunity to harness a wave of investment and economic opportunity in the mining sector, while avoiding resource-curse pitfalls and advancing public health.

Global demand is booming for cobalt, copper, lithium, and other minerals important for the transition away from fossil fuels, and as a result, Africa is central to the global push for cleaner energy and supply chain diversification. But realizing the full potential of this moment requires more than just mineral extraction: It requires intentional and creative solutions that elevate public health as a strategic priority for investors, mining companies, and African governments.

From occupational hazards to infectious disease outbreaks, the African mining sector has a checkered public health legacy. But in this new report, Rebecca Katz, director of Georgetown University’s Center for Global Health Science and Security, shows that the current moment is a chance to change that. The wave of geopolitical attention and capital investment presents opportunities to strengthen health systems, surveillance, and regional cooperation across the continent. Realizing these benefits will require deliberate action and to ensure such projects deliver on their full promise, public health should be prioritized as a core consideration, not a peripheral concern.

The global race to secure critical mineral supply chains has drawn strategic attention and amid this shifting geopolitical landscape, public health represents one potential avenue through which new entrants might differentiate themselves from incumbents.

In addition to providing recommendations for key stakeholders, this report explores the intersection of mining and public health in Africa, spotlighting the Lobito Corridor and other prominent mining-driven development corridors and their implications for public health.

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Natural gas has a small but important role in Africa’s energy transition

Neil Ford — Tue, 23 Sep 2025 14:00:00 +0000

Bottom lines up front

Roughly 42 percent of Africa’s population lacks reliable access to electricity at home.
Using Africa’s sizeable untapped gas reserves to help electrify the continent is reasonable and fair, despite the need to cut emissions.
Electrifying the rest of the continent at the lowest possible climate cost within the next decade calls for renewables in most cases, and new gas-fired power plants in countries with gas and low electrification rates.

Limited access to electricity has long constrained both quality of life and economic growth across much of Africa. About 42 percent of the continent’s population still lives in homes without any access to national grids, mini-grids, or even standalone renewable systems.¹ ² With 19 percent of the world’s population, Africa accounts for just 3.1 percent of global electricity demand.³ Indeed, the majority of people without access to electricity live in sub-Saharan Africa.⁴ This depresses living standards and stymies commercial and industrial development across the continent.

Average annual electricity consumption in Africa (excluding South Africa) was just 180 kilowatt-hours (kWh) in 2021, compared with 6,500 kWh in Europe and 13,000 kWh in the United States.⁵ Most people in sub-Saharan Africa consume less electricity in a year than an average US fridge.⁶ Power supplies in the region are not only inadequate, they are often unreliable, with outages a feature of life from Nigeria to South Africa. Sub-Saharan Africa also has the lowest per capita gas consumption of any region, at less than one-quarter of the global average,⁷ and accounts for just 4 percent of global gas demand.⁸

According to the United Nations’ Sustainable Development Goal 7, UN member states committed to achieving “access to affordable, reliable, sustainable and modern energy for all” by 2030. This target will not be reached by that date as the current pace of progress is nowhere near fast enough to connect 600 million African people in the next five years. Still, a growing number of African governments are pushing for universal access to electricity for their countries, and helping them succeed should be a global priority.

It is critical to tackle this challenge now while electrification efforts are being stepped up and over half the African population has access to electricity at home for the first time. Moreover, a significant increase in power generation will be needed to achieve universal electrification at a time of massive demographic growth. The United Nations forecasts that the population of sub-Saharan Africa will grow from 1.3 billion at present to 2.2 billion by 2054 and 3.3 billion by 2100.⁹ Power demand will expand even further with the adoption of electric vehicles and construction of new data centers.

It is technically possible to rapidly increase African electrification rates through renewables backed up with battery energy storage systems (BESS), hydroelectric schemes, and geothermal power (where available). Yet change on such a scale would require massive global investment that is not a realistic prospect in the foreseeable future, particularly given the recent drastic cuts to international aid budgets by some western governments.¹⁰

Africa’s untapped and associated gas reserves can provide part of the solution by supporting renewable energy in boosting electrification rates.¹¹ Although gas-fired generation is typically more expensive than solar,¹² it delivers the baseload, round-the-clock capacity needed to fuel a rapid increase in intermittent renewable energy production. What’s more, there is a substantial amount of gas expertise in Africa, as gas is the continent’s primary source of electricity, accounting for 43 percent of production in 2024.¹³

In response to the climate crisis, fossil fuel output will taper down, but some production will continue for many years. Emissions from gas-fired plants are at least half as high as those from coal, making gas a driver of climate change. Yet the African continent accounts for such a small proportion of global per capita emissions that new gas projects on the continent would be fair and justified where they would have a demonstrable impact on living standards and where failing to develop them would act as a brake on electrification efforts. Moreover, as this report will demonstrate, gas appears to be either a necessary or commercially viable option only in specific African countries.

Gas-to-power projects carry high upfront investment costs but are often easier to finance when attached to big export projects. The United States and Qatar, in particular, are investing heavily in new liquefied natural gas (LNG) production capacity to satisfy global demand, but European gas markets are keen to secure new sources of supply to displace piped Russian gas, and many Asian countries are switching from coal to gas-fired generation. As a result, there is scope for both new African LNG plants and pipelines under the Mediterranean Sea that could support power production in much of West Africa, while also generating export revenues for Nigeria.

Securing financing for African gas projects will be a crucial challenge, especially in light of the high capital costs for operating projects on the continent and investors’ reluctance to fund hydrocarbon schemes in recent years. However, the new African Energy Bank and the Trump administration’s support for oil and gas investment could make a considerable difference. US Secretary of Energy Chris Wright said in March that the United States would partner with African governments and companies to support the development of projects using natural gas and other energy technologies, including by providing capital.¹⁴ Indeed, the Trump administration acted quickly to approve $4.7 billion in funding from US Export-Import Bank for TotalEnergies’ Mozambique LNG scheme.¹⁵

This report will set out why it is reasonable for Africa to develop its own gas reserves to drive electrification, explain how gas can fit into a broader energy transition on the continent, examine which countries would benefit from developing gas projects, and discuss the relationship between gas exports and local consumption. It will conclude with recommendations for how all stakeholders can utilize the continent’s natural gas resources to promote electrification at the lowest possible climate cost.

What role should natural gas play in Africa’s energy transition?

Most African countries account for a tiny proportion of global emissions but desperately need improved power supplies

¹⁶

Developing new gas-fired power plants in Africa to boost living standards and promote industrial growth would help the continent achieve a just energy transition.¹⁷ While effort should be made to rein in greenhouse gas (GHG) emissions in Africa as elsewhere, the energy transition burden of each country should be based on its absolute per capita emissions rather than year-on-year changes in its emissions. The world’s poorest countries, including most African states, have played a very small role in driving climate change, and Africa is responsible for just 3.7 percent of carbon emissions from burning fossil fuels—a far lower per capita share than any other region.¹⁸ Per capita carbon emissions in 2021 stood at 1.04 metric tons/year in Africa, four times less than the global average of 4.69 metric tons/year¹⁹ and far lower than the US average of 14 metric tons/year.²⁰

New African gas-fired power projects should be developed where they can help speed up much-needed electrification, particularly as new fossil fuel projects continue to be developed elsewhere. The United States plans to ramp up domestic oil production,²¹ while China began construction of 94.5 gigawatts (GW) of new coal-fired power plants last year.²² By contrast, South Africa—which has the biggest installed generating capacity on the continent—has a total generation capacity of just 63.4 gigawatts.²³

In the United States, after years of negligible new gas-fired capacity, developers are building a string of gas plants, leaving some to wait up to seven years for delivery of gas turbines.²⁴ A single Texas power company, NRG Energy, said on May 12 that it plans to acquire 13 GW of gas-fired generation capacity²⁵—seven times the total generating capacity of Uganda.

It was anticipated that a series of planned terminals would boost US liquefied natural gas (LNG) export capacity from 90 million metric tons per annum (mtpa) to 200 mtpa²⁶ even before President Trump lifted the ban on new projects. New gas-fired plants are also being developed in Europe, with 20 GW of new capacity planned in Germany by 2030.²⁷ It is therefore difficult to expect African countries to refrain from developing projects when the big polluters are failing to do so.

Asking low-emitting, energy-poor countries to forgo gas development while wealthier countries continue to expand their production capacity is hypocritical. According to the World Economic Forum in 2020, tripling African power production using gas-fired plants would only add 1 percent to global emissions.²⁸

Per capita emissions in most African countries are “lower than what is compatible with a 1.5C degree world, so even if they grow substantially, the continent would not exceed its fair share of emissions,” wrote a leading researcher on the need to assess Africa’s energy transition strategies on a country-by-country basis.²⁹

It is possible to integrate more natural gas within a broadly low emissions power sector

It is difficult to overstate the energy poverty of most of sub-Saharan Africa. With some notable exceptions, particularly in South Africa and North Africa, most of the continent has constrained access to reliable power supplies. It is easy to argue that this energy poverty should be overcome by focusing entirely on clean energy. The continent could leapfrog gas use and expensive gas infrastructure, in favor of moving straight to green technologies, in the same way that it has in large part bypassed landline technology in favor of mobile telecommunications. Solar should certainly be the centerpiece of power strategies in most African countries, considering the continent represents 60 percent of the world’s solar potential,³⁰ and yet it produced just 4 percent of all solar power in 2024.³¹

Africa also has attractive wind resources, although in more limited areas that include South Africa, Morocco, and Egypt. Geothermal energy is another very attractive contribution to any generation mix: It is a renewable source of energy that provides baseload energy because it is “always on.” However, it is available in only a few African countries, mainly along the line of the Great Rift Valley and most notably in Kenya.

BESS can store solar energy and then release it into grids for two to four hours to cover evening peak demand. Long duration energy storage (LDES) projects hold the promise of stabilizing longer-term fluctuations in intermittent power production.

Immediate and substantial investment is needed in these technologies, but they alone cannot achieve 100 percent electrification in many African countries in the near future. Solar power, for instance, may be cheaper than gas-fired capacity per unit of energy³² and will become even cheaper over time, but it does not produce power outside of daylight hours.

The BESS sector is at an early stage of development in Africa, as costs remain high and expertise low. As for LDES, the only commercially viable technology today is pumped storage hydro, which involves moving water between two reservoirs at different levels: The water is released downhill to drive turbines to generate electricity when it is most needed and then pumped back uphill during lower-cost periods when other technologies are productive. Pumped hydro storage helps to balance grids but is a net consumer of electricity and is technically feasible in only specific geographical areas.

A comprehensive rollout of BESS and LDES should make 100 percent clean energy in Africa possible one day, but most African countries will need a greater baseload power capacity to balance out intermittent sources of power production for a long time to come. Consequently, in the interim, they must be allowed to develop gas-fired generation capacity.

Key power sector terms:

Baseload technologies operate 24/7 except when they are undergoing maintenance. These include oil, coal, and gas-fired projects, geothermal power plants, and hydroelectric schemes, although output falls during periods of prolonged drought.
Intermittent technologies produce variable amounts of power: Solar power plants produce electricity only during the day and wind farms when the wind blows.
Battery energy storage systems (BESS) store surplus power, usually from solar projects during the daytime, to release it into the grid when needed, often in the evening.
Back-up power projects help maintain supplies when other forms of generation are lacking. These can include BESS, small-scale diesel generators, and even some gas-fired technologies that can be used only when required. However, building an expensive gas-fired plant for occasional use only is not commercially attractive without additional system payments. These payments are allocated to generators to reward them for being available to support the grid, in addition to each kilowatthour of actual electricity they produce, particularly during periods of peak demand.

More gas can complement the rollout of low emissions technologies. Developing new gas-to-power projects alongside renewables could help drive access to electricity in many African countries over the next decade. The renewables sector has taken off in a small number of African countries, led by South Africa, Egypt, and Morocco, with large projects currently in development elsewhere on the continent. Yet gas and renewables should not be viewed as an either-or choice: gas-fired projects can be paired with renewable energy and large hydro to provide grids with reliable power where renewable energy penetration is increasing.

Gas-fired plants could be used as back-up for solar and wind power, but this secondary role risks making construction commercially unviable in most markets. Financing is only likely to be secured for gas projects that provide baseload capacity;³³ still, these plants could be downgraded to back-up in the longer term.

Replacing back-up diesel generators with gas-fired capacity offers the added benefit of reducing GHG emissions. At present, millions of African homes and businesses rely on diesel generators to provide electricity when their national grids fail to meet demand. These generators produce 74.14 kilograms of CO2 per million British thermal units (Btu) compared to 52.91 kilograms for gas-fired capacity.³⁴

Fossil fuel power plants, whether gas, coal, or oil-fired, currently provide 75 percent of all electricity in Africa, with 25 percent coming from clean energy (7 percent from solar and wind and most of the remainder from hydro). And yet, 54 percent of new capacity added between 2020 and 2025 was clean energy.³⁵ Coal-fired power plants are the second biggest power-generation technology in Africa (after gas), but the picture is skewed because of its dominant role in South Africa, which hosts 84 percent of African coal-fired capacity.³⁶ Africa’s coal consumption has remained flat over the past two decades, and little new coal-fired capacity is planned, as highly polluting coal is increasingly overlooked.³⁷

Hydro schemes provide round-the-clock electricity but are devastated by droughts and generally not classified as renewable energy projects because of the impact on local communities, flora, and fauna during construction and flooding.

Building a diverse generation mix is a strategic method of balancing out variations in power production. As a result, new gas sector investment should not be made at the expense of renewable energy investment and must be seen as one element of a generally low emissions generation mix.

The benefits of technological diversity, including natural gas, can be amplified by greater cross-border power integration. For example, building high-capacity transmission lines to connect neighboring national grids allows electricity to be moved from areas of surplus capacity to areas of shortage. This helps each area focus on its strengths and even out variations in production. Similarly, a prolonged drought in one country may not affect hydro reservoirs in other countries, while gas-fired plants can stabilize power supplies over a wider area. There is already evidence of cross-border efforts, with power pools (where neighboring states share power production to some extent) at various stages of development in Southern, East, and West Africa.

Increased gas use in Africa has many potential benefits

Improving access to electricity, including via gas-fired power plants, will help boost living standards and drive economic growth in Africa, especially for the poorest half of the population that currently lacks any access at all. Consider the enormous benefits of having electricity: Even very small amounts enable children to do their homework in countries where it is dark by 7:00 p.m., medicines to be safely stored at the necessary temperatures, and electronic devices to be charged.

Restricted access to electricity and natural gas hampers efforts to attract manufacturing and industrial investment. Rising labor costs are driving manufacturing offshoring from China to Southeast and South Asia but not yet to Africa, partly because the continent lacks adequate infrastructure. Even if the electrification of industrial processes using renewables is likely in the long term, relying on gas produces lower emissions than coal in industrial processes such as steel and aluminium smelting.

Natural gas is important in the production of nitrogen-based fertilizers, both as a source of energy and as a direct input. At present, African fertilizer production is inadequate to satisfy national and continental market demand at prices farmers can afford, with average use in the sub-Saharan region less than 20 kg/hectare, compared to the global average of 135 kg/hectare.³⁸

Gas use can also yield important environmental benefits. In South Africa, unlike most other countries, synthetic fuels provide the bulk of its liquid fuel needs, with most synthetic fuel produced from coal but some from natural gas.³⁹ Switching more of this production from coal to gas would cut emissions.

Using gas for cooking, often in the form of liquefied petroleum gas (LPG), can substitute for kerosene and biomass (such as wood fuel), which contribute to 3.2 million annual deaths from household air pollution and accidents worldwide.⁴⁰ Biomass use also drives deforestation and reduces an environment’s ability to absorb carbon. In 2022, 970 million Africans, or 67 percent of the continent’s population, lacked access to clean energy for cooking.⁴¹

Switching to gas from coal improves air quality. Although natural gas produces roughly 50 percent of the GHG emissions of coal plants, it has other environmental benefits, particularly in terms of lower air pollution. Gas produces virtually no sulfur dioxide emissions or fine particulate matter,⁴² whereasparticulate matter from coal use results in 42,000 deaths a year in South Africa.⁴³

Improved access to electricity, including from gas-fired plants, would support some climate change mitigation strategies, including water desalination plants, air conditioning, cold storage, and the concrete and steel used in resilient infrastructure.⁴⁴ Finally, in the longer term, gas sector pipelines could be converted to transport green hydrogen—produced using renewable energy—to offer continued use by tapping a lower-emissions energy resource compared to natural gas.

On both climate and economic grounds, commercial outlets for gas that is currently flared are needed. Non-associated gas on hydrocarbon fields is only produced in order to be used, but gas is also associated with oil and other hydrocarbons, such as natural gas liquids, where it can be commercially marketed, reinjected to aid oil production, or flared to dispose of it. Flaring creates emissions without any commercial benefit and releases more than 350 million tons of CO2 worldwide, more than Egypt’s total emissions in 2023.⁴⁵

In addition to ending gas flaring, the global warming impact of gas projects can be minimized by reducing methane leakage during LNG transport and through carbon capture, utilization, and storage (CCUS). CCUS involves storing carbon from gas-fired power plants and industrial facilities underground, or using it in commercial projects, including in synthetic fuel production.

The commercial rollout of CCUS is only starting to take off worldwide, and it will likely be many years, if ever, before its use is prevalent in Africa. All CCUS options require increased energy use, additional equipment, and state support on early-stage projects.

The ideal generation mix varies greatly among African countries

Decisions relating to the role of natural gas should be made on a country-by-country basis. Because conditions are not uniform across the continent, there is no single approach that should be implemented in all markets.

Some African countries have already launched universal electrification programs. Kenya’s push to hit the 2030 SDG 7 target is discussed later, while twelve countries, including Democratic Republic of Congo (DR Congo) and Nigeria, published detailed plans in January 2025 to connect more people to their respective grids.⁴⁶ Yet the best route to achieving full connectivity varies from country to country.

Each country’s energy transition must be feasible within the context of its economy, geography, and natural resources. Rather than offer “unhelpful generalisations,” the international community must “embrace and support nuance and country-specific analysis,” as Youba Sokona, author and vice chair of the Intergovernmental Panel on Climate Change, said in 2022.⁴⁷

If universal, reliable electrification can be achieved in the medium term without recourse to natural gas, then new gas-fired plants should be avoided given their relatively high life-cycle emissions. However, countries with relatively low electrification rates and significant gas reserves should be encouraged and supported in building gas-to-power projects.

Angola, Cameroon, Congo-Brazzaville, Mauritania, Mozambique, Nigeria, and Tanzania would all fall into this category. Gas-fired plants would be particularly useful in Nigeria, Angola, Gabon, and Congo-Brazzaville because they flare large amounts of gas. It would also apply to West African countries that can reap the benefits of the coastal gas pipeline between Nigeria and Morocco, which has been proposed to remedy the generally low electrification rates across the region.

Nigeria has enough gas to reach 100 percent electrification—hopefully in conjunction with more rapid renewables development—but gas industry growth has been hampered by attacks on gas infrastructure and low regulated domestic prices.

Algeria has achieved 100 percent electrification but could divert gas that is currently flared to provide additional generation capacity.

Flaring is a problem in Libya and Egypt as well, but financing new power plants in conflict-torn Libya would be difficult, while Egypt is struggling to balance gas exports with domestic requirements. Countries with existing upstream gas operations already have the infrastructure and expertise in place to support new gas-to-power projects. Investment there should focus on transmission connections between gas fields, power plants, and other industrial offtakers or buyers.

Ahead of the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27), hosted by Egypt in 2022, academics from fifty institutions, including many in Africa, produced a paper calling on the Global North to stop thinking of the continent as a “homogenous collective” with similar energy needs and a common route to net zero.⁴⁸ The research, published in Nature Energy, compared the situation in four African countries: Burkina Faso, Ethiopia, Mozambique, and South Africa.⁴⁹ The researchers offered the following recommendations for balancing electrification with climate concerns in those countries:

Burkina Faso should opt for a combination of solar and diesel projects. The country has a limited power grid, high power costs, and restricted access to finance, so smaller-scale, local solar and diesel projects are favored in addition to improved cross-border transmission connections, rather than building expensive gas import infrastructure. With an electrification rate of just 20 percent, the country needs to focus on cheap and quick solutions.
Ethiopia can continue to rely on large hydro, having built 5,250 MW of dam projects over the past decade, with another 12,000 MW in the development pipeline.⁵⁰ The hydro sector now provides 90 percent of its electricity and can be complemented by growing solar and wind power investment. Ethiopia can also use hydro schemes as batteries to compensate for variation in intermittent power production, so gas is unlikely to play a role here.
Mozambique should develop gas reserves for domestic supply alongside LNG projects to provide the baseload capacity needed to balance intermittent renewables production and increase the electrification rate from the current 44 percent.⁵¹ Providing that security challenges in the far northeast of the country are overcome, Mozambique is set to become one of the world’s biggest emerging LNG exporters, so dedicating a small proportion of gas for power and fertilizer production could significantly boost living standards. The government is backing new gas-fired capacity while banking on off-grid solar for rural electrification.
South Africa should combine solar and wind projects with BESS because it would be cheaper and faster than building gas-to-power plants to move away from king coal. The country already has one of the most developed renewables sectors on the continent and is currently developing its first utility-scale BESS projects.

It might be expected that South Africa would be an ideal candidate for gas sector investment. Coal provides 81.6 percent of its generation mix, so switching coal for gas would substantially cut emissions. South Africa produced 394 million metric tons of carbon from all fuel combustion in 2022, the most on the continent, 1.2 percent of the global total and a 40 percent increase over 2021.⁵² Fuel combustion emissions come from thermal power generation and internal combustion engine vehicles, with coal plants accounting for 83 percent.⁵³

Previously developed South African gas-fired power plants have suffered from lack of gas feedstock, and domestic gas reserves are limited, so efforts to reduce emissions have focused on renewables. Power utility Eskom plans to build a 3,000 MW gas-fired power plant near Richards Bay backed by an LNG import terminal by 2030, with a smaller terminal planned for Ngqura. Yet, import projects have fallen through in the past, and gas is unlikely to play a big role in South Africa.

Research by the International Institute for Sustainable Development (IISD) in 2022 concluded that gas will not be needed for South African power sector within the next decade—in part because solar and wind power was 57 percent cheaper than gas-fired plants⁵⁴ and short lead times for developing solar projects make them an attractive response to the country’s ongoing power supply crisis. South Africa also has 2,832 MW of pumped storage capacity out of national capacity of 63.4 GW to act as LDES.⁵⁵ The IISD also found that coal-fired plants can provide back-up capacity in the medium term, while three-hour BESS facilities are 30 percent cheaper than simple cycle gas plants—the most suitable gas plants in this instance—for covering peak demand.⁵⁶

Still, gas imports could play a growing role in South Africa’s synthetic fuels industry. Sasol, a South African producer of synthetic fuels, currently uses 185 petajoules (PJ) of gas a year, of which 160 PJ/yr is imported by pipeline from southern Mozambique. As these fields become exhausted, alternative sources of gas are needed, including recent discoveries of domestic gas.⁵⁷

Kenya, like South Africa, is a country where gas-fired plants are unnecessary, and it is on track to achieve universal electrification by 2030, with the electrification rate rising from 37 percent in 2013 to 79 percent in 2023. Geothermal, hydro, wind, and solar power accounts for 90 percent of power production, with geothermal and hydro plants providing baseload capacity.⁵⁸ Kenya’s 985 MW geothermal capacity is the fifth highest in the world.⁵⁹ Plans to build coastal Kenyan gas-fired plants are intermittently proposed and shelved but such projects are optional rather than essential.

Should Africa focus on gas exports or intra-African demand?

More new gas reserves have recently been found in Africa than anywhere else in the world

Africa accounts for just 6.46 percent of global gas output, producing 265 billion cubic meters (bcm) in 2023, of which 115 bcm were exported out of the continent.⁶⁰ This compares with global production of 4,100 bcm.⁶¹ Four countries—Algeria, Egypt, Libya, and Nigeria—account for 80 percent of Africa’s output. The International Energy Agency (IEA) estimates that African demand will grow by an average of 3 percent per year, reaching 187 to 246 bcm by 2030 and up to 437 bcm by 2050.⁶²

Roughly 40 percent of natural gas discovered worldwide between 2015 and 2024 was in Africa, mainly in Mauritania, Mozambique, Namibia, Senegal, and Tanzania.⁶³ Namibia is the latest country in Africa to join the list, with Shell and TotalEnergies making big offshore oil and gas finds. Routine gas flaring is banned under Namibian law, so the gas will either have to be reinjected or commercially marketed. With 246 bcm identified to date, the government of Namibia aims to implement a common gas plan across all fields, including for local power generation and petrochemical production.⁶⁴

African gas is used on the continent for cooking and synthetic fuel production and in various industrial processes but mostly for power generation. The share of gas-fired capacity in the African generation mix has steadily increased from 20.82 percent in 2000 to 43.13 percent in 2024. In many cases, gas-fired power plants are connected to gas fields by dedicated pipelines, but Algeria, Egypt, South Africa, and Nigeria all have more comprehensive distribution networks that are capable of supplying gas to a high number of different customers, large and small. Oil and gas companies need long-term offtake supply contracts with local utilities to invest in downstream gas operations, but signing ten- or twenty-year contracts is a huge commitment for those utilities. Energy subsidies and regulated prices help reduce prices for consumers but deter investment. According to the International Gas Union, about 55 percent of Africa’s natural gas consumption is sold at prices below the cost of supply as governments try to make gas and power more affordable for consumers.

Financing for electrification is currently far from sufficient

Developing gas-to-power projects and associated gas transmission and power grid capacity is expensive. According to the IEA, Africa must double its annual power investment to $200 billion by 2030 to achieve universal electrification while meeting climate change pledges.⁶⁵

African governments and utilities have limited access to financing for new gas and power projects, while capital costs for African projects are often up to three times those in other countries,⁶⁶ so the sector urgently needs access to external sources of low-cost finance. Foreign investment is therefore key, whether from commercial investors, the multilaterals, development finance institutions (DFIs), or donors.

Gas-to-power projects in less wealthy countries may not generate enough income to justify construction. Moreover, long-term gas contracts can lock African power utilities into relatively high-cost thermal power at a time when solar energy costs are falling in the region with the best solar resources on the planet.

Environmental, social, and economic risk assessments need to be thorough because of the risk of asset stranding in what are mostly small markets. Although Mozambique and Senegal have large gas reserves to develop for exports, both countries are burdened by a high cost of capital and national debt—and low levels of experience in the sector—so they could be outcompeted by lower-cost exporters.⁶⁷

Financing from the multilaterals and international banks for African oil and gas projects has become scarcer because of climate concerns, but a new source of funding was launched in June 2025. African Export-Import Bank (Afreximbank) and the Africa Petroleum Producers’ Organization set up the African Energy Bank with initial capital of $5 billion, although it was established to support the entire hydrocarbons sector rather than specifically gas-to-power projects.

Egypt has focused on gas

International engineering companies are prepared to develop large gas-fired plants in Africa under sufficiently attractive terms of investment. In 2018, Siemens and Egyptian partners Orascom Construction and Elsewedy Electric completed the world’s three biggest combined cycle gas-fired plants: Beni Suef, Burullus, and New Capital, which provided a total of 14.4 GW out of national capacity of 59 GW in 2022.⁶⁸
Alongside a contract to build six power substations and other transmission infrastructure, they were built for the Egyptian Electricity Holding Company, which estimates that they save the country more than $1 billion a year.⁶⁹ Siemens’s involvement was crucial to financing as it was able to secure loan agreements from two export credit agencies, Germany’s Euler Hermes and Italy’s SACE, to underpin loans from more than thirty international banks.⁷⁰

African gas exporters favor LNG

The majority of Africa’s gas markets are small and fragmented and have relatively low regulated prices, so it is no surprise that exports drive most investment. Gas can be exported from Africa by pipeline or as LNG, which involves cooling gas to a concentrated, liquid state for sea transport. Such projects require the construction of expensive liquefaction plants in producing countries and regasification facilities in destination markets, but they are generally considered cheaper than piping gas over very long distances. They are also the most flexible form of export, as producers are not tied to specific export markets.

Algeria and Libya both export gas to Europe via subsea pipelines, while both—along with countries further south—also ship LNG. Nigeria, Equatorial Guinea, and Angola have traditional onshore LNG plants, but Africa has become a global center of floating LNG (FLNG) development, which entails placing LNG production vessels on offshore gas reserves.

FLNG projects are smaller than their onshore counterparts, but they avoid onshore security difficulties, can be moved to other locations if required, and enable the development of gas reserves that might be flared. Projects are already operating in Congo-Brazzaville, Mozambique, Senegal/Mauritania, and Cameroon. Eni is developing a second FLNG project offshore Congo-Brazzaville and planning a second project in Mozambique, while the UTM Offshore FLNG project is being planned for Nigeria’s deepwater Yoho field, where it would use gas that is currently flared.

A huge onshore project designed to host production for two different consortia has been partially built in northern Mozambique. Work was suspended in 2021 following militant attacks, but TotalEnergies and the other developers plan to restart work this year.⁷¹ Equinor and Shell hope to finalize arrangements on a huge project in southeastern Tanzania. Africa already contributes almost 10 percent of the global LNG supply,⁷² but if both of these projects are completed, it will make the southern Tanzania/northern Mozambique region a global engine of LNG production.⁷³

With global gas demand rising, US and Qatari LNG production is accelerating, with 350 bcm expected to be added to the world’s 2024 output of 670 bcm by 2030.⁷⁴ The scope for African LNG projects beyond those already underway, therefore, may be limited.⁷⁵ As with gas-to-power projects, export schemes—whether piped or LNG plants—could stall because of lack of market capacity.

Piping Nigerian gas to Europe could benefit most of West Africa

In addition to their cost, long-distance, cross-border pipelines are difficult to develop due to the number of stakeholders involved—from the supplying to transit and receiving countries. At present, the most high-profile proposed projects in Africa are two rival schemes to pipe gas from the Niger Delta to Algeria and Morocco for onward transportation to Europe. These projects, however, are taking very different routes.

The Trans-Saharan Gas Pipeline (TSGP), under discussion since 2022, would run 4,000 km through Niger to Algeria. Backed by two state-owned oil companies, the Nigerian National Petroleum Company and Algeria’s Sonatrach, it would have capacity of up to 30 bcm per year. Although the project would connect big reserves with huge markets, the core challenge will be security in the face of a range of armed groups operating across the Sahel. Similar security concerns have deterred construction of the proposed Turkmenistan-India pipeline through Afghanistan and Pakistan since the 1990s.⁷⁶

Nevertheless, efforts are ongoing, with Penspen energy consultants agreeing to update a feasibility study into the TSGP in 2025, nineteen years after completing its initial study.⁷⁷ The desire of European nations to end their long-term reliance on Russian gas may make development more likely this time around.

The rival Africa-Atlantic Gas Pipeline (AAGP) would run around the West African coast and enable onshore connections to eleven countries between Nigeria and Morocco: Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Senegal, Gambia, and Mauritania. Gas could be supplied to all of the transit countries as well as European customers.

The challenge with AAGP will be reaching sales and transit agreements with so many countries—not to mention security issues, including on the final stretch through contested Western Sahara. Like the TSGP, this 6,000-km project would have a 30 bcm/year capacity.⁷⁸ The governments of Morocco and Nigeria plan to form a special company to drive project development.

Abuja and the project developers must guarantee that supplies to the Nigerian market are not curtailed and ensure that gas is ring-fenced for domestic use at commercially viable prices. If the AAGP succeeds in providing gas feedstock to the eleven transit countries, this could make it the most important piece of infrastructure on the entire continent.

Gas exports can aid rather than block local consumption

Many question whether gas export projects divert production from African markets or help make domestic supply commercially viable. The answer largely comes down to the political will of host governments to demand that developers consider local as well as export needs. The oil and gas companies that develop LNG projects are attracted by export revenues and deterred from domestic markets by their often limited size and low regulated prices.

African governments, of course, are keen to see LNG projects developed. The planned Tanzanian⁷⁹ and Mozambican⁸⁰ schemes promise the biggest ever single investments into each country, delivering benefits in terms of taxes and royalties to job creation, but it is critical to ring-fence a portion of production for local distribution.

Choosing to export gas or use it for local supply is not a binary decision. The domestic requirements will be small in relation to export volumes and can help drive domestic power generation. Ensuring that gas production benefits local communities can also foster a sense of social and resource justice. For instance, developing LNG projects in northern Mozambique while leaving most locals without access to electricity would be neither just nor sensible given the region’s militant insurgency.

Several governments, including Nigeria, Tanzania, and Senegal, already require that some gas from export-focused projects be set aside for the domestic market. For instance, the Nigerian Upstream Petroleum Regulatory Commission has the ability to force upstream producers to supply the local market.”⁸¹

Occasionally, there is tension between export obligations and domestic supplies, even when the government is committed to both. Following new gas field discoveries, for example, Egypt’s government has been eager to supply the country’s LNG industry while satisfying growing domestic demand, including from the power sector. However, in response to rising domestic consumption, it has been forced to periodically block LNG production and rely on Israeli gas imports, dealing a blow to export revenues and triggering political criticism at home.⁸²

Recommendations

The drive for electrification will continue in at least some African countries with or without increased global support. The whole of North Africa has achieved close to universal electrification, while Kenya and Ghana are among the countries making significant progress toward that goal. For countries making less progress, there is much that can be done to help speed up the process, including by supporting gas sector development where needed. The following principles should guide the development of the continent’s natural gas resources to promote electrification at the lowest possible climate cost:

Climate responsibility should be based on absolute per capita emissions, not on change over time. Apart from South Africa, Africa accounts for a tiny proportion of global GHG emissions.
The goal of achieving universal electrification should be at the core of energy transition strategies. Leaving hundreds of millions of Africans without access to electricity on climate grounds—when the rest of the world’s GHG emissions are so much higher than Africa’s—should not be acceptable.
The primary focus of financing should be on renewable energy development, not least on grounds of cost per kWh. Given its relatively high life-cycle emissions, new gas-fired capacity should be avoided if universal, reliable electrification can be achieved in the medium term without it. However, countries with low electrification rates and access to gas should be backed in building gas-to-power projects—along with projects that rely heavily on gas that is currently flared.
The views of each country’s residents must be taken into account. They understand what it means to use kerosene and biomass fuel and to lack access to electricity.
In terms of electrification, renewables and gas-fired power plants should be seen as complementary rather than competing. Gas-fired capacity can provide baseload capacity to support increased renewables’ penetration, while solar microgrid and standalone residential systems can supply off-grid rural areas.
Pathways to clean energy systems should be considered on a country-by-country basis.

The governments of industrialized countries

Governments in North America, Europe, the Gulf States, and East Asia, among other areas, need to step up support for the African energy transition, mainly in renewables but also in gas-fired capacity where appropriate. This would boost living standards on the continent while minimizing emissions, create stronger African trading partners, and improve political and security stability in the wider world.

The International Partners Group formed at COP26 in 2021 was conceived as the primary mechanism for providing the necessary international financing for the energy transition in developing countries. As part of their efforts, the group would create Just Energy Transition Partnerships (JETPs) between investors and host governments, but only four JETPs have been forged to date: with Indonesia ($20 billion), Senegal ($2.6 billion), South Africa ($11.6 billion), and Vietnam ($15.5 billion). The United States pulled out of the program, and additional JETPs are now considered unlikely.⁸³

Still, the objective of coordinating development finance institutions (DFIs), the private sector, host governments, multilateral development banks, and philanthropists to work together on the issue is a sound one. New “country platforms”—where host communities have greater agency and more of the funding is provided as direct grants—are being attempted instead, but it is vital that gas remains part of the equation where conditions require it. Whatever arrangement or vehicle is used, comprehensive financing mechanisms must be put in place as soon as possible.

The United States has drastically cut its aid budget, but other countries can continue to contribute, either through their development budgets, DFIs (such as British International Investment [BII] and the German Investment Corporation), or sovereign wealth funds (SWFs). BII, for instance, is committed to improving energy access⁸⁴ in Africa, and although it curtailed almost all investment in fossil fuels in 2020, it remains open to financing gas-fired projects where they support human development needs. It should be more explicit in specifying progress toward universal electrification among these needs, and other DFIs should follow suit.⁸⁵

The European Union has various mechanisms for supporting African development, principal among them is NDICI-Global Europe, which aims to improve living conditions and political stability including through investment in the energy transition in coordination with EU member states and institutions.⁸⁶ While the organization currently does not finance gas-fired projects, it should do so where gas-fired capacity is the best route to electrification.

Sovereign wealth funds and export credit agencies

Gulf governments and their SWFs are active investors in African development, with the United Arab Emirates committed to co-financing the $25 billion Africa-Atlantic Gas Pipeline from Nigeria to Morocco⁸⁷ alongside the European Investment Bank, the Islamic Development Bank, and the OPEC Fund. The central project will export Nigerian gas to Europe, but the Gulf States and other members of the consortium could also help to finance spur pipeline connections to the West African transit states and gas-fired power plants in those countries.

Norway’s Government Pension Fund Global, one of the world’s biggest SWFs and which derives most of its income from the country’s oil and gas industry, is another potential investor. It has halted investment in coal projects but continues to invest heavily in hydrocarbons, as well as African renewable energy, and seeks to promote economic development through its investments.⁸⁸ However, it does not appear at present to invest in African gas-fired power plants. Drawing on Norway’s expertise in the gas sector, the fund could further many of its interests by supporting such projects, and its actions and strategies are often followed by other institutional investors.⁸⁹

Despite sizable cuts to the US aid budget, the world’s biggest economy can still play a major role. US Export-Import Bank (EXIM) recently approved a $4.7 billion loan for TotalEnergies’ Mozambique LNG project that will help attract pension and institutional funds “to support upstream gas development and associated infrastructure.”⁹⁰ Such investment could be combined with support for Mozambican gas-fired power projects. Because EXIM’s support for the LNG project was rooted in helping US workers and businesses involved in the scheme, it might be inclined to participate in power projects developed by US firms.

The current US government is in favor of wider oil and gas development, so African gas-to-power projects may be able to benefit from US organizations with federal connections. There could also be a pathway to develop gas-fired power plants and other gas projects in exchange for access to critical minerals in infrastructure-for-resources deals. This could be a valuable negotiating tool with mining-rich DR Congo, for instance, where Chinese companies have largely failed to develop promised infrastructural projects.⁹¹ DR Congo has neighboring states with gas reserves both to its north and south, including in Cabinda.

Apart from EXIM, other export credit agencies have played a crucial role in financing African gas-to-power projects. Euler Hermes and SACE were key to developing Siemens’ three gas-fired power plants in Egypt, and their counterparts across the world could play a similarly vital role.

African governments and regional organizations

African governments, the African Union (AU), and the continent’s regional economic communities are key players in driving electrification, including gas-fired power. The AU and regional communities have a particular role in promoting cooperation between different states. Above all, they should support cross-border power transmission integration to help neighboring countries balance out variations in power production, thereby allowing gas-fired plants to supply a larger pool of customers and support more intermittent power production.

The Southern African Power Pool has been operating since 1995, but progress has been slow in other regions, especially with respect to making the West African Power Pool (WAPP) a reality. Nigerian and Ghanaian gas could help supply energy across the region, either piped gas feedstock or electricity via cross-border power interconnectors. Political mistrust and a lack of investment have held back development of the WAPP, while the project clings to its grand vision of many cross-border, high-capacity transmission links. However, transmission integration is more likely to happen by following a step-by-step process than by imposing an overarching plan from above.

The Economic Community of West African States, which oversees the WAPP, also needs to encourage neighboring governments, power utilities, and regulators to cooperate on the technical aspects of integration, such as permitting, regulatory capacity building, and grid operation. It is difficult to trade power across borders when neighboring countries have different electricity standards that make it burdensome to secure project permit approvals.

Academic institutions, think tanks, and research organizations

At present there is very little detailed, specific research on the best energy transition strategy for individual African countries. While more than 150 research groups model the German energy system and propose long-term pathways, there are often none taking the same approach to individual African countries, even those with large gas reserves, such as Mozambique and Senegal.⁹² Much more country-specific research is needed, including to assess whether falling renewables and battery storage costs could leave gas-fired assets stranded.

Research is also needed on where gas-fired generation could support renewables and where it would block them. There is a real risk that gas investments could crowd out renewables by locking up infrastructure and capital.⁹³ Detailed research on the intersection of technology and economics, along the lines of studies conducted by National Renewable Energy Laboratory (NREL) and the Pacific Northwest National Laboratory (PNNL) in the United States, would be beneficial. These organizations focus on the US energy sector, but it would be helpful if they and their peers were to dedicate a small portion of their research efforts to energy-poor countries, not least because of the learnings they would gain for their own markets.

Conclusion

Difficult choices are called for when two worthwhile causes come into conflict with each other. With the United Nations estimating that the world is on course for an average temperature rise of 3.1C by the end of this century, it is incumbent on the international community to step up efforts to mitigate climate change.⁹⁴ These efforts must include phasing out the vast majority of coal and oil and probably even natural gas projects.

Yet, to more fairly distribute the remaining emissions, developing new gas-fired power plants in Africa should be a top priority. Requiring African countries to abstain from gas development when more prosperous countries are forging ahead could easily appear to be climate colonialism.

Implementing these recommendations to allow gas to be a minor but significant part of Africa’s electrification efforts would yield big improvements in living standards in some of the poorest countries in the world. There would be clear benefits for the people of Africa but also for the wider world through economic development and increased stability.

About the author

Neil Ford is a freelance consultant and journalist specializing in African affairs and the global energy sector. His main areas of interest include African development, regional integration, boundary disputes, the energy transition, and African logistics. He produces reports for a range of organizations, including law firms, energy consultancies, and financial platforms.

With over twenty-five years’ experience as a journalist, he has worked for dozens of outlets, including African Business, the BBC, Platts, Jane’s, and Reuters, for whom he also writes renewable energy and energy transition white papers. After earning a BA in history and geography at Sunderland University and an MSc in African history at the University of Edinburgh, he completed a PhD at Edinburgh. His dissertation on the creation of Tanzania’s international boundaries involved research in twelve countries, including much of Eastern Africa. He was previously deputy editor of Charity Finance magazine and a senior analyst at World Markets Research Centre.

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1 International Energy Agency, “SDG7 Database,” September 2023, https://www.iea.org/data-and-statistics/data-product/sdg7-database#access-to-electricity.

2 Akinwumi Adesina, keynote speech, African Development Bank Group Berlin Energy Transition Dialogue, March 28, 2023, https://www.afdb.org/en/news-and-events/multimedia/video/keynote-speech-dr-akinwumi-adesina-president-african-development-bank-group-berlin-energy-transition-dialogue-germany-tuesday-28-march-2023-60058.

3 Ember, “Africa: Electricity Access Remains an Urgent Problem Across the Continent,” last updated June 13, 2025, https://ember-energy.org/countries-and-regions/africa/.

4 Ibid.

5 African Development Bank, “Light Up and Power Africa: A New Deal on Energy for Africa,” https://www.afdb.org/en/the-high-5/light-up-and-power-africa-%E2%80%93-a-new-deal-on-energy-for-africa.

6 International Gas Union, “Gas for Africa: Assessing the Potential for Energising Africa,” 2023, https://www.igu.org/press-releases/2023-gas-for-africa-report.

7 Wood Mackenzie, email message to author, June 24, 2025.

8 Ibid.

9 United Nations, “Global Issues: Population,” last accessed July 9, 2025, https://www.un.org/en/global-issues/population.

10 Organisation for Economic Cooperation and Development, “Cuts in Official Development Assistance,” June 26, 2025, https://www.oecd.org/en/publications/cuts-in-official-development-assistance_8c530629-en/full-report.html.

11 Associated gas is natural gas found alongside crude oil that can be produced for commercial use or reinjected to aid oil production but which is sometimes (wastefully) flared or burned off.

12 International Energy Agency, “Rapid Rollout of Clean Technologies Makes Energy Cheaper, Not More Costly,” May 30, 2024, https://www.iea.org/news/rapid-rollout-of-clean-technologies-makes-energy-cheaper-not-more-costly.

13 “Africa: Electricity Access Remains an Urgent Problem.”

14 EnergyNet, “U.S. Secretary of Energy Chris Wright Outlines Trump Administration Approach to Energy Development in Africa,” March 7, 2025, https://www.poweringafrica-summit.com/industry-news/us-secretary-energy-chris-wright-outlines-trump-administration-approach-energy-development-africa.

15 NJ Ayuk, “Trump’s Second Term: A Rare Opportunity for Real African Energy Independence,” March 31, 2025, https://energychamber.org/trumps-second-term-a-rare-opportunity-for-real-african-energy-independence/.

16 This section makes use of the following article written by the author: “If the International Community Wants to Curb Fossil Fuel Emissions, It Must Make Africa a Serious Clean Energy Offer,” Africa Source, March 20, 2025, https://www.atlanticcouncil.org/blogs/africasource/if-the-international-community-wants-to-curb-fossil-fuel-emissions-it-must-make-africa-a-serious-clean-energy-offer/.

17 A just energy transition is the process of transitioning to a low-carbon economy in a way that is fair to all, including those negatively impacted by the decline of fossil fuel production.

18 International Energy Agency, “How Much CO2 Do Countries in Africa Emit?,” last accessed July 9, 2025, https://www.iea.org/regions/africa/emissions.

19 “Gas for Africa: Assessing the Potential,” 31.

20 International Energy Agency, “Global Energy Review: CO2 Emissions in 2021,” March 2022, https://www.iea.org/reports/global-energy-review-co2-emissions-in-2021-2.

21 Shariq Khan, “Oil Settles Down after Trump Repeats Pledge to Boost US Supply,” Reuters, February 6, 2025, https://www.reuters.com/markets/commodities/oil-pares-losses-after-saudi-price-increase-2025-02-06/.

22 Qi Qin and Christine Shearer, “When Coal Won’t Step Aside: The Challenge of Scaling Clean Energy in China,” February 13, 2025, https://energyandcleanair.org/publication/when-coal-wont-step-aside-the-challenge-of-scaling-clean-energy-in-china/.

23 U.S. Energy Information Administration, “Country Analysis Brief,” October 29, 2024, chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.eia.gov/international/content/analysis/countries_long/South_Africa/pdf/SAfrica_CAB_FY24_final.pdf.

24 Jared Anderson, “US Gas-Fired Turbine Wait Times as Much as Seven Years; Costs Up Sharply,” S&P Global, last accessed June 30, 2025, https://www.spglobal.com/commodity-insights/en/news-research/latest-news/electric-power/052025-us-gas-fired-turbine-wait-times-as-much-as-seven-years-costs-up-sharply.

25 Ibid.

26 Reuters, “US LNG Projects Boosted by Trump’s Export Permit Restart,” January 21, 2025, https://www.reuters.com/business/energy/us-lng-projects-boosted-by-trumps-export-permit-restart-2025-01-21/.

27 Enerdata, “Germany Plans to Develop 20 GW of Gas Power Plant Capacity by 2030,” April 11, 2025, https://www.enerdata.net/publications/daily-energy-news/germany-plans-develop-20-gw-gas-power-plant-capacity-2030.html.

28 Mark Thurber and Todd Moss, “12 Reasons Why Gas Should Be Part of Africa’s Clean Energy Future,” World Economic Forum, July 23, 2020, https://www.weforum.org/stories/2020/07/12-reasons-gas-africas-renewable-energy-future/.

29 Philipp Trotter, honorary research associate at the Smith School of Enterprise and the Environment, University of Oxford, email message to author, July 7, 2025.

30 International Energy Agency, “A New Energy Pact for Africa,” July 13, 2023, https://www.iea.org/commentaries/a-new-energy-pact-for-africa.

31 “Africa: Electricity Access Remains an Urgent Problem.”

32 “Rapid Rollout of Clean Technologies Makes Energy Cheaper.”

33 Mostefa Ouki, senior research fellow, Oxford Institute for Energy Studies, email message to author, June 30, 2025.

34 U.S. Energy Information Administration, “Carbon Dioxide Emissions Coefficients by Fuel,” September 18, 2024, https://www.eia.gov/environment/emissions/co2_vol_mass.php.

35 “Africa: Electricity Access Remains an Urgent Problem.”

36 Ibid.

37 Ibid.

38 Samuel Njoroge et al., “The Impact of the Global Fertilizer Crisis in Africa,” Growing Africa, August 8, 2023, https://growingafrica.pub/the-impact-of-the-global-fertilizer-crisis-in-africa/.

39 Enerdata, “South African Energy Information,” https://www.enerdata.net/estore/energy-market/south-africa/.

40 World Health Organization, “Household Air Pollution,” October 16, 2024, https://www.who.int/news-room/fact-sheets/detail/household-air-pollution-and-health.

41 Akinwumi Adesina, keynote speech.

42 International Energy Agency, “The Environmental Case for Natural Gas,” October 23, 2017, https://www.iea.org/commentaries/the-environmental-case-for-natural-gas.

43 Jamie Kelly et al., “Unmasking the Toll of Fine Particulate Pollution in South Africa,” June 3, 2025, Centre for Research on Energy and Clean Air, https://energyandcleanair.org/publication/unmasking-the-toll-of-fine-particle-pollution-in-south-africa/.

44 Thurber and Moss, “12 Reasons Why Gas Should Be Part of Africa’s Clean Energy Future.”

45 World Bank, “Gas Flaring Explained,” https://www.worldbank.org/en/programs/gasflaringreduction/gas-flaring-explained.

46 World Bank, “Heads of State Commit to Concrete Plans to Transform Africa’s Energy Sector, with Strong Backing from Global Partners,” press release, January 28, 2025, https://www.worldbank.org/en/news/press-release/2025/01/28/heads-of-state-commit-to-concrete-plans-to-transform-africa-s-energy-sector-with-strong-backing-from-global-partners.

47 Yacob Mulugetta et al., “Africa Needs Context-Relevant Evidence to Shape Its Clean Energy Future,” Nature Energy 7 (October 2022): 1015-22, https://www.nature.com/articles/s41560-022-01152-0.

48 Ibid.

49 Ibid.

50 International Trade Administration, “Ethiopia Energy Sector Opportunities,” July 5, 2024, https://www.trade.gov/market-intelligence/ethiopia-energy-sector-opportunities-0.

51 GET.transform, “Mozambique Country Window: Energy System Transformation Outlook,” August 14, 2025, https://www.get-transform.eu/wp-content/uploads/2024/08/GET.transfrom-Mozambique-ESTO-Aug-2024.pdf.

52 International Energy Agency, “Energy System of South Africa,” IEA, last accessed June 30, 2025, https://www.iea.org/countries/south-africa.

53 International Energy Agency, “How Much CO2 Does South Africa Emit?,” last accessed June 30, 2025, https://www.iea.org/countries/south-africa/emissions.

54 International Institute for Sustainable Development, “Investing in Gas-Fired Power Would Likely Be a ‘Costly Mistake’ for South Africa,” press release, March 31, 2021, https://www.iisd.org/articles/press-release/investing-gas-fired-power-would-likely-be-costly-mistake-south-africa.

55 Wilhelm Karanitsch, “South Africa: Enlight the Rainbow Nation,” Andritz, https://www.andritz.com/hydro-en/hydronews/hydropower-africa/southafrica.

56 “Investing in Gas-Fired Power Would Likely Be a ‘Costly Mistake’ for South Africa.”

57 Wendell Roelf, “Africa Energy Sees First Output from South Africa’s Largest Gas Field by 2033,” Reuters, June 10, 2025, https://www.reuters.com/business/energy/africa-energy-sees-first-output-south-africas-largest-gas-field-by-2033-2025-06-10/.

58 International Energy Agency, “Kenya’s Energy Sector Is Making Strides toward Universal Electricity Access, Clean Cooking Solutions and Renewable Energy Development,” April 14, 2025, https://www.iea.org/news/kenya-s-energy-sector-is-making-strides-toward-universal-electricity-access-clean-cooking-solutions-and-renewable-energy-development.

59 Carlo Cariaga, “ThinkGeoEnergy’s Top 10 Geothermal countries 2023,” ThinkGeoEnergy, January 8, 2024, https://www.thinkgeoenergy.com/thinkgeoenergys-top-10-geothermal-countries-2023-power-generation-capacity/.

60 Vincent Rouget, “Africa Risks Missing Out on the Global Scramble for Gas,” Control Risks, August 20, 2024, https://www.controlrisks.com/our-thinking/insights/africa-risks-missing-out-on-the-global-scramble-for-gas.

61 International Gas Union, “Global Gas Report 2024 Edition,” August 27, 2024, https://www.igu.org/igu-reports/global-gas-report-2024-edition.

62 Argus, “Africa Pushes Domestic Gas Role in Transition,” October 25, 2024, https://www.argusmedia.com/en/news-and-insights/latest-market-news/2622205-africa-pushes-domestic-gas-role-in-transition.

63 Ibid.

64 Ron Bousso, America Hernandez, and Wendell Roelf, “Gas May Dash Big Oil’s Namibian Dreams,” Reuters, November 7, 2024, https://www.reuters.com/business/energy/gas-may-dash-big-oils-namibian-dreams-2024-11-07/.

65 International Energy Agency, “Financing Clean Energy in Africa,” September 2023, https://www.iea.org/reports/financing-clean-energy-in-africa.

66 Wood Mackenzie, email message to author, June 24, 2025.

67 Philipp Trotter, email message to author, July 7, 2025.

68 U.S. Energy Information Administration, “Egypt,” August 13, 2024, https://www.eia.gov/international/analysis/country/egy.

69 Siemens, “Completion of World’s Largest Combined Cycle Power Plants in Record Time,” press release, July 24, 2018, https://press.siemens.com/global/en/pressrelease/completion-worlds-largest-combined-cycle-power-plants-record-time.

70 “The Egypt Megaproject.”

71 Ecofin Agency, “Total Plans to Restart Mozambique LNG Project by August 2025,” May 21, 2025, https://www.ecofinagency.com/news-industry/2105-46925-totalenergies-plans-to-restart-mozambique-lng-project-by-august-2025.

72 Wood Mackenzie, email message to author, June 24, 2025.

73 Nidhi Verma and Shariq Khan, “Tanzania Hopes to Conclude Talks for LNG Project by June,” Reuters, February 11, 2025, https://www.reuters.com/business/energy/tanzania-hopes-conclude-talks-lng-project-by-june-2025-02-11/.

74 J.P. Morgan, “What Is Liquefied Natural Gas, and Why Is It So Important?,” February 20, 2025, https://www.jpmorgan.com/insights/global-research/commodities/liquefied-natural-gas.

75 Mostefa Ouki, email message to author, June 30, 2025.

76 Syed Fazi-e-Haider, “Turkmenistan Resumes Work on TAPI Pipeline Despite Geopolitical Hurdles,” Eurasia Daily Monitor, September 19, 2025, https://jamestown.org/program/turkmenistan-resumes-work-on-tapi-pipeline-despite-geopolitical-hurdles/.

77 Penspen, “Penspen to Deliver Feasibility Study Revalidation for Trans-Saharan Gas Pipeline Project,” March 25, 2025, https://www.penspen.com/news/penspen-trans-saharan-gas-pipeline-project-feasibility/.

78 Sara Zouiten, “Nigeria-Morocco Gas Pipeline: Feasibility Study, Route Finalized,” Morocco World News, May 13, 2025, https://www.moroccoworldnews.com/2025/05/199893/nigeria-morocco-gas-pipeline-feasibility-study-route-finalized/.

79 Marc Howard, “Is a Tanzania LNG Breakthrough Near?,” African Energy, November 14, 2024, https://www.africa-energy.com/news-centre/article/tanzania-lng-breakthrough-near.

80 Simon Nicolas, “List of Reasons Not to Finance TotalEnergies’ Mozambique LNG Project Grow,” Institute for Energy Economics and Financial Analysis, February 12, 2025, https://ieefa.org/resources/list-reasons-not-finance-totalenergies-mozambique-lng-project-grows.

81 Oil & Gas Laws and Regulations Nigeria 2025,” International Comparative Legal Guides, February 21, 2025, https://iclg.com/practice-areas/oil-and-gas-laws-and-regulations/nigeria.

82 Ellen Wald, “As Middle East Tensions Simmer, the World Fixates on the Wrong Energy Market Risks,” Atlantic Council, September 17, 2024, https://www.atlanticcouncil.org/blogs/energysource/as-middle-east-tensions-simmer-the-world-fixates-on-the-wrong-energy-market-risks.

83 Vivian Chime, “Why Rich Countries Are ‘Reluctant’ on Additional JETP Coal-to-Clean Deals,” Climate Home News, December 6, 2024, https://www.climatechangenews.com/2024/12/06/why-developed-countries-are-reluctant-on-additional-jetp-coal-to-clean-deals/.

84 British International Investment, “BII Affirms Support of Mission 300 to Increase Energy Access in Africa,” January 31, 2025, https://www.bii.co.uk/en/news-insight/news/bii-reaffirms-support-of-mission-300-to-increase-energy-access-in-africa/.

85 British International Investment, “Announcing Our New Fossil Fuel Policy and Guidance on Natural Gas Power Plants,” December 12, 2020, https://www.bii.co.uk/en/news-insight/news/announcing-our-new-fossil-fuel-policy-and-guidance-on-natural-gas-power-plants/.

86 Eliza Zaleska, “EU Development Programs in Africa, Key to Reducing Irregular Migration?,” The Diplomat in Spain, March 20, 2025, https://thediplomatinspain.com/en/2025/03/20/eu-development-programs-in-africa-key-to-reducing-irregular-migration.

87 Daniel Onyango, “UAE Joins Funding for $25 Billion Nigeria-Morocco Gas Pipeline,” Pipeline Technology Journal, May 7, 2025, https://www.pipeline-journal.net/news/uae-joins-funding-25-billion-nigeria-morocco-gas-pipeline.

88 Reclaim Finance, “Breaking Bonds: The Norwegian Sovereign Wealth Fund’s Stake in Oil and Gas Debt,” February 6, 2025, https://reclaimfinance.org/site/en/2025/02/06/breaking-bonds-the-norwegian-sovereign-wealth-funds-stake-in-oil-and-gas-debt.

89 Anita Margrethe Halvorssen, “How the Norwegian SWF Balances Ethics, ESG Risks, and Returns,” Oxford Academic, May 2023, https://academic.oup.com/book/46709/chapter/410253097.

90 Export-Import Bank of the United States, “EXIM Board of Directors Votes to Proceed with $4.7 Billion LNG Equipment and Services Transaction After Four-Year Delay,” press release, March 19, 2025, https://www.exim.gov/news/exim-board-directors-votes-proceed-47-billion-lng-equipment-and-services-transaction-after.

91 Gracelin Baskaran, “Building Critical Minerals Cooperation Between the United States and Democratic Republic of the Congo,” Center for Strategic & International Studies, March 25, 2025, https://www.csis.org/analysis/building-critical-minerals-cooperation-between-united-states-and-democratic-republic-congo.

92 Philipp Trotter, email message to author, July 7, 2025.

93 Ibid.

94 UNEP Copenhagen Climate Centre, “Emissions Gap Report 2024,” https://unepccc.org/emissions-gap-reports/.

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A tale of two supply chains: Comparing Trump’s new copper tariffs and rare earth investments

Alexis Harmon, Reed Blakemore — Tue, 05 Aug 2025 22:14:09 +0000

The United States wants to secure its supply chains and revitalize domestic manufacturing, but when it comes to minerals, it’s still playing catch up—and not always with the right playbook. On August 1, the Trump administration launched sweeping new copper policies, including steep tariffs on semi-finished copper products and a domestic sales requirement. The announcement came just weeks after the US Department of Defense finalized a multibillion-dollar deal supporting the US-based rare earth company MP Materials—a targeted move to strengthen an important link in US mineral supply chains. Together, the two decisions reveal divergent approaches to mineral policy—but only one tackles the United States’ most acute supply chain vulnerabilities.

The United States remains heavily dependent on imports for both raw materials and the capacity to process them. Not all supply chains are equally vulnerable, however, and not all interventions are equally helpful. A policy that works for rare earths may be counterproductive when applied to copper, and vice versa.

The Trump administration’s two recent policy interventions highlight the importance of tailoring mineral policy on a case-by-case basis. The copper tariff, though less dramatic than feared, uses a mismatched tool to address a minor part of the problem by tariffing trade in finished goods while leaving core processing gaps unaddressed. By comparison, the administration’s public-private partnership with MP Materials strikes at the heart of midstream supply chain challenges for rare earths (though it also raises real concerns about creating new forms of market distortion given its overly generous price floor).

Together, they highlight a core truth in minerals policy: Success is dependent on correctly diagnosing the problem and picking the right tool for the right part of the supply chain. Getting that wrong doesn’t just waste public money and raise prices. It risks making US supply chains less resilient.

Different minerals, different markets, different challenges

Copper and rare earths policies need to navigate fundamentally different market challenges. Copper is a globally traded commodity with a competitive, liquid market and diverse suppliers. The US supply chain’s main vulnerability for copper lies in the poor economics of domestic smelting and refining, though stable trade with diverse partners helps bridge this gap. Rare earths, by contrast, are a niche market dominated by China at every stage. Due to the market’s immaturity, it is marked by high price volatility and opaque dynamics.

These differences mean copper policies need to focus on bolstering midstream economics and reinforcing stable trade partnerships. Rare earths policy, in contrast, should focus on de-risking private investment to help build a domestic supply chain from the ground up.

Copper: Right diagnosis, wrong medicine

The administration’s new copper policy is less sweeping than some analysts initially feared. The final rule imposes a 50 percent tariff on semi-finished and copper-intensive derivative products, while sparing imports of copper concentrates, cathodes, and other raw or intermediate inputs that US industry relies on. It also introduces a domestic sales requirement for all stages of the supply chain spared from tariffs and tightens export controls on high-quality copper scrap.

While this moderation is helpful and likely reflects industry feedback, the approach still misses the mark. The central constraint in the US copper supply chain isn’t semi-finished products; it’s the midstream. The United States produces almost as much copper ore as it consumes, but it lacks the capacity to process it. More than half of domestically mined copper is currently shipped abroad for smelting and refining. Once processed, generally by allies, it often returns as cathodes or wire rod for US manufacturers to fabricate into semi-finished products like pipes, tubes, and cables. The new 50 percent tariff targets these semi-finished copper products.

The 50 percent tariff, by contrast, targets semi-finished copper products such as pipes, tubes, and wires. These are already produced competitively in the United States, and the domestic industry is in relatively strong shape. Effectively, these new measures protect a segment of the copper supply chain that is already relatively healthy, while leaving the system’s weakest link—smelting and refining—largely untouched. To be fair, the tariffs will likely be effective in boosting some US manufacturers that make these products and in keeping more of the supply chain at home, but it is unlikely to spur new investment in smelting infrastructure to address the real strategic vulnerability. Worse, it may raise costs for downstream sectors, such as automotive manufacturing and construction.

The new domestic sales requirement for copper products (starting at 25 percent and rising to 40 percent by 2029) and export controls on copper scrap signal a worthy ambition to retain more copper for domestic use. But without addressing the economic barriers to expanding US smelting capacity, such as high operational costs and thin processing margins, these policies are likely an insufficient signal to incentivize more domestic smelting capacity. Without increased capacity, much of this feedstock has nowhere to go. The result could be a glut of unsellable material or rising costs for miners if export pathways shrink faster than new processing comes online.

In short, none of these measures tackle the real gap in the copper supply chain: midstream infrastructure. The United States has wisely realized that it can’t tariff its way out of its smelting deficit. However, it needs to widen its toolbox, focusing on financial incentives for domestic processing, permitting streamlining, and strategic partnerships with allies who help bridge midstream capacity gaps.

Rare earths: A more targeted approach—but just the beginning

In contrast, the Department of Defense’s multibillion-dollar partnership with MP Materials—a company that operates the only active US rare earths mine and is leading efforts to scale domestic magnet production—represents a more targeted attempt to shore up a deeply fragile supply chain. The United States is almost entirely dependent on China for rare earth separation and magnet production—two critical midstream stages that are vital for defense systems, automotive manufacturing, and advanced technologies.

To address this, the July 10 MP Materials deal ambitiously bundles a series of tools that go beyond traditional grants or procurement:

A ten-year offtake agreement for permanent magnet purchase from MP’s announced “10x Facility,” a second manufacturing plant that will bring MP’s total permanent magnet manufacturing capacity to an estimated ten thousand metric tons in 2028
A ten-year price floor ($110 per kilogram for neodymium-praseodymium [NdPr] oxide) to help de-risk market volatility
A $150 million loan to expand MP’s heavy rare earth separation capabilities
Acquisition of $400 million in preferred stock to boost rare earths separation and processing capabilities, as well as magnet production capacity
Enough guaranteed demand to unlock $1 billion in commercial debt and a $500 million additional agreement with Apple

This is not just subsidy for subsidy’s sake; it’s a structured market-making intervention that tackles the clear chokepoints. MP Materials’ magnet facilities are expected to exceed defense demand by the end of the decade, helping to backfill commercial markets as well.

But the design isn’t without risk. First, anchoring a rare earths strategy around an intervention this large in a single company, MP Materials, could crowd out competitors and reduce the innovation pressure that comes with competition, slowing technical progress and driving inefficiencies over time. Encouragingly, recent White House meetings with a broader group of rare earths firms signal an intent to replicate key elements of the deal with a more diverse pool of domestic players. Only time will tell if the administration can foster enough competition to maximize the value of its investment, but if additional deals quickly materialize then it’s headed in the right direction.

Second, the price floor itself is strikingly high. At $110 per kilogram for NdPr oxide, it’s well above current market levels. Price supports are critical to launch a US rare earths industry (as we’ve written about here, suggesting a price floor tariff), but overgenerous price supports can create unhealthy dependencies. The United States might end up overpaying for supply or sustaining an artificial market that fails to mature.

Still, rare earths remain an exceptional case: The industry is small enough in dollar terms to justify large-scale intervention and concentrated enough that a well-structured group of domestic players can quickly shift the market. If successful, similar niche markets could benefit from a similar approach. However, scaling similar tools across more commoditized minerals would generally be prohibitively expensive and hard to justify.

Lessons for a smarter critical minerals strategy

These two cases lead to one resounding conclusion: The United States needs a mineral-by-mineral strategy that aligns policy tools with real-world constraints.

More niche materials, such as rare earths, require substantial government intervention because of acute geopolitical exposure, few global suppliers, and an extraordinarily volatile market. Smart policy here means managing demand risk, catalyzing capital, and stabilizing prices to nurture a strategic ecosystem.

For more commoditized minerals such as copper, supply chains would benefit more from regulatory reform, targeted infrastructure support, and diversified trade partnerships with allies who have more competitive smelting capacity.

As the US government continues its Section 232 investigations into tariffing other minerals, it must embrace differentiated, bold, and measured policy design. Even well-meaning interventions can misfire if they target the wrong supply chain segment. Tariffs are often a blunt instrument, and effective industrial policy requires precision.

What’s needed is a broader, more flexible playbook that can scale what works—strategic offtakes, fast tracking priority permits, supporting innovation—without locking the United States into rigid or inefficient solutions. Above all, policymakers must tailor the tool to the mineral.

Alexis Harmon is an assistant director at the Atlantic Council’s Global Energy Center.

Reed Blakemore is the director of research and programs at the Global Energy Center.

The post A tale of two supply chains: Comparing Trump’s new copper tariffs and rare earth investments appeared first on Atlantic Council.

A US framework for assessing risk in critical mineral supply chains

Reed Blakemore, Peter Engelke — Tue, 01 Jul 2025 20:41:28 +0000

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This issue brief assesses the US national and economic security risks within critical mineral supply chains by examining challenges to resilient, secure, and well-supplied supply chains. It guides US policymakers toward an effective strategy for managing geopolitical risk amid future disruptions. Critical mineral risks to US national and economic security should be evaluated on a mineral-by-mineral basis, improving the deployment of political and financial capital. When an end-to-end domestic supply of minerals cannot be achieved, strategically designed trade policies should ensure access, security, and price stability across critical mineral supply chains. Finally, over-the-horizon risks that will disrupt future supply chains, including export restrictions, conflict, logistical chokepoints, and extreme weather events should be folded into a wider critical mineral strategy.

Introduction

Minerals and metals enable the modern economy. From cellular phones to solar photovoltaics, satellites to semiconductors, mineral-based components are irreplaceable pieces of nearly every modern-day technology. Critical minerals range from high-volume commodities such as nickel and copper to niche elements such as tungsten, indium, lithium, and cobalt to rare-earth elements necessary for permanent magnets and alloys. These minerals pass from mine to finished product through complex supply chains that transform extracted minerals into usable precursors (e.g., chemicals, alloys) for manufactured technologies. Numerous stakeholders, including private-sector companies and public-sector agencies, shape supply chains based on market demand, profit margins, and national security considerations.

The United States needs ever-more minerals, metals, and materials. Yet its inability to supply the entirety of its mineral needs domestically creates vulnerabilities. Global supply chains are often controlled by unfriendly countries. China dominates, either due to the location of most midstream processing (in China), the development of upstream mining activity through Chinese investment abroad, or via the ownership of transshipment ports by Chinese firms. As the bilateral relationship between Beijing and Washington becomes more competitive, US mineral dependency has become a key source of leverage for China.

The United States should carefully assess its most significant vulnerabilities. The margin of error is slim. The development of new mines, alternative midstream processing infrastructure, and component manufacturing all take significant time and investment to first establish and then de-risk the overall supply chain. Establishing secure supply chains across all critical minerals will require engagement with reliable partners abroad, within an increasingly fractured global trade environment that will challenge how the United States builds such “de-risked” partnerships. Increasing geopolitical risk and potential disruptions to choke points are persistent risks, as are extreme weather events (e.g., drought, flooding, extreme heat) that will test supply chain resilience.

Mineral supply chains must satisfy three criteria: They must provide sufficient supply to meet demand at competitive prices; be resilient against disruption; and have low dependence on adversaries.

Though the United States has compiled several lists of minerals designated as “critical,” each individual mineral is unique regarding supply chain characteristics, possible substitutes, and risk vulnerabilities. An appreciation of relative criticality of these minerals will be necessary to effectively craft policy, build partnerships, and drive investment. Failure to appreciate the full spectrum of factors will render the best supply chain strategy moot.

This brief explores how this full spectrum should be understood. It examines “dual use” minerals (meaning those with relevance to both economic security and national security), evaluating how risks might manifest and test supply chain resilience. The brief also outlines framing principles to guide assessments of supply chain vulnerabilities.

What “risk”? The vulnerability of US national and economic security to mineral supply chain dependency

Mineral demand in the United States continues to grow. Ongoing demand for “base” metals such as copper and nickel is projected to increase substantially (copper by 50 percent and nickel by 100 percent by 2050) for reshored domestic manufacturing and electricity transmission for artificial intelligence-driven data centers. The International Energy Agency (IEA) forecasts demand for ‘transition minerals’ such as graphite, lithium, zinc, rare earth elements (REEs) and cobalt (necessary for scaled battery storage, geothermal energy production, carbon capture and sequestration, the hydrogen economy, and solar panels, among other technologies) to grow substantially (for example, lithium by eight-fold and graphite by four-fold by 2040).

Critical minerals are also central to national security for defense systems. Radar absorbing material requires a range of minerals including barium and copper composites, for example. REEs are used in permanent magnets for precision guided munitions and radar systems. Antimony is used as a hardening agent for ammunition. Lithium is needed for durable airframes, while natural graphite is used for heat resistance in nearly every major defense asset, from aircraft to tanks to jet turbines.

Minerals must be processed and refined to become valuable as alloy precursors, sub-components, or final goods. Midstream assets therefore are as important as upstream resources. Lithium, for example, occurs naturally as both a mined ore and a brine, but must be refined into lithium compounds for use in batteries for energy storage. Usable graphite begins as a natural flake graphite before being processed and incorporated in a usable polymer or resin.

US national and economic security dependencies on raw mineral resources and processing capabilities create vulnerabilities that fall into three broad categories:

Inflation and cost-competitiveness of manufacturing: Most minerals have specific properties offering electrical conductivity, heat resistance, or chemical interactivity. Substitution is often a poor solution, with significant drops in performance or increased cost, leaving industry with scant options should supply chain disruptions occur. The resulting relative price inelasticity is itself a risk. A copper price shock of 10 percent, for example, can increase inflation by roughly 0.2 percent per annum. High prices for minerals such as aluminum, lithium, cobalt, REEs, and graphite can handicap the cost-competitiveness of domestic manufacturing relative to other nations, specifically China. Stable and smoothly functioning supply chains are critical to limiting the frequency, or severity, of these inflationary risks.

Shortages and disruption: Supply chain shortages and disruptions can undermine manufacturers’ abilities to deliver products reliably and on time. Although supply chain-driven shortages are a known phenomenon following the COVID-19 pandemic, they continue to pose persistent strategic risks to military readiness and defense planning. For example, given US munitions sales to Ukraine following Russia’s 2022 invasion, the availability of antimony, which is used in ammunition and other military applications, is a major concern.

The possibility of shortages of matériel and disruptions to defense-related supply chains poses two distinct challenges. First, aggregate supply needs to meet both expected consumer demand as well as related stockpiling (in anticipation of supply disruptions). Second, reliable options need to exist for downstream consumers, with sufficient resiliency built into supply chains to withstand foreign meddling or disruption.

Dependencies, geopolitical influence, and foreign policy: Dependence on global mineral supply chains represents a significant vulnerability for the United States, leaving it exposed to the leverage of resource-rich countries or market incumbents abroad. Rising global mineral demand and resource nationalism have complicated the United States’ efforts to seek favorable trading, investment, and national security partnerships. These dependencies can negatively impact US foreign policy decision-making, including inhibiting the United States from acting to counter hostile actions, as was seen in the delays in sanctioning Russian nickel, aluminum, and copper production for two years following Moscow’s decision to invade Ukraine in 2022.

There are numerous factors that need to be considered to understand relative criticality of individual minerals. Certain minerals, such as copper or nickel, have less complex supply chains. Others take longer to develop; some may be bolstered through non-traditional sourcing; and still others eventually could be supplanted through circularity solutions including recycling. Demand elasticity may also change. A 2023 assessment from the Department of Energy began to feature some of these factors.

Source: US Department of Energy

Mineral supply chains and core national and economic security risks

There are four core categories of risk that policymakers must take into consideration to ensure that the United States has well-supplied, secure, and resilient access to critical mineral supply chains.

China‘s dominance of critical minerals supply chains: At the heart of the risk set is China, which is dominant throughout many of the mineral and metal supply chains that the United States requires for its national and economic security.

China’s position owes in part to its domestic market share of critical minerals mining, processing, and refining. China dominates production—78 percent of natural graphite, 60 percent of rare earth elements, 60 percent of lithium processing, and 70 percent of cobalt refining—and the midstream, which is even more pronounced: China refines nearly all battery-grade graphite, over 90 percent of rare earths, and 60-70 percent of global lithium and cobalt supplies.

China’s influence extends well beyond its borders. Since the early 2000s, Beijing’s strategy of aggressive investment in international mining concessions, refining and processing assets, as well as transportation infrastructure has given it an unmatched scale of influence in global minerals supply chains. During this period, China provided nearly $57 billion in aid and subsidized credit to support transition mineral mining and refining projects focused on nineteen targeted Belt and Road Initiative countries.

This market dominance allows China to manipulate supply, undercut potential competitors, and discourage new entrants through high price volatility. It also empowers the Chinese government to promote its domestic production and processing standards globally, enhancing its competitive edge and influence over the terms of trade.

China’s dominance of the global critical minerals market combined with its rise as a near-peer geopolitical competitor to the United States makes Washington’s management of its supply chain vulnerabilities even more difficult.

This is exemplified in China’s willingness to leverage its position against the United States through export bans or other disruptions. It has already used this leverage against other countries for geopolitical advantage. A common example is its ban of REE exports to Japan in 2010 following a territorial dispute over the Diaoyu/Senkaku Islands. More recently, China has escalated export restrictions on minerals such as gallium and graphite in response to US restrictions on semiconductor exports, plus placed export controls on tungsten and indium (among several others) in response to the introduction of tariffs on Chinese goods by President Donald Trump. These measures exemplify Beijing’s willingness to use critical minerals as a tool to influence or respond to US policies.

China’s influence across the minerals supply chain has shaped how, where, and whether new, non-Chinese supply chain assets are developed. China’s ability to adeptly manage price volatility, keep critical minerals markets over-supplied, and secure offtake contracts at a lower cost offer Chinese-led projects considerable advantages compared with market participants from other countries. As a result, many new private-sector projects led by the United States and its allies struggle to compete with those led by China. Beijing also offers political support to its projects to alleviate investment uncertainty and conducts strategic diplomacy to make new mining projects successful. Non-Chinese investors often find themselves unable to compete and fail as a result.

Critically, Beijing’s dominance across mineral supply chains is bolstered by an equally robust industry of end-use manufacturing, including energy technologies, battery storage systems, and increasingly its own domestic defense manufacturing base. These publicly supported industries strengthen the linkages among nodes of the supply chain by establishing concrete demand signals from upstream actors, securing offtake and alleviating thin margins in midstream mineral processing, and enabling closed-loop supply chain management opportunities that can insulate Chinese companies from volatility elsewhere in the global market.

Fractured global trade and resource nationalism: Rising trade fragmentation makes supply chain resilience more challenging. Between 2010 and 2022, the total number of policies around the world placing restrictions on imported goods grew from approximately 250 to nearly 2,000. Global trade increasingly looks like trade within blocs (e.g., the West, BRICS).¹ Foreign direct investment (FDI) follows a similar pattern: FDI is increasing among countries that are geopolitically aligned, rather than geographically approximate. Increasing trade tensions in 2025 have made this more challenging, with even traditional trading partnerships now under stress.

For mineral supply chains, these trends are problematic. Trade fragmentation increases costs and impedes investment in critical mineral mining and processing. Lowered trust among traditional allies limits the willingness to bundle investments to tackle high upfront costs. It also deteriorates the required economies of scale, which might be unlocked through shared partnerships that are needed to displace Chinese market dominance.

Resource nationalism is both a symptom and a risk. According to Verisk Maplecroft’s Resource Nationalism Index, forty-one countries constituting 41 percent of global mineral output now fall in the two highest-risk categories, the result of increasing protectionism, rising export controls, and greater state ownership of mineral resources. Though these policies are often well intentioned and designed to minimize exploitation to ensure mineral wealth drives economic development, resource nationalism nonetheless increases uncertainty and risk premia on new projects, undermines the reliability of supply chain partnership, and increases the geopolitical leverage of mineral-rich countries.

Conflicts and chokepoints: Conflicts—such as wars, terrorism, and insurgencies—can reduce trade flowing through key logistics chokepoints, including seas and canals, ports, railways, and roads. There are numerous chokepoints globally. In the maritime domain, the list includes the Suez and Panama Canals; the Straits of Gibraltar, Hormuz, Bab el-Mandeb, Malacca, and Singapore; the Turkish and Dover Straits; and even the Black and Baltic Seas. The Bab el-Mandeb (the strait between the Red Sea and Gulf of Aden) and Black Sea offer current examples of maritime choke points impacted by conflicts: Since 2023, the Houthis have attacked ships transiting the Bab el-Mandeb, forcing rerouting, causing delays, and damaging or sinking ships; since 2022, Ukrainian grain shipments through the Black Sea have been disrupted by Russian attacks and seizures.

Conflict-driven disruptions to critical transportation infrastructure can have global trade consequences. A United Nations Trade and Development (UNCTAD) report noted that container traffic through the Suez Canal dropped by more than half in 2024, with tonnage dropping by 70 percent compared with a 2023 peak, owing to Houthi action. Such disturbances impose real costs. According to UNCTAD, the longer transit routes that shipping companies have been forced to undertake to avoid the Suez and Panama Canals (the latter has faced drought-driven low water volumes) have caused “increased port congestion, higher fuel consumption, crew wages, insurance premiums, and exposure to piracy,” in addition to longer voyages, higher shipping costs, higher carbon emissions, and an increased number of ships required.

As critical minerals are global bulk trade commodities, they are as vulnerable to chokepoint fluctuations as any other commodity that is shipped by land or water. The International Energy Agency (IEA) estimates that 165 kilotons (kt) of lithium, 93 kt of REEs, and 215 kt of cobalt were traded for energy-related purposes in 2023.

Extreme weather and natural disasters: Extreme weather events and natural disasters threaten mineral supply chains. Drought, heat, and flooding incidents are becoming more frequent and severe, owing to climate-induced alterations in the hydrological cycle. As these events increase, disruptions become multi-fold. Risks begin at the asset level. Unseasonably high temperatures impact mine productivity by limiting safe working days, increasing the energy demand of mining assets relative to cooling, and in extreme cases damaging equipment and infrastructure. Droughts can challenge asset management, given the reliance of mining and processing minerals on energy provided by rain-dependent hydroelectric dams. Drought also reduces the amount of water available for excavation and the processing of tailings. Flooding has an equally deleterious effect on asset productivity. Floods require mines to be dewatered and put tailing dams at risk for failure (this recently occurred in Zambia and caused catastrophic damage). Many of the upstream resources that have historically constituted a significant portion of global supply are increasingly exposed to these risks.

Extreme weather impacts can also be systemic. The impact of drought on the Panama Canal is one such case. There, low water levels in 2023 and 2024 cut the number of ships transiting the canal by one third, resulting in delays and higher costs. Weather events can be extreme enough to have system-level impacts across entire ecosystems, with severe supply chain consequences. River basins are important examples. In extreme drought conditions, low water levels can restrict or even eliminate barge traffic. Such conditions occurred recently in the Yangtze, Mississippi, and Rhine River basins, where sustained drought and heat combined to reduce water levels along significant stretches.

Disasters vary in frequency and severity. Earthquakes and volcanic eruptions, for example, are more common along the Pacific Rim’s Ring of Fire than elsewhere in the world. This belt of geological activity includes coastal South America, home to high concentrations of critical mineral mines and processing operations, especially in Peru and Chile. A 2019 scientific study found that three-quarters of copper mines in South America assessed by the authors were located within areas of high seismic hazard.

Such extreme weather events and natural disasters can have numerous long-term indirect impacts. In the worst cases, they can deliver widespread social, economic, and political harm.

Such phenomena are often termed “compound” shocks (when multiple risks coincide, worsening their collective impact) or “cascading” shocks (when an initial event causes subsequent shocks across interconnected systems). These shocks now occur at an alarming frequency. A 2022 study, for example, of eight severe heat-plus-drought disasters in Europe, Eurasia, Australia, and Africa between 2003 and 2019 showed that these events harmed not only public health, water quantity and quality, agriculture, and natural ecosystems, but also sectors further afield including transportation infrastructure (e.g., river navigation, rail and road systems), buildings (damage from increased wildfires), energy systems, and finance and insurance. In all cases, fiscal stress was placed on public services owing to increased firefighting, emergency response, and disaster relief payments.

National security goals rest on reliable access to critical minerals at globally competitive prices. To develop an effective strategy for managing risk, the United States government and its partners at home and abroad need to develop strategies for alleviating future supply chain disruptions.

Framing principles for reconceptualizing national and economic security risk in mineral supply chains

Strategies need to be devised that apply political and financial capital effectively. Doing so should account for the intersectionality of these risks. To think through this equation, policymakers should consider a set of framing principles, including the following:

Relative mineral criticality

Though listing critical minerals is a useful endeavor, further nuance is needed to appropriately assess risks for specific minerals and metals. This should include: evaluating which import dependencies are acceptable based on scale of dependency and foreign supplier; whether supply chain bottlenecks result from insufficient global capacity or specialized explanations; the precise sectors that are vulnerable to disruption; and the likelihood of technological substitutes emerging over time. Such assessments should be conducted regularly to ensure they capture the dynamism of a rapidly changing sector.

Domestic opportunities

The United States should leverage domestic mineral resources wherever possible, requiring investment support and addressing regulatory barriers as appropriate given other priorities. Policymakers need to ensure that domestic critical minerals are subject to rigorous and strategic opportunities assessments, which should extend beyond mineral resource and reserve assessments to include enabling factors such as a mine’s proximity to existing infrastructure and resources (roads, energy, water) as well as the social, environmental, and climate risks involved in mining and processing operations. Taking advantage of existing supply chain activity by expanding, deferring retirement, or restarting domestic mining and processing assets can provide short-term solutions for policymakers. However, numerous other opportunities exist, including recycling, which over time might provide relief to supply chain export dependencies.

Logistical vulnerabilities

Investment business cases for de-risked supply chain assets must consider associated supply chain logistics. Though upstream critical mineral resources are confined to the geographies where they are naturally found, the United States can and should assess logistical vulnerabilities, especially in cases where a mineral supply chain asset cannot be developed close to home. Assessments should include the reliability of transportation and port infrastructure. It may behoove policymakers to avoid globally extended supply chains where possible and focus their attention on supply chain building that is regional or hemispheric.

Foreign partnership and terms of trade

As there is no scenario wherein domestic production alone will enable the United States to compete on price and stability of supply across every critical mineral, the country must solidify foreign partnerships. Here, it already has a base of reliable partners, many of which are equally sensitive to the risks identified in this paper. At the same time, building partnerships is a critical step in displacing China’s role in the global supply chain, particularly in countries where China’s presence is already profound, such as Chile, Argentina, Zambia, and the Democratic Republic of Congo, to name a few. Establishing strong partnership architectures with resource-rich nations will be critical to preventing the United States from being locked out of supply chain growth as China endeavors to grow its footprint, while introducing opportunities to maximize supply chain efficiency by developing value add, supply chain logistics, and economies of scale where they can be most strategically sited. For example, upstream lithium development in Argentina, midstream processing in Mexico, and end-use finishing in the United States reflects the type of partnership where the unique comparative advantages of countries within a bespoke supply chain solution can provide shared strategic value, which both improves supply chain resilience and provides a compelling alternative to participating in Chinese supply chains.

This exercise, however, has its own risks. Just as the United States is not the only country vulnerable to supply chain risk, it cannot—and should not—expose itself by bearing the brunt of political and financial investment. The United States has tools to support de-risked supply chain activity in a more fragmented trade environment. Protectionism and resource nationalism will likely remain persistent features of critical mineral supply chains for the foreseeable future, but US market attractiveness, tariffs, and trade exemptions to bring partners into de-risked supply chain arrangements will prove powerful tools if used with precision.

Understand and address China’s market dominance

A strategy to limit vulnerabilities to China’s market dominance requires adapting two complimentary priorities. First, because other countries might feel compelled to choose between China and the United States during critical minerals negotiations, US policymakers need to leverage every tool to be competitive. Negotiators should be prepared to offer direct foreign aid, wider infrastructure and economic investment, and security arrangements when necessary. Second, policymakers must consider the extent of China’s presence throughout the supply chain and ensure that new investments do not inadvertently raise dependence on Chinese assets. Policymakers should evaluate whether new supply chain opportunities, specifically midstream refining, are not dependent on Chinese-origin material. Though the United States has already begun this process by implementing foreign entity of concern restrictions on subsidized manufacturing, complementing this approach with precise traceability programs will not only ensure that US dollars do not inadvertently entrench Chinese resources, but also give greater surety that supply chains have been de-risked.

Disaster risk and over-the-horizon asset viability

On the disaster-risk side, policymakers must factor in the increasing frequency of extreme heat, drought, and flooding and the resulting direct and indirect impacts of disasters. Disaster risk assessments should be better understood and integrated into supply chain investment decisions. The latest geospatial mapping tools should be employed to assess the full geographic extent of global supply chains. Mapping will enable policymakers and investors to better understand exposure risks over varying time horizons, and further which minerals (and when and where) may experience acute risks. Policymakers will be in an advantageous position to improve policy mechanisms, such as the use of disaster risk financing within bilateral free trade agreement qualification agreements.

Conclusion

The resources necessary to ensure the economic prosperity and national security of the United States are evolving, with increasing strategic risk not only to the United States but also to its allies and partners. This strategic challenge arises in part from the supply chain dominance of a near-peer geopolitical competitor (China), which has shown a willingness to use that leverage to pursue its own strategic interests.

Addressing this strategic challenge through the diversification of supply chains will require precision from policymakers to catalyze investment, identify trusted partnerships, and navigate an increasingly fractured trade and logistics environment. Policymakers should approach mineral supply chain risk mitigation with caution, given little room for error involved in the cross-cutting, often contradictory, and occasionally novel forms of risk identified in this paper. The nuance of relative mineral criticality, trade fragmentation, partnership development, geopolitical risk, and natural disasters means that blunt approaches might limit returns for policymakers. At worst, failure to consider this nuance will increase the dependence of the United States on geopolitical competitors.

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About the authors

Staff

Reed Blakemore

Senior Fellow, GeoStrategy Initiative

Geopolitics & Energy Security Energy Transitions

Staff

Peter Engelke

GeoStrategy Initiative Global Energy Center

Technology & Innovation

Acknowledgements

The Atlantic Council would like to thank TMP for its support of this project.

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The Scowcroft Center for Strategy and Security works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the United States and the world.

Frannie Léautier: This deal could redefine peace and power

1 The intergovernmental organization BRICS, which stands for Brazil, Russia, India, China, and South Africa, has expanded to include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.

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Experts react: The DRC and Rwanda agreed to a US-backed peace deal. Can critical minerals help end this conflict?

Atlantic Council experts — Sat, 28 Jun 2025 02:17:08 +0000

It’s “been a long time waiting,” as US President Donald Trump put it. On Friday, the foreign ministers of Rwanda and the Democratic Republic of the Congo (DRC) signed a US-brokered peace deal aimed at ending a brutal conflict that has left thousands dead and millions displaced. Under the terms of the deal, the DRC and Rwanda agreed to respect each other’s territorial integrity and cease hostilities, while paving the way for greater US investment in the DRC’s critical minerals. Trump indicated that the two countries’ presidents would soon return to the White House for a signing ceremony for the “Washington Accord.” However, significant concerns remain, as the M23 militia, the Rwanda-backed rebel group that captured the major Congolese cities of Goma and Bukavu earlier this year, did not participate in these negotiations.

Will this agreement succeed in halting the fighting? And what does this mean for the US role in the region? Below, our experts read between the lines of the peace agreement.

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Tressa Guenov: This deal could help resolve a complex conflict—and pose a challenge to China

Alexandria Maloney: A pivotal moment for Africa’s stability and the global energy transition

Will Mortenson: To ensure peace leads to prosperity, the DRC must prioritize the rule of law

This deal could redefine peace and power

This agreement, focused on responsibly sourcing and processing critical minerals, is about much more than mining. It is about recasting the narrative of Central Africa—from one of endless conflict to one of integrated opportunity. And it comes at a time when the world is racing toward a clean energy future that must be built not just with sustainable materials but with shared values.

For decades, the DRC’s substantial mineral riches have been both a blessing and a curse—fueling violence, enabling illicit trade, and entrenching poverty. This new agreement, however, links mineral access to governance, traceability, and regional cooperation. By recognizing Rwanda’s role in regional logistics and committing to a jointly managed, transparent minerals corridor, the deal offers a pathway out of zero-sum geopolitics and toward a model of mutual gain.

Like the recent US–Ukraine minerals agreement, this US–DRC deal aligns resource access with political stabilization. It signals a growing recognition in Washington that supply chain resilience is not just a commercial imperative—it’s a diplomatic and security one.

For the African continent, the most exciting prospect may be the acceleration of regional integration. This trilateral deal strengthens the case for the African Continental Free Trade Area by showing that cross-border cooperation is not only possible—it is strategic. The mineral corridor envisioned in this agreement could become a backbone for industrial zones, green energy clusters, and cross-border infrastructure linking East, Central, and Southern Africa.

It also opens the door for a new kind of diplomacy: one grounded not in competition for resources, but in shared stewardship. If successful, this model could be adapted elsewhere—from Guinea and Liberia to Mozambique and Tanzania.

This matters for several reasons:

Security: By conditioning mineral trade on peace and governance benchmarks, the agreement could change the incentive structures that have enabled armed groups to thrive. If monitored and enforced with local buy-in, it could become a precedent-setting model for responsible sourcing in fragile contexts.
The energy transition: With the West seeking alternatives in battery supply chains, Africa’s resource-rich nations are no longer peripheral—they are pivotal. A stable, ethically sourced stream of critical minerals from the DRC could anchor a new era of cleaner, more secure energy production.
Technology and trade: This deal could lay the foundation for deeper US–Africa industrial cooperation, helping African countries move up the value chain through refining, battery assembly, and tech partnerships—rather than remaining exporters of raw materials.
Peace-building. If designed for the long haul, this deal could help demonstrate that diplomacy and development are not side issues in energy policy—they are central to it.

What comes next? To turn this vision into reality, three imperatives must guide the path forward:

Sustained US engagement: Beyond the initial announcement, the United States must invest in follow-through—technical support, financing tools, and diplomatic accompaniment.
Local leadership and governance: Success hinges on the empowerment of Congolese and Rwandan actors—especially civil society and local businesses—who can ensure that mineral wealth is equitably shared and responsibly managed.
Transparent and inclusive implementation: Trust will be key. Independent monitoring, grievance redress mechanisms, and community consultation must be embedded from day one.

—Frannie Léautier is a nonresident senior fellow at the Atlantic Council’s Africa Center and chief executive officer of SouthBridge Investment. She previously served as chief of staff to the president and vice president at the World Bank Group and senior vice president at the African Development Bank.

This deal could help resolve a complex conflict—and pose a challenge to China

The US-brokered peace agreement signed today in Washington between the DRC and Rwanda is welcome news that could begin to resolve this complex and bloody conflict. Previous peace efforts over numerous US administrations have been elusive, so successful implementation will depend on all parties fully committing to the long-term work that is needed for lasting peace.

The deal hinges on what is by now a familiar theme with the Trump administration: access to critical minerals for the United States. Chances are the device you are reading this on contains rare materials such as tantalum, tungsten, or coltan mined in the DRC or Rwanda. Critical minerals from these countries also go into nearly every form of high-end defense equipment manufactured today. But technology is not without consequences. Funds from the mines that extract these valuable metals have been diverted toward fueling the conflict and associated corruption.

China, which holds a monopoly over the DRC’s vast cobalt industry, will be watching this deal closely, as it too has a rapacious demand for critical minerals for its processing industry and for commercial and defense applications. China has reportedly supplied weapons to both the DRC and Rwanda. The deal could test China’s ability to navigate the region. Russia also has a strong history with the DRC and will surely be at the ready with misinformation about US intentions with the deal.

Paradoxically, if not carefully managed, any new critical mineral extraction and access that the United States seeks from the deal could further perpetuate the factors that have enabled the conflict to endure for so long (such as child labor, corruption, devastating violence, and environmental plunder). The nature of US participation in the long-term diplomatic and economic implementation of the deal is unclear. It will be made harder by the recent cuts to the US capacity for aid and development programs, which would be a vital tool in assisting with peacebuilding. The inclusion of women, who have suffered greatly in this conflict, and other disenfranchised groups will also be crucial for securing a lasting peace. Today’s announcement is an essential step in the right direction. Now the real work begins.

—Tressa Guenov is the director for programs and operations and a senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security. Previously, she was the US principal deputy assistant secretary of defense for international security affairs in the Office of the Under Secretary of Defense for Policy at the US Department of Defense.

A pivotal moment for Africa’s stability and the global energy transition

The announcement of a peace and critical minerals deal between the United States and the DRC marks a pivotal moment—not just for bilateral relations, but for Africa’s long-term stability and the global energy transition. If successful, the deal could demonstrate how diplomacy, development, and strategic resource management can align to benefit all parties involved.

This agreement may provide a platform for stability and strategic cooperation by de-risking mineral supply chains essential for clean energy, formalizing governance in conflict-affected regions of the DRC, and empowering African stakeholders to shape global narratives around resource development. It could also bolster US commitments to mutual partnership as outlined in the US Strategy Toward Sub-Saharan Africa.

However, any optimism must be tempered with realism. The deal will be vulnerable if systemic challenges remain unaddressed. Fragile governance structures in eastern DRC, particularly weak institutional capacity and fragmented local authority, could undercut enforcement or public trust. If the agreement leans too heavily on extraction without corresponding investment in infrastructure, human capital, or environmental safeguards, it may risk deepening economic disparities rather than resolving them. Additionally, China’s entrenched footprint in the DRC’s mining sector may complicate implementation and heighten geopolitical tensions. Perhaps most critically, the exclusion of local communities or civil society organizations from negotiations could foster resentment and erode legitimacy, leading to long-term instability.

What cannot be missed is this: The opportunity here is not simply to secure minerals, but to establish a new model for engaging fragile, resource-rich states. That model must prioritize peace as the foundation, not the byproduct, of economic growth.

—Alexandria Maloney is a nonresident senior fellow with the Africa Center, president of Black Professionals in International Affairs, and a visiting lecturer at Cornell University

To ensure peace leads to prosperity, the DRC must prioritize the rule of law

The DRC-Rwanda peace deal is an incredible landmark in a long history of cross-border conflict that has prevented the DRC from truly capitalizing on its vast mineral resources. In no small part due to the persistent violence in eastern DRC, the country is one of the poorest and least prosperous countries in Sub-Saharan Africa, according to the 2025 Freedom and Prosperity Indexes.

While the foundational commitment to peace and to collaboratively stamping out militia activity in eastern DRC is undoubtedly the bulwark of this agreement, the importance of the joint commitment in enhancing trade and investment opportunities through existing regional frameworks cannot be overlooked. If peace does indeed prevail, the DRC stands to reap tremendous rewards from an enhanced ability to attract foreign investment. Multinational corporations and foreign governments (namely the United States, which helped broker the agreement) are chomping at the bit to access the country’s mineral resources, many of which are critical for emerging military and civilian technologies.

However, in order to capitalize on this opportunity to attract foreign investment and to ensure that the Congolese people benefit from it, the government of President Felix Tshisekedi must tackle corruption and establish a more robustly articulated and enforced rule of law. Establishing stability through the rule of law, low levels of corruption, and an efficient judiciary is essential for attracting outside investment. The DRC ranks among the lowest in the world in these metrics, placing 154th out of 164 countries covered in the legal subindex of the 2025 Freedom and Prosperity Indexes. Thus, only by initiating essential domestic reforms can the DRC take full advantage of the peace that this historic agreement promises to bring.

—Will Mortenson is a program assistant at the Atlantic Council’s Freedom and Prosperity Center, where he supports the center’s research, programming, and outreach.

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Power Africa can help boost American energy dominance

Molly Moran — Fri, 27 Jun 2025 13:50:59 +0000

The Trump administration recently paused funding for Power Africa, an initiative to facilitate investment to expand electricity access, to reconsider if it aligns with US interests.

At a time when the administration is focused on national security interests and economic opportunities, investing in African energy infrastructure may seem like a diversion of resources. But, on the contrary, it strengthens US supply chains, reduces Chinese market control, and opens profitable avenues for American firms. In this context, Power Africa should be repositioned not as foreign aid, but as a strategic investment in this administration’s energy dominance agenda. By reimagining key projects, prioritizing strategic energy partnerships, and enabling American business expansion, Power Africa can bolster US supply chain security and counter Chinese influence in Africa.

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Successes in US-Africa energy collaboration

Started in 2013, Power Africa aimed to double electricity access in sub-Saharan Africa by leveraging US aid dollars to de-risk private investment. In just a decade, $7 billion in US funding catalyzed more than $80 billion in commitments from African governments, the private sector, and multilateral development banks. The initiative was part of a broader strategy to increase US influence in Africa, where China’s Belt and Road Initiative has a significant presence. During its tenure, Power Africa added 14.3 gigawatts of electricity across Africa and engaged over one hundred US companies to market opportunities in Africa.

These accomplishments demonstrate how US public-private collaboration through Power Africa has opened new markets for American firms while simultaneously challenging China’s dominance in Africa’s energy development.

US Energy Secretary Chris Wright reaffirmed the US commitment to the continent at the Powering Africa Summit in Washington, DC, on March 7, despite Power Africa’s projects ceasing in late February. Wright stated that Africa needs “more energy of all kinds”—from oil and gas to renewables—and said the US government would prioritize mutually beneficial partnerships but without a “top-down grand plan” to make that happen. However, Power Africa projects currently remain frozen.

Increasing African energy access is in the US’ interest

Power Africa is not just about energy access—it promotes US business. Africa’s energy sector is among the fastest growing in the world. During Power Africa’s tenure, US firms engaged in over $26.4 billion worth of deals in generation, transmission, and off-grid systems. Through a redesigned Power Africa, American firms could provide gas turbines, microgrids, and modular energy systems to Africa. This would strengthen US energy companies, which in turn aligns with the administration’s energy dominance strategy.

If the Trump administration decides to cease all or most Power Africa projects, US businesses could face reduced access to emerging African energy markets. Ending Power Africa creates an opening for China, Russia, or even the European Union to offer financing and infrastructure support instead, strengthening their geopolitical influence and substantially limiting the opportunity for US investment in the region. In other words, Power Africa is not aid, it is a pipeline for American exports and a mechanism to strengthen US export competitiveness in global energy geopolitics.

Africa can bolster US supply chain security

Increased US-Africa collaboration has the potential to support more secure and diversified supply chains for US manufacturing. As automakers and other industries actively seek to reduce dependence on China for critical minerals, African countries are emerging as important partners in the global battery material supply chain.

Access to stable, affordable electricity is foundational for scaling mining and mineral processing operations. While increased access to power at mining and processing sites in Africa does not guarantee investment will flow, it lays the essential infrastructure that makes development possible. US support to upgrade underdeveloped grid infrastructure and invest in new power generation can help meet the energy demands of mineral production and help the United States secure a stable supply for domestic battery and electric vehicle production. Programs like Power Africa can offer miners an alternative to the Chinese financing that dominates the sector, expanding US access to ongoing operations. For example, financing solar microgrids as a cost-effective and scalable power solution for remote mining operations in the Democratic Republic of the Congo would simultaneously boost Congolese mining productivity, support US supply chain resilience, and ensure reliable access to essential battery materials outside of China’s control.

Countering China

China has a growing presence in Africa, becoming the largest investor in renewable energy on the continent. Chinese entities are also expanding their control over grid infrastructure and mineral extraction, raising concerns about Beijing’s geopolitical influence. Power Africa provides an opportunity for the United States to counter China’s power in Africa by offering alternative partnerships that promote transparency and sustainable development.

From 2000–22, China provided $52.4 billion in loans to Africa’s energy sector, with over half allocated to fossil fuel projects. This significant investment positions China as the dominant player in Africa’s energy landscape. Without continued engagement through initiatives like Power Africa, the United States risks ceding the limited foothold it had established, allowing China to further consolidate its influence through state-backed financing, large-scale infrastructure deals, and favorable trade deals. Without a credible alternative to Chinese financing like Power Africa, Chinese state-owned enterprises will continue to outmaneuver US firms and lock in resource access critical to global energy markets.

Reenvisioning Power Africa for an era of US energy dominance

Wright is justified in recommitting to Africa, as partnerships across the continent can further US interests. The National Energy Dominance Council, of which Wright serves as vice chair, aims to make the United States a global leader in energy production—that requires not just fossil fuel production, but also securing critical minerals needed for new energy technologies in an all-of-the-above energy strategy.

Critics—including those in Africa—have argued that Power Africa has been too focused on renewables. The program should indeed cast a wide net, as Wright noted. In fact, Power Africa has also invested in gas, and was “never a climate initiative,” according to its former deputy director, Katie Auth. It was “always a project backed by US firms and driven by US economic viability.”

Under a new administration focused on US energy dominance, Power Africa should be seen as an enabler of that agenda, rather than a hindrance. Power Africa doesn’t contradict the America First doctrine; it advances it. Power Africa enhances US energy security by enabling critical minerals development, expanding US firms participation and business in energy projects, supporting American jobs and technologies, and securing long-term geopolitical influence and competitiveness—all of which are core pillars of energy dominance and the administration’s goals more broadly. If the Trump administration doesn’t act, China will.

Molly Moran is a former young global professional at the Atlantic Council Global Energy Center.

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Mapping China’s strategy for rare earths dominance

Craig Hart — Fri, 13 Jun 2025 17:03:43 +0000

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China has built a commanding monopoly over rare earths, the seventeen metallic elements that are crucial for modern technologies spanning from energy to defense. Through decades of strategic state intervention, China now controls over half of global mining production and 90 percent of separation and refining capacity.

This dominance has been enabled by a comprehensive, whole-of-government approach that includes the Communist Party, the state apparatus, the military complex, industry, and research institutions. These entities work together to implement a broad range of policies that ensure global control, such as price controls, tax policy, environmental regulations, standards setting, foreign policy, defense strategy, industry planning, and research and development. These labyrinthine policy- and market-making processes add layers of complexity to the already opaque inner workings of the Chinese state.

This report by Craig Hart demystifies these interconnected systems by:

outlining China’s strategic objectives
identifying the key rare earths stakeholders in government and industry
unraveling the complex web of policies that enable its global market dominance
exploring potential opportunities for the West to develop a counterstrategy to develop its own rare earths supply chains

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Explore interactive graphics mapping China’s key rare earths stakeholders, system of direct and indirect subsidies, and the role of Belt and Road investments.

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About the author

Craig A. Hart was a nonresident senior fellow with the Atlantic Council’s Global Energy Center. He is a lecturer at Johns Hopkins University.

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Empower women miners now for a just future in Africa

Neeraja Kulkarni — Thu, 12 Jun 2025 19:44:57 +0000

Women are an integral part of the mining economy in Sub-Saharan Africa.

In the informal or artisanal and small-scale mining (ASM) sector, women’s participation is estimated at up to 50 percent. But despite their contributions, women across the region are subjected to discrimination—which results in fewer socioeconomic and professional opportunities—in addition to sexual and gender-based violence.

Today, the increasing demand for critical minerals has led global powers, including the United States, to consider critical-mineral deals globally in order to create stronger and more sustainable supply chains. African countries thus have a newfound opportunity to prioritize their development goals—but they first must address the discrimination and violence against women taking place across the industry.

For African countries to empower their women miners, they must tailor formalization pathways of women ASM miners and support grassroots organizations as operational partners, while deploying policies aimed at addressing gender biases in the industry and on a macro scale.

The reality for women miners

In the ASM sector, where working conditions are unsafe, women face gender-based discrimination and physical harm. Women miners are ninety times more at risk of death than their male counterparts, according to the World Bank. Women miners also face sexual violence, which is especially prevalent in conflict areas: For example, amid the ongoing conflict between Congolese armed forces and Rwanda-backed M23 rebels, women (both miners and not) reported 895 rapes in the last two weeks of February 2025, averaging sixty reports per day.

In the ASM sector and in large-scale mining (LSM), women have also been allocated fewer technical jobs in addition to unequal access to mining rights, tools, and financial resources, all diminishing their ability to achieve financial growth. Their restricted economic mobility often confines them to ancillary services such as preparing food and cleaning mineral ore. But regardless of the roles they take, women miners often receive lower wages than men for the same labor. Discrimination also results in women miners taking on a disproportionate burden of labor overall, as many are responsible for housework in addition to mining activities.

Legal infrastructures also reinforce discrimination against women miners: For example, the DRC’s Mining Code stipulates that pregnant women are not allowed to work in mining. Similarly, sections 55 and 56 of Nigeria’s 2004 Labor Act prohibit women from working in industrial undertakings, including mining, during nighttime hours and from doing any manual labor underground. These unequal legal measures can push more women to informal mining practices, making them more vulnerable to physical and gender-based harm.

Tapping the opportunity

African countries, for their development and economic growth, must address the challenges women in both ASM and LSM face, with policies that are tailored to the needs of local mining communities.

African countries must offer easily navigable pathways for ASM miners to formalize—and such pathways must be customized for local contexts. Formalization is particularly complex in regions with conflict and legal pluralism. There are frameworks available to guide African governments in this endeavor. For example, a nongovernmental organization called Pact has publicly put forth the model it uses to engage communities in formalization, tailoring the approach to the needs of local artisanal miners. Such a model includes stakeholder engagement and educational training for miners, in addition to support with securing licenses and land access and with addressing human rights and safety concerns.

African governments should also support local grassroots organizations in operationalizing these efforts to improve the well-being of women miners and their economic prospects. In the ASM sector in particular, these organizations are integral to reaching women miners, especially in spaces where governments lack reach. For example, Tanzania’s Women Miners Association economically empowers women miners through initiatives that organize savings and credit cooperative societies and support women as they work to acquire mining licenses and market access. An organization called IMPACT leads initiatives for women-led mining businesses to improve women miners’ safety and foster inclusion in global supply chains. IMPACT supported the building of at least fifty village savings and loans associations in the DRC and Burkina Faso, involving nearly three thousand women and men who saved more than $176,000.

In addressing women’s challenges in the mining sector—both ASM and LSM—more broadly, African governments must also deploy policies that are gender inclusive and women-centric in order to alleviate the gendered struggles of women in the mining sector. There are already positive examples of such policies on the African continent, some being South Africa’s programs to improve women’s participation in the LSM sector. In addition, the Rwanda Mines, Petroleum, and Gas Board implemented a gender strategy to improve awareness about the role of women in mining and to boost capacity building. Governments should also encourage women’s participation in mining governance.

Leveraging partnerships

Safeguarding and empowering women is essential for upholding human rights and fostering inclusive sustainable growth. While ensuring peace and stability, African countries need to leverage partnerships to advance their development goals.

As countries move forward on critical-minerals deals, they must do so ensuring that there will be mutual economic gains from such agreements. For example, the DRC must leverage its potential mineral deal—in which the United States would provide security against the Rwanda-backed M23 rebel attacks in exchange for access to DRC’s critical minerals—for community development. While signing any deal, governments should foster multistakeholder partnerships with grassroots organizations that can help reach women miners and advance development goals in Africa’s booming mining sector, for an inclusive and equitable future for all.

Neeraja Kulkarni is a researcher, writer, and development practitioner with experience in decarbonization, community resilience, and international development. The views expressed in this article are her own.

The post Empower women miners now for a just future in Africa appeared first on Atlantic Council.

Marine energy: Harnessing the power of the Atlantic

William Yancey Brown — Tue, 10 Jun 2025 13:02:39 +0000

Following a decade-long partnership, the Policy Center for the New South and the Atlantic Council have joined forces around a new program focused on the power of the Atlantic. This series of publications and webinars will focus both on opportunities and challenges around the basin.

This brief, the inaugural of the series, by William Yancey Brown highlights the vast energy and mineral potential of the Atlantic Ocean and how African nations bordering the basin can manage resources responsibly and fairly. It launches against a backdrop that includes World Ocean Day, the 2025 UN Ocean Conference, and the continuing work of the Group of Twenty (under South Africa’s presidency) within the Oceans 20 engagement group.

The Atlantic Ocean is of paramount importance to Africa. The African nations on the ocean’s shore represent 46 percent of the continent’s population, 55 percent of its gross domestic product, and 57 percent its trade. The blue economy is crucial for Africa as the continent’s economies see new changes brought upon by issues related to the maritime energy transition, the port revolution, maritime transport, fishing, and control over exclusive economic zones. African countries have accordingly developed frameworks, through the African Union, for action in the region and declared 2015-2025 the “Decade of Africa’s Seas and Oceans.”

Introduction

The world’s second-largest ocean—the Atlantic, bordering more than thirty nations—is rich with energy and minerals, as well as the marine life and human livelihoods that development impacts. The Atlantic has a well-established oil and gas industry and a rapidly growing offshore wind sector. In addition, nascent sources of energy and minerals exist at the water’s surface (tides, currents, and waves), just below in the temperature differences between ocean layers, and on the seafloor. There are windfarms and oil and gas infrastructure off the coasts of Europe and North America—but the challenge now is how to tap the African Atlantic’s energy potential responsibly and fairly.

Though renewables are the clear best route to reducing greenhouse gases, it can be expected that African nations will continue to develop their offshore oil and gas resources. At the same time, however, wind farming could usefully be tried in some areas along Africa’s Atlantic coast—and to expand the range of renewables available, venture capitalists should also look closely at the potential projects in the works to harness the energy of waves, currents, and the ocean’s thermal energy. Funders, international organizations, and African nations along the Atlantic have several policy options to explore the ocean’s resources in a sustainable way. On the question of mining critical minerals from the deep sea, however, much more research on the seabed environment—and availability of alternative terrestrial sources—is needed.

Nascent ocean energy and mineral resources

The Atlantic Ocean provides a place for energy production facilities that could be located on land or sea, in addition to energy sources derived from the ocean itself. These placements include the world’s first floating nuclear facility and solar power plants offshore of the Netherlands.¹ So far, mainland Africa has neither of these, although a floating solar power plant is planned for the Seychelles.² Ocean locations present a harsh environment for devices and accessibility, and environmental restoration is difficult if accidents occur. On the other hand, ocean placement offers space and distance from human settlements.

Tides and currents. Moving river water made up about 15 percent of global electricity generation in 2023.³Hydropower makes up more than half of electricity generated in the Democratic Republic of Congo, Brazil, and Norway.⁴ The Atlantic Ocean has its own standing currents and tidal flows, such as the Gulf Stream and the Atlantic Meridional Overturning Circulation, and powerful tides in locations on both coasts of the basin.

Small-scale generating facilities powered by non-tidal, standing ocean currents have been tested in locations including the Gulf Stream offshore of the United States and the Kuroshio Current offshore of Japan, but no commercial-scale facility is operating anywhere yet.⁵ The greatest potential for non-tidal current power in the African Atlantic is reportedly offshore of South Africa, or perhaps of Guinea-Bissau and Morocco.⁶

A 240-megawatt (MW) tidal power plant has operated on the Atlantic coast of France since 1966.⁷ Africa has some much smaller Atlantic tidal plants, but no commercial-scale tidal power generating facilities are operating there and prospects for tidal facilities offshore of Africa’s Atlantic coast are weak.⁸ Cost is a principal impediment. Environmental impacts are also a concern, but the same is true for well-developed hydropower on land. Despite tepid progress to date for tidal power, new projects are on the books in Europe.⁹

Waves. Waves offer great potential power for electricity on Atlantic coasts. Wave action on the US Atlantic coast could reportedly provide average power generation of about 18 gigawatts (GW).¹⁰ Wave and tidal current energy could potentially meet up to 20 percent of the United Kingdom’s current electricity demand.¹¹ Atlantic Africa has energetic waves in the south offshore of South Africa and, to a lesser extent, Namibia. Senegal, Cabo Verde, and Morocco in the north also have high wave potential.¹²

Many wave energy test projects have been completed or proposed for the Atlantic in the United States, United Kingdom, and Europe.¹³ However, only one small wave energy facility offshore of northern Portugal currently provides electricity to the grid.¹⁴ Another small grid-linked project off a pier is set to begin operations in 2025 in Los Angeles.¹⁵ As for tides and currents, the challenge and cost of maintaining wave energy facilities remains an impediment to significant deployment.

Ocean thermal energy conversion. Tropical seas, including in the Atlantic, have surface waters much warmer than the deep sea. This difference allows devices to circulate water and power turbines through ocean thermal energy conversion (OTEC).¹⁶ “Open” versions of the technology can also desalinate seawater. OTEC could theoretically provide about 8 terawatts (TW) of power globally, more than the current global electricity demand.¹⁷ However, OTEC has a long history of experimentation without yet providing a commercial operating source of power to the grid.¹⁸ This might change with a small 1.5-MW project scheduled to be installed in 2025 offshore of São Tomé and Príncipe.¹⁹ There is also potential for floating OTEC along the west coast of continental Africa, with the highest potential reportedly from Guinea to Gabon.²⁰

Methane hydrates. Methane hydrates are ice-like solids in which water traps methane. They occur on ocean continental margins, including offshore of the Americas and Africa, and hold vast amounts of carbon and energy.²¹ Combined with this promise is the peril of releasing methane from any mining, including through submarine landslides. Japan has taken a special interest in methane hydrates and has conducted experimental projects successfully extracting methane gas.²² No such projects have yet been undertaken in the Atlantic Ocean.

Developed ocean energy and mineral resources

Oil and gas. Under its Stated Policies Scenario (STEPS), the International Energy Agency (IEA) estimates that global oil supply will decrease about 7 percent by 2050 and natural gas production will increase by about 4 percent.²³ Offshore production currently comprises roughly 30 percent of global oil supply and 28 percent of global natural gas production.²⁴ Large historical Atlantic-linked sources include the Gulf of Mexico and the North Sea.

Rystad Energy estimates that, in Africa, about 3.5 million barrels of oil equivalent per day (boepd) of new deepwater oil and gas supply will be near final decision or under construction by 2035. Nigeria is the historic hub of West African offshore oil production and expects to raise production from 2 million barrels per day (bpd) to 3 million bpd with an anti-theft initiative.²⁵ The Baleine Field offshore of Cote d’Ivoire and Namibia’s offshore Orange Basin recently began production, and exploration is under way or planned offshore of São Tomé & Principe, Liberia, and Sierra Leone, among other countries.²⁶ Natural gas production began in January 2025 offshore of Senegal and Mauritania and is expected to produce around 2.3 million tons of liquified natural gas (LNG) annually for more than twenty years.²⁷ Brazil’s state-owned oil company Petrobras predicts a ramping up of current offshore production to 3.2 million barrels per day (equivalent; including natural gas) in the next five years, with oil production centered on its “pre-salt” basins.²⁸ Guyana’s Stabroek Block expects to produce 1.3 million bpd of oil by 2027 and holds an estimated 11.6 billion barrels of recoverable oil and significant natural gas.²⁹

Wind energy. Offshore wind energy farms globally provided an estimated 75 GW installed operating capacity as of 2023, about 7.5 percent of the roughly 1,000 GW total installed global wind energy that year.³⁰ Europe and the United Kingdom have historically led offshore wind development, but China is now leading deployment.³¹

Atlantic Ocean wind farms are currently operating offshore of the United Kingdom, Europe, and the northeastern and mid-Atlantic coast of the United States, with additional farms planned.³² Three commercial offshore wind farms are now operating in the United States, with other US Atlantic projects under construction.³³ The US Atlantic projects are driven by coastal state governments that have established targets for renewable energy. However, supply chain issues and costs have led to the cancellation of some proposed projects. Development is also weighed down by the shift from the strong support of the Biden administration to adversity from the Trump administration.³⁴

No wind farms are currently operating offshore of South America or Africa. Planning is under way but in early stages for Brazil, Morocco, and South Africa. Africa has good winds for turbines on the Atlantic coast in the south and northwest.³⁵ Locations on either side of the Cape of Good Hope are being considered in South Africa, with a specific project proposed to the east in Richards Bay.³⁶

Critical minerals in the Atlantic

Critical minerals are generally defined by national laws as minerals that are essential for important industries and vulnerable to supply chain disruption.³⁷

Most critical minerals, including rare earths, are more scarce than rare in terms of the amounts present in geologic features found at many locations around the globe. However, their actual mining and production are constrained, with China producing most critical minerals and Africa a key place for mining. For example, 74 percent of the world’s cobalt is mined in the Democratic Republic of Congo (DRC), under conditions that are both unsafe and undependable.³⁸ Dependable access to critical minerals without overreliance on China is a priority for many Western industries. The United States was a leader in the past but, despite such high interest in critical minerals, global prices for key metals and material fell by about 26 percent in 2023, including a 47-percent decline in cobalt and a 32-percent decline in lithium carbonate.³⁹

Whether these minerals should be mined from the deep seabed beyond national jurisdiction, in addition to land mining, is hotly debated under international law (see below). Polymetallic nodules (PMNs) in the Clarion-Clipperton Zone in the Pacific Ocean, where these nodules are abundant, receive the most attention from industry, governments, and nongovernmental organizations. The International Seabed Authority (ISA) has designated Atlantic Ocean exploration areas for polymetallic sulfides (PMSs) along the mid-Atlantic Ridge and for cobalt-rich ferromanganese crusts (FMCs) in the South Atlantic.⁴⁰ Little information is publicly available about potentially recoverable amounts and no exploitation has been authorized, but research on the biological communities that could be impacted raises great concerns for environmental impacts.⁴¹ The Trump administration stepped outside of the ISA in April 2025 with an executive order promoting seabed mining both on the high seas and the US continental shelf.⁴² Encouraged by the order, Canada’s The Metals Company has announced that it will apply for permission to mine high-seas PMNs under a US statute,⁴³ despite protests from the ISA,⁴⁴ and another company, California-based Impossible Metals, has applied to mine PMNs in the US territory of American Samoa.⁴⁵ The Department of Interior announced on May 20 that it was launching the process for a lease sale there based on that application.⁴⁶

The environmental framework

The ocean energy sources described above are primarily regulated by the nations to which they are adjacent, either because the resources are located in sedimentary geologic formations of the continental shelf (as in the case of oil) or because proximity to onshore populations facilitates construction and operations and lessens the cost of transmitting electricity (as in the case of wind). Critical mineral exploration and mining are primarily regulated on the continental shelves of nations under national laws and on the high seas by the ISA, which was established under the United Nations Convention on Law of the Sea (UNCLOS).⁴⁷The United States also has a dated statute for high seas mining, applicable to anyone under US jurisdiction.⁴⁸

National laws for ocean energy and mineral development vary, and this short paper cannot document their details. But consider US laws for reference. The facilities involved require authorization from the Bureau of Ocean Energy Management (BOEM) under the Outer Continental Shelf Lands Act (OCSLA).⁴⁹ Authorization begins with leasing, followed by approval of development plans, with environmental review under the National Environmental Policy Act (NEPA).⁵⁰ NEPA is a procedural statute without ultimate environmental standards. The approvals include conditions, most designed to mitigate environmental impacts, whose authorities come from other US environmental laws. A large offshore wind farm might have one hundred conditions. OCSLA includes standards to minimize environmental harm, but environmental review is given sharper teeth through the Endangered Species Act (ESA) and the Marine Mammal Protection Act (MMPA), which have firm impact tests.⁵¹ Noise is a significant concern, and is regulated as “harassment” under the ESA and MMPA. OCSLA also requires lessees to decommission facilities at their expense once a lease ends. All of these regulatory actions are subject to judicial review and many rulings have affected requirements. That said, oil, gas, and wind energy projects have gotten through the approval process and are operating in the United States.

European nations with Atlantic coasts (and the EU itself), South American nations, and some African nations have legal frameworks for environmental review with environmental assessment procedures akin to those of NEPA in the United States. Most lack hard stops such as the ESA and MMPA. Article 6(4) of the EU Habitat Directive approaches these stops, requiring that certain actions with negative environmental impacts can proceed only if carried out for “imperative reasons of overriding public interest” and with compensatory measures.⁵² The International Offshore Petroleum Environmental Regulators (IOPER) provides a venue for cooperation on oil and gas environmental regulation in the Atlantic and elsewhere but does not currently include any African nation agency.⁵³

The ISA has issued final rules for deep seabed prospecting and exploration in the area beyond national jurisdiction and draft rules for exploitation.⁵⁴ Both rules prohibit activities in the international area that would cause “serious harm” and define this to be any effect from activities on the marine environment that represents a “significant adverse change in the marine environment.” Both final and draft regulations also require a “precautionary approach.”⁵⁵

Marine protected areas (MPAs) are another key environmental safeguard. Some have already been designated in the Atlantic in the exclusive economic zones (EEZs) of coastal nations.⁵⁶ MPAs provide environmental protection that complements mitigation measures for activities in areas that are being developed.⁵⁷

All of these environmental policies rest on the foundational need to address climate change. The Atlantic Ocean is an important sink for carbon dioxide through direct absorption and sequestration by sea life. It is also the object of impacts such as sea level rise, higher temperatures, acidification, and potential disruption of the major currents.

Policy recommendations

Each ocean energy and mineral resource described above sits within a framework of cost competitiveness, scale, required environmental protection, and governance stability.

Recommendation: Waves, currents, and OETC

Waves, currents, and OETC have potentially great scale. In theory, each could meet large shares of Atlantic Ocean coastal electricity demand. However, none of the three has gone viral, constrained by the costs and challenges of operations and maintenance. All three nevertheless warrant continued investment in projects and research.

Venture capital firms concerned with energy and relevant government agencies should consider funding new projects for wave, current, and OETC technologies, with a particular view for projects supplying power to island populations of Atlantic southern African nations.

Recommendation: Methane hydrates

Methane hydrates also have potentially great scale but are challenged by the risk of accidental releases in development, production of greenhouse gases, local environmental impacts, and the abundance of natural gas from alternative current sources.

Japan has led work investigating methane hydrates on its continental shelf. It should continue these efforts and seek collaborative research partnerships with other nations.

Recommendations: Oil and gas

Oil and gas production sits in a maelstrom of analysis and often angry commentary. Science allows no sound doubt that Earth’s surface is warming because of anthropogenic fossil fuel emissions. Furthermore, it is apparent that governmental policies to date have not solved the problem. Performance has taken a back seat to aspiration. Post-combustion technologies such as engineered or natural sequestration by biota, direct removal from the air, and atmospheric additives such as aerosols are only partial solutions.

Fair play is another consideration for oil and gas offshore of West Africa and Guyana. The economies of wealthier nations historically benefited from fossil fuels. Many less wealthy nations, including those in Africa, missed out and are seeking funding to address climate impacts. They do not want to be told not to develop their own offshore oil and gas resources—particularly as production continues in wealthy countries such as the United States, United Kingdom, and Norway—and wealthy nations are unlikely to provide funding anywhere near the levels developing nations request. African nations can be expected to move forward with developing their major Atlantic offshore reserves, as they are now doing in conjunction with major companies. Better use of fossil fuels, such as prevention of methane leakage and priority for natural gas over coal or oil for electricity will help address climate impacts. However, the single best available avenue for reducing greenhouse gas emissions appears to be replacing fossil fuels with renewable energy, including solar, wind, and nuclear facilities on land in addition to renewable ocean energy.

Potential conflict and corruption are also obvious challenges hitchhiking on the road to wealth from offshore oil and gas resources for West Africa and Guyana. Unless both can be dealt with effectively, fair play in wealth allocation will be a mirage. Where US companies are involved, it does not help that the current administration has said it would not enforce the US Foreign Corrupt Practices Act or consider the social cost of carbon in decision-making as previous administrations did.

Atlantic African nations should:

In cooperation with other agencies and institutions, prioritize renewable and nuclear energy development to mitigate climate change by replacing fossil fuels.
Include a quantified measure of the social cost of carbon in regulatory decision-making.
Maintain transparent and independently audited programs for government revenue collection and expenditure, including sovereign wealth funds, and explicitly require multinational firms subject to US jurisdiction to comply with the Foreign Corrupt Practices Act.
Work with other Atlantic nations to establish and maintain what could be known as a “Pan-Atlantic Blue Ring” of coastal, island, and marine conservation areas, building on existing conservation areas, with a dual purpose of climate reliance and biodiversity conservation for its own sake.

Recommendation: Offshore wind

Offshore wind is not a pipeline for sovereign wealth, but it can mitigate greenhouse gas emissions by replacing fossil fuels. It can be cost competitive with other energy sources in some locations and has scale—in the neighborhood of 1–2 GW capacity for larger projects in the United States. Its status going forward in the United States is uncertain given the critical stance of the current administration, preexisting complications in regulatory approvals, supply chain problems, and possible overenthusiasm on finances. Some US Atlantic projects are operating or close to that and are likely to provide planned electricity over the twenty-five- to thirty-year terms of their leases. Some other leases without approved project plans might ultimately culminate in operating projects. In the long term, offshore wind is an experiment with a reasonable probability of a good result. Nations other than the United States are more supportive, such as the EU nations and China. Atlantic coastal Africa has the wind needed in the south and northwest and could usefully try it out. Whether leases will be renewed at the end of their first life is a question. Investors have generally presumed they will be, but the answer will be informed by the costs of competing energy sources, including solar and nuclear facilities on land.

Atlantic African nations in the south and northwest with good winds should establish potential lease areas for wind farms through a public review process that examines needs for economic viability, full-scale review of environmental impacts, and deconflicting of impediments generally. Public auctions for leases should be held once potential lease areas are established, to confirm whether companies have an appetite for projects. If they do, projects should be advanced.

Recommendations: Critical minerals

Critical minerals are a proper priority for nations whose industries and national securities depend on them. The United States and others are concerned that China dominates production. However, addressing this calls for a scalpel, not a hammer. Each mineral has its own value, sources, potential replacements, recyclability, and location in the marketplace. The price for some, such as cobalt, has fallen in the past two years.⁵⁸ Furthermore, the economics and environmental impact of deep seabed mining should be compared with mining on land. Terrestrial mining can decimate mining sites and areas along the roads to them. But the ecology of terrestrial areas can be reasonably well described and impacts from mining mitigated. Also, restoration after project completion is much easier where people can walk and breathe and vehicles can drive. Recent research indicates that even larger species in the deep sea are mostly not yet described.⁵⁹ Furthermore, restoration is either conceptually impossible (if the material removed is habitat) or technically infeasible. Fundamentally, the environmental standard for mining under the high seas is to prevent serious harm. No experienced and objective environmental regulator could conclude that the standard is met by the technologies currently available.⁶⁰

Before supporting approval of any deep sea critical mineral mining on the high seas or in their offshore national jurisdictions, Atlantic nations should advance research on the deep seabed environment, including species and ecology, and on the availability of terrestrial sources.

Additional recommendations: Artificial intelligence

Finally, many companies and researchers working on generative artificial intelligence (AI) believe that artificial general intelligence (AGI) that matches highly skilled human intelligence will be available in the next several years. Generative AI agents already exist that perform tasks as though they were humans, and they get better every day. Robots are also in the works. These advances in generative AI will touch everything in human society, including sustainable energy and mineral production in the Atlantic Ocean basin.⁶¹ AGI will likely be able to perform much analysis and procedure, improving the speed, and possibly the accuracy, of reviews. Despite model biases, generative AGI might offer the potential for less biased or corrupt decisions when it comes to selecting operators or siting energy projects.

Just as important, however, the people who now earn a living doing things related to sustainable energy and minerals will need help if AGI agents do the work in the future. The sooner these efforts start, the better.

The larger companies with leading generative AI models should continue to provide or initiate support for institutions in Atlantic Africa for training and access to the best models they are making available.⁶²
Community leaders in African towns and villages likely to be affected by Atlantic energy and mineral development should form stakeholder teams to engage with developers. The teams should include at least one individual with access to a leading AI large language model (LLM) and experience in prompting it so that the model itself can participate in discussions about community benefit from development and potential harm to employment from AI.

In partnership with

Explore the program

1 The Akademik Lomonosov 70-MW nuclear facility provides electricity and heat to the town of Pevek in the Chukotka region of Russia. “Akademik Lomonosov Floating Nuclear Co-generation Plant,” Power Technology, May 24, 2021, https://www.power-technology.com/projects/akademik-lomonosov-nuclear-co-generation-russia. Oceans of Energy, a Dutch company, has established solar power plants in the North Sea offshore of the Netherlands beginning in 2019 in areas with high waves, and has big plans for expansion. “Home,” Oceans of Energy, last visited April 21, 2025, https://oceansofenergy.blue/.

2 The French energy company Qair announced in 2023 that it would build and operate a 5.8-MW floating solar plant in the Seychelles. “Qair Signs 5.8-MWp Floating Solar PPA in Seychelles,” Renewable Now, April 4, 2023, https://renewablesnow.com/news/qair-signs-5-8-mwp-floating-solar-ppa-in-seychelles-819459/.

3 “International: Electricity,” US Energy Information Administration, last visited April 21, 2025, https://www.eia.gov/international/data/world/electricity/electricity-generation.

4 “Congo-Kinshasa: Electricity,” US Energy Information Administration, last visited April 21, 2025, https://www.eia.gov/international/data/country/COD/electricity/electricity-generation; “Brazil: Electricity,” US Energy Information Administration, last visited April 21, 2025, https://www.eia.gov/international/analysis/country/BRA; “Norway: Electricity,” US Energy Information Administration, last visited April 21, 2025, https://www.eia.gov/international/data/country/NOR/electricity/electricity-generation.

5 “Hydrokinetic Clean Energy Harnessed from Florida’s Gulf Stream in Historic OceanBased Perpetual Energy Demo,” Business Wire, press release, May 28, 2020, https://www.businesswire.com/news/home/20200528005381/en/Hydrokinetic-Clean-Energy-Harnessed-From-Floridas-Gulf-Stream-In-Historic-OceanBased-Perpetual-Energy-Demo; Dodo Yasushi and Ochi Fumitoshi, “Demonstration Test of Ocean Current Turbine System for Reliability and Economic Performance Evaluation,” IHI, October 2023, https://www.ihi.co.jp/en/technology/techinfo/contents_no/__icsFiles/afieldfile/2023/10/31/Vol56No2_09.pdf.

6 “Assessing the Potential of Offshore Renewable Energy in Africa,” 36–40.

7 The Rance tidal power station was the world’s first large-scale tidal power plant. “La Rance Tidal Barrage,” Tethys, last visited April 21, 2025, https://tethys.pnnl.gov/project-sites/la-rance-tidal-barrage. The world’s largest tidal power station, with 254 MW installed capacity, is in South Korea. Eun Soo Park and Tai Sik Lee, “The Rebirth and Eco-Friendly Energy Production of an Artificial Lake: A Case Study on the Tidal Power in South Korea, Energy Reports 7 (2021), https://www.sciencedirect.com/science/article/pii/S2352484721004698#b19.

8 “Assessing the Potential of Offshore Renewable Energy in Africa,” 36–40.

9 For example, the European Union decided to invest 31.3 million euros in a new 5-MW installed capacity tidal power facility on the French Atlantic coast, which is expected to deliver 34 megawatt hours (MWh) of electricity to the French grid by 2028. Jijo Malayil, “World’s Most Powerful Underwater Tide-Riding Turbines to Power 15,000 Homes Annually,” Interesting Engineering, March 2025, https://interestingengineering.com/energy/underwater-tide-riding-turbines-project-funding-boost.

10 The Electric Power Research Institute (EPRI) estimates “total recoverable wave energy” of 160 terawatt hours per year (TWh/yr), which equates to average power generation of just above 18 gigawatts (GWs). “Mapping and Assessment of the United States Ocean Wave Resource,” Electric Power Research Institute, December 2011, https://www1.eere.energy.gov/water/pdfs/mappingandassessment.pdf#:~:text=For%20devices%20with%20a%20100-fold%20operating%20range,as%20follows:%20250%20TWh/yr%20for%20the%20West.

11 This means it could represent 30 to 50 gigawatts of (GW) installed capacity. “Wave and Tidal Energy: Part of the UK’s Energy Mix,” Government of the United Kingdom, January 22, 2013, https://www.gov.uk/guidance/wave-and-tidal-energy-part-of-the-uks-energy-mix?utm_source=chatgpt.com.

12 “Assessing the Potential of Offshore Renewable Energy in Africa,” 30–32.

13 This is accessible through a global database for wave energy projects named PRIMRE, which is kept by several of the US National Laboratories under the Department of Energy. “Marine Energy Projects,” PRIMRE, last visited April 21, 2025, https://openei.org/wiki/PRIMRE/Databases/Projects_Database/Projects.

14 The facility relies on four buoys that move with wave action. Amir Garanovic, “CorPower Ocean’s Wave Energy Device Starts Exporting Power to Portugal’s Grid,” Offshore Energy, October 13, 2023, https://www.offshore-energy.biz/corpower-oceans-wave-energy-device-starts-exporting-power-to-portugals-grid/.

15 “Port of LA Pilot Project,” Eco Wave Power, last visited April 21, 2025, https://www.ecowavepower.com/port-of-la.

16 For example, with a closed-cycle OTEC device, warm surface water is pumped through a contained working fluid with a low boiling point, like ammonia. The fluid evaporates and forms a pressurized vapor that drives a turbine connected to a generator and produces electricity. After passing through the turbine, the vapor moves to a condenser, where it’s cooled by the cold water pumped from the deep sea. The water condenses to a liquid and the cycle repeats.

17 “White Paper on OTEC,” Ocean Energy Systems, October 18, 2021, 8, https://www.ocean-energy-systems.org/publications/oes-position-papers/document/white-paper-on-otec/.

18 Ibid., 12.

19 Sonal Patel, “OTEC, a Long-Stalled Baseload Ocean Power Technology, Is Seeing a Swell,” Power, June 1, 2023, https://www.powermag.com/otec-a-long-stalled-baseload-ocean-power-technology-is-seeing-a-swell.

20 “Assessing the Potential of Offshore Renewable Energy in Africa,” 41–42.

21 Methane hydrates are estimated to contain from 100,000 to almost 300,000,000 trillion cubic feet (TCF) of natural gas (twice the amount of carbon contained in all fossil fuels on Earth, including coal), with energy value estimates from 60,000 exajoules (EJ) to 800,000 EJ. For context, the International Energy Agency estimated total global energy supply for 2023 to be 642 EJ, or from about 1 percent to 0.01 percent of the total energy thought to be contained in methane hydrates. “Natural Gas Hydrates—Vast Resource, Uncertain Future,” US Geological Survey, last visited April 21, 2025, https://pubs.usgs.gov/fs/fs021-01/fs021-01.pdf; “Climate Change 2007: Working Group III: Mitigation of Climate Change,” Intergovernmental Panel on Climate Change, 2007, https://archive.ipcc.ch/publications_and_data/ar4/wg3/en/ch4s4-3-1-2.html; “World Energy Outlook,” International Energy Agency, October 2024, 296, https://www.iea.org/reports/world-energy-outlook-2024.

22 “Methane Hydrate,” Japan Petroleum Exploration Company, Ltd., last visited April 21, 2025, https://www.japex.co.jp/en/technology/research/mh/.

23 World Energy Outlook 2024 evaluates two other scenarios: Announced Pledges Scenario (APS) and Net Zero Emissions by 2050 (NZE). Given current national policies concerning climate change, particularly those of the United States, the STEPS scenario appears, to the author, to be the most reasonable assumption of these three—and perhaps optimistic. Oil supply is expected to increase until 2030 and then settle to 93 mbd in 2050. “World Energy Outlook,” 137. For natural gas and STEPS, the IEA estimates that 2023 production was 4,218 billion cubic meters (bcm), will increase until 2030, and will then settle to 4,377 bcm in 2050. “World Energy Outlook,” 144.

24 “Offshore Production Nearly 30% of Global Crude Oil Output in 2015,” US Energy Information Administration, October 25, 2016, https://www.eia.gov/todayinenergy/detail.php?id=28492; “Distribution of Onshore and Offshore Crude Oil Production Worldwide from 2005 to 2025,” Statista, last visited April 21, 2025, https://www.statista.com/statistics/624138/distribution-of-crude-oil-production-worldwide-onshore-and-offshore/; “Production of Natural Gas Worldwide in 2022 with a Forecast for 2030 to 2050, by Project Location,” Statista, last visited April 21, 2025, https://www.statista.com/statistics/1365007/natural-gas-production-by-project-location-worldwide/.

25 Camillus Eboh, “Nigeria Steps Up Crackdown on Oil Theft as It Targets 3 million Bpd Production,” Reuters, December 31, 2024, https://www.reuters.com/business/energy/nigeria-steps-up-crackdown-oil-theft-it-targets-3-million-bpd-production-2024-12-31.

26 Pranav Joshi, “Africa’s Deepwater Boom: A Critical Source of New Energy Supply in the Decade to Come,” Rystad Energy, October 31, 2024, https://www.rystadenergy.com/insights/africa-s-deepwater-boom-a-critical-source-of-new-supply-in-the-decade-to-come.

27 BP and partners Greater Tortue Ahmeyim project this number based on a 2014 discovery of 120 trillion cubic feet of natural gas across the two countries. “BP Achieves First Gas at Major West Africa Offshore Project,” Maritime Executive, January 2, 2025, https://maritime-executive.com/article/bp-achieves-first-gas-at-major-west-africa-offshore-project.

28 Mariana Durao, “Petrobras Outlines Five-Year Plan to Exceed $100 Billion Spend on E&P Projects,” Bloomberg, November 18, 2024, https://worldoil.com/news/2024/11/18/petrobras-outlines-five-year-plan-to-exceed-100-billion-spend-on-e-p-projects/; Guilherme Estrella, “Pre-Salt Production Development in Brazil,” 20th World Petroleum Congress, May 2021, https://firstforum.org/wp-content/uploads/2021/05/Publication_00593.pdf.

29 “Guyana Project Overview,” ExxonMobil, last visited April 21, 2025, https://corporate.exxonmobil.com/locations/guyana/guyana-project-overview; “500 Million Barrels of Oil Produced from Guyana’s Stabroek Block,” ExxonMobil, last visited April 21, 2025, https://corporate.exxonmobil.com/locations/guyana/news-releases/11132024_500-million-barrels-of-oil-produced-from-guyanas-stabroek-block.

30 “Global Wind Report 2024,” Global Wind Energy Council, 2024, 14–15, https://26973329.fs1.hubspotusercontent-eu1.net/hubfs/26973329/2.%20Reports/Global%20Wind%20Report/GWR24.pdf.

31 China had installed capacity of about 38 GW as of 2023 and expects to add 65 percent of 19 GW additional new global installed capacity in 2025. Petra Manuel and Kartik Selvaraju, “Global Offshore Wind Poised for Landmark 19 GW of Additions in 2025,” Rystad Energy, March 3, 2025, https://www.rystadenergy.com/news/global-offshore-wind-landmark-19gw.

32 “4C Offshore,” TGS, last visited April 21, 2025, https://map.4coffshore.com/offshorewind/.

33 The three operating farms are the Block Island facility (in Rhode Island state waters), South Fork Wind, and Vineyard Wind (temporarily paused to fix blades after one broke). This includes the Coastal Virginia Offshore Wind (CVOW) project offshore of Virginia and the largest single wind farm in the works for the United States, with 2.6 GW installed capacity planned. “Delivering Wind Power,” Dominion Energy, last visited April 21, 2025, https://coastalvawind.com/about-offshore-wind/delivering-wind-power.aspx.

34 “Orsted Ceases Development of Ocean Wind 1 and Ocean Wind 2 and Takes Final Investment Decision on Revolution Wind,” Orsted, October 31, 2023, https://us.orsted.com/news-archive/2023/10/orsted-ceases-development-of-ocean-wind-1-and-ocean-wind-2; “Temporary Withdrawal of All Areas on the Outer Continental Shelf From Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects,” Federal Register 90, 18 (2025), https://www.govinfo.gov/content/pkg/FR-2025-01-29/pdf/2025-01966.pdf.

35 “Assessing the Potential of Offshore Renewable Energy in Africa,” 44–45.

36 “Proposed Gagasi Offshore Floating Wind Farm Near Richards Bay, KwaZulu-Natal, South Africa,” Mybroadband, December 2024, https://mybroadband.co.za/news/wp-content/uploads/2024/12/Annexure-1-Gagasi-BID-2024.pdf.

37 The United States currently considers fifty minerals to be critical, forty-seven of which are chemical elements. “2022 Final List of Critical Minerals,” US Geological Survey, February 24, 2022, https://www.federalregister.gov/documents/2022/02/24/2022-04027/2022-final-list-of-critical-minerals. Sand, although not considered critical and relegated to a footnote in this short paper, is the principal non-energy mineral quarried offshore of Atlantic coasts. The US Bureau of Ocean Energy Management (BOEM), for example, is actively inventorying sand on the US continental shelf and, often in tandem with the US Army Corps of Engineers, identifying sand that is collected under requirements to minimize environmental impacts. The sand is conveyed to shore for beach replenishment or for island nature preserves. The amount is huge: since its sand program began in the mid-1990s, BOEM and partners have moved 193 million cubic yards of sand for restoring 481 miles of coastline in eight states. “5 Things to Know About the BOEM Marine Minerals Program,” BOEM, LinkedIn, November 16, 2023, https://www.linkedin.com/pulse/5-things-know-boem-marine-minerals-program-46brc/. Sand quarry programs elsewhere on Atlantic coasts are less institutionalized, although French Guyana in South America has inventoried offshore sand for potential harvesting. “Exploring the Potential for Sea Sand Resources on French Guiana’s Continental Shelf,” Bureau de Recherches Geologiques, September 8, 2024, https://www.brgm.fr/en/reference-completed-project/exploring-potential-sea-sand-resources-french-guiana-continental-shelf.

38 “Cobalt,” US Geological Survey, 2024, https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-cobalt.pdf; “Democratic Republic of Congo: Government Must Deliver on Pledge to End Child Mining Labour by 2025,” Amnesty International, September 1, 2017, https://www.amnesty.org/en/latest/news/2017/09/democratic-republic-of-congo-government-must-deliver-on-pledge-to-end-child-mining-labour-by-2025/.

39 The California Mountain Pass mine produced most of the world’s rare earth elements between 1965 and 1995 before production declined, in part because of competition from China. The mine has been reopened, but special attention is needed to appreciate why the marketplace for it failed. Stephen B. Castor, “Rare Earth Deposits of North America,” Resource Geology, November 2, 2008, https://onlinelibrary.wiley.com/doi/10.1111/j.1751-3928.2008.00068.x; “2023 Key Highlights,” Energy Institute, last visited April 21, 2025, https://www.energyinst.org/statistical-review/insights-by-source.

40 “Minerals: Polymetallic Sulphides,” International Seabed Authority, last visited April 21, 2025, https://www.isa.org.jm/exploration-contracts/polymetallic-sulphides/; “Mid Atlantic Ridge,” International Seabed Authority, last visited April 21, 2025, https://www.isa.org.jm/maps/mid-atlantic-ridge/; “Minerals: Cobalt-Rich Ferromanganese Crusts,” International Seabed Authority, last visited April 21, 2025, https://www.isa.org.jm/exploration-contracts/cobalt-rich-ferromanganese-crusts/. The ISA has issued three fifteen-year contracts for Atlantic PMS exploration under the aegis of Russia, France, and Poland. One contract for ferromanganese crusts sponsored by Brazil was issued but was voluntarily terminated in 2022.

41 See, for example: Eva Paulis, “Shedding Light on Deep-Sea Biodiversity—A Highly Vulnerable Habitat in the Face of Anthropogenic Change,” Frontiers in Marine Science, 2021, https://www.frontiersin.org/journals/marine-science/articles/10.3389/fmars.2021.667048/full.

42 Unleashing America’s Offshore Critical Minerals and Resources. Executive Order 14285. April 24, 2025. 90 FR 17735. https://www.federalregister.gov/documents/2025/04/29/2025-07470/unleashing-americas-offshore-critical-minerals-and-resources.

43 “The Metals Company to Apply for Permits under Existing U.S. Mining Code for Deep-Sea Minerals in the High Seas in Second Quarter of 2025,” The Metals Company, March 27, 2025; https://investors.metals.co/news-releases/news-release-details/metals-company-apply-permits-under-existing-us-mining-code-deep

44 Eric Lipton, “Trump-Era Pivot on Seabed Mining Draws Global Rebuke,” New York Times, March 30, 2025. https://www.nytimes.com/2025/03/30/us/politics/trump-mining-metals-company.html.

45 “Impossible Metals Applies for Deep Sea Mining Lease in U.S. Federal Waters,” April 15, 2025. https://impossiblemetals.com/blog/impossible-metals-applies-for-deep-sea-mining-lease-in-u-s-federal-waters/

46 “Interior Launches Process for Potential Offshore Mineral Lease Sale Near American Samoa,” US Department of the Interior, May 20, 2025. https://www.doi.gov/pressreleases/interior-launches-process-potential-offshore-mineral-lease-sale-near-american-samoa.

47 “About ISA,” International Seabed Authority, last accessed April 21, 2025, https://www.isa.org.jm/about-isa/; “United Nations Convention on the Law of the Sea,” United Nations, December 10, 1982, https://www.un.org/Depts/los/convention_agreements/texts/unclos/UNCLOS-TOC.htm.

48 “30 U.S. Code §1401—Congressional Findings and Declaration of Purpose,” Legal Information Institute, Cornell Law School, last visited April 21, 2025, https://www.law.cornell.edu/uscode/text/30/1401.

49 “43 U.S. Code Chapter 29 Subchapter III—Outer Continental Shelf Lands,” Legal Information Institute, Cornell Law School, last visited April 21, 2025, https://www.law.cornell.edu/uscode/text/43/chapter-29/subchapter-III.

50 “National Environmental Policy Act of 1969,” GovInfo, 1969, https://www.govinfo.gov/content/pkg/COMPS-10352/pdf/COMPS-10352.pdf.

51 Federal agencies must avoid “jeopardizing” the survival of listed species or causing adverse impacts to “critical habitat” under Section 7 of the ESA, and actions of regulated persons can have only “negligible adverse impact” on any marine mammal under Section 101(a)(5) of the MMPA. “Endangered Species Act,” US Fish and Wildlife Service, last visited April 21, 2025, https://www.fws.gov/laws/endangered-species-act/section-7; “Marine Mammal Protection Act,” NOAA Fisheries, last visited April 21, 2025, https://www.fisheries.noaa.gov/national/marine-mammal-protection/marine-mammal-protection-act.

52 “Council Directive 92/43/EEC of 21 May 1992 on the Conservation of Natural Habitats and of Wild Fauna and Flora,” European Union, EUR-Lex, last visited April 21, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:31992L0043.

53 “Member Country Contacts and Profiles,” International Offshore Petroleum Environmental Regulators, last visited April 21, 2025, https://www.ioper.org/member-profiles/.

54 The ISA prospecting and exploration rules define “serious harm” in: “Consolidated Regulations and Recommendations on Prospecting and Exploration,” International Seabed Authority, 2015, 4, https://www.isa.org.jm/wp-content/uploads/2022/11/en-rev-2015.pdf; “Draft Regulations on Exploitation of Mineral Resources in the Area,” International Seabed Authority, March 22, 2019, 117, https://www.isa.org.jm/wp-content/uploads/2022/06/isba_25_c_wp1-e_0.pdf. The ISA has developed an environmental management process, including environmental impact assessments (EIAs) to facilitate the identification, assessment, and mitigation of harmful effects of mining projects. But, like NEPA in the United States, the process is procedural and does not in itself answer the question: How much impact is too much?

55 “Report of the United Nations Conference on Environment and Development,” UN General Assembly, August 12, 1992, https://www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_CONF.151_26_Vol.I_Declaration.pdf; ISBA/25/C/WP.1 (2019) Part I. Regulation 2 (e)(ii). Page 10; ISBA/19/C/17 (2016). Regulation 31.2, page 20.

56 “Marine Protection Atlas,” Marine Conservation Institute, last visited April 21, 2025, https://mpatlas.org/countries/.

57 A new UNCLOS protocol, not yet in force, on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction provides a mechanism for international cooperation on biodiversity conservation on the high seas. “Law of the Sea,” UN Treaty Collection, last visited April 21, 2025, Chapter XXI, https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXI-10&chapter=21&clang=_en.

58 One mine—Mountain Pass in California—was the world’s leading producer of certain critical elements before it closed for lack of profitability. It reopened recently with help from the US government, but those seeking more production of these minerals in the United States and elsewhere need to look at the mineral-specific situations in the face and understand why the marketplace led to Chinese dominance.

59 Muriel Rabone, et al., “How Many Metazoan Species Live in the World’s Largest Mineral Exploration Region?” Current Biology 33, 12 (2023), https://www.cell.com/current-biology/fulltext/S0960-9822(23)00534-1#fig3.

60 Neither would deep sea mining meet the similar environmental standards of the Deep Seabed Hard Mineral Resources Act (DSHMRA), which are applicable to high seas mining by any entities under US jurisdiction, or of OCSLA, which are applicable to anyone proposing to mine on the US outer continental shelf.

61 Dario Amodei, “Machines of Loving Grace,” DarioAmodei.com, October 2024, https://www.darioamodei.com/essay/machines-of-loving-grace.

62 These models include Gemini, Copilot, Chat GPT, Claude, Perplexity, Mistral, and DeepSeek, among others.

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Keeping China at bay and critical minerals stocked: The case for US-Africa defense collaboration

Aleksandra Gadzala Tirziu — Fri, 06 Jun 2025 15:02:47 +0000

The United States is ill prepared to confront the challenges of an increasingly hostile global strategic environment. A coordinated coalition of adversarial states is working to dismantle the US-led global order, seeking to replace it with one defined by their ambitions and autocratic principles. At the forefront of this effort is China, which is rapidly accelerating its military capabilities and expanding its defense industrial base (DIB) to field sophisticated weapons systems designed to deter the United States globally and secure its goal of national rejuvenation. Aligned with China are Russia, Iran, and North Korea—forming an increasingly unified axis of authoritarians steadily advancing toward this objective. Compounding these challenges are increasingly frayed traditional US security alliances, notably in Europe, that leave the United States further exposed.

The most effective strategy to contend with this evolving threat landscape is through robust preparedness—both immediate and long term. Against this background, US and allied attention has increasingly turned to Africa. Africa holds one-third of the world’s known mineral reserves, including 80 percent of platinum and chromium, 47 percent of cobalt, and 21 percent of graphite.

Of the fifty minerals identified as critical by the US Geological Survey (USGS), thirty-two are found in Africa. US policymakers have therefore begun to explore partnerships with African countries to secure these resources. Yet, despite several promising initiatives, the United States still lacks a coherent and comprehensive policy for engagement—particularly one that can compete with the entrenched influence of the axis of authoritarian states, notably Russia and China, in the continent’s mining industry.

By supporting African nations in the development of their domestic mineral processing capabilities, the United States could enable them to retain a greater share of their mineral wealth and build self-sufficiency in defense. Such efforts could also diminish China’s influence across the continent. For the United States, developing these capabilities could secure a reliable source of critical minerals.

This report begins to lay the groundwork for such an effort by:

Identifying the defense capabilities the United States should prioritize to remain competitive in the evolving global strategic environment and the critical minerals necessary to support them.
Charting Africa’s critical mineral resources relevant to US defense needs and assessing the shifting defense postures of African nations, particularly where the development of their weapons systems and security objectives aligns with US interests.
Underscoring the importance of US support for building Africa’s mineral processing infrastructure, while addressing the structural barriers that have hindered progress so far.
Advancing targeted recommendations for US policymakers to operationalize such efforts and redefine US-Africa relations for today’s global challenges.

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How Kazakhstan can anchor a resilient rare‑earth supply chain for the West

Miras Zhiyenbayev — Tue, 03 Jun 2025 10:00:00 +0000

The rare-earth supply crunch underscores a critical lesson: The United States cannot afford to rely on China’s goodwill for minerals essential to its economy and security.

China dominates the rare-earth supply chain, with Beijing supplying about 60 percent of global rare-earths output and controlling up to 90 percent of refining capacity. For the United States, which needs neodymium and dysprosium for F‑35 fighter jet engines as badly as it needs lithium for electric vehicles, continued dependence on Beijing is impossible. The solution is not wishful “onshoring” to the United States alone; it is establishing a portfolio of reliable partners. Kazakhstan, already the world’s leading uranium producer and a top‑ten copper and zinc exporter, is a prime candidate for such a partnership.

Rare earths have become a geopolitical flashpoint. In practice, that means Beijing can throttle supply at will. In April, for example, China abruptly restricted exports of several important rare earths and permanent magnets—actions triggered by trade disputes with the United States under the pretext of “energy security.” US firms and strategists described the move as China’s latest attempt to weaponize its rare-earths dominance.

Supply shocks will recur, not recede. After Beijing halted exports of rare-earth refining technology to the United States in late 2023, it spent 2024 steadily ratcheting up export-license requirements on strategic rare-earth oxides or outright banning its exports. These moves culminated in April of this year, with Beijing placing export restrictions on seven heavy and medium rare-earth elements (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium) on dual-use national-security grounds.

The United States has only just begun to free its high-tech supply chain dependence on China. Over the past few years, for example, US policymakers have launched some domestic projects and lured allies in Europe and Australia to develop alternatives, but many of those efforts are still nascent. New supply lines will take years to mature. Washington needs a long-term partnership strategy that goes beyond homespun mining; it needs countries capable of supplying rare earths at scale. Since 2020, Kazakhstan has ramped up rare-earth mining, increasing its exports nearly fivefold by 2024. Still, both in 2023 and 2024, 100 percent of its rare-earth output is exported to China—a telling indicator that the resource is there, but does not currently flow to the West. By moving swiftly, the United States could hedge against future Chinese disruptions—and help build a secure, diversified global supply chain for these critical minerals.

Kazakhstan’s rare earths

Unlike some prospective supplier countries, Kazakhstan already knows it has rare-earth wealth. In early April, geologists in the country announced the “Zhana Kazakhstan” discovery: an estimated twenty million metric tons of rare-earths‑bearing ore in the Karagandy region, including sizable heavy‑rare‑earth concentrations. If even 10 percent of the ore proves recoverable at today’s grades, that equates to around 200,000 tons of rare-earth oxide content—enough to meet current US neodymium magnet demand for a dozen years. If validated, the site would give Kazakhstan the world’s third‑largest rare-earth element reserves, trailing only China and Brazil. While promising, these preliminary findings are no sure thing and will require deeper study.

This find is not an outlier. Soviet‑era data and recent airborne surveys point to additional prospects across southern and eastern Kazakhstan. The geology has been there; what was missing was investor certainty. That is changing fast. In just the past few years, the government has opened scores of new exploration projects.

Kazakhstan is no newcomer to big mining. In 2024, the country led the world in uranium output (about 38 percent of global supply) and ranked among the top ten producers of copper and zinc. The national mining concern, Tau-Ken Samruk, consolidates dozens of mines and has global joint ventures in everything from gold to base metals. Kazakhstan’s energy and transport infrastructure likewise favors large-scale mining, as it already accounts for 14 percent of the country’s gross domestic product.

Kazakhstan’s “multivector” diplomacy also plays a factor. Kazakh President Kassym-Jomart Tokayev courts Beijing and Moscow, yet he also seeks deeper ties with Washington and Brussels to balance against those giants. That instinct makes Astana a willing partner for the United States, and a less risky one than conflict-scarred alternatives such as Myanmar and the Democratic Republic of the Congo. At the same time, the United States should not expect Kazakhstan to choose only Western partners over the major powers along its eastern and northern borders.

Since 2018, Astana has overhauled its subsoil code on a “first come, first served” model. New legislation helps promote fiscal stability, offers value-added tax holidays on exploration equipment, and caps royalties. As a result, majors from Rio Tinto to Fortescue have launched joint ventures, while US‑backed Cove Capital began drilling rare-earths targets near Arkalyk in 2024.

Kazakhstan also has an edge in infrastructure. The Middle Corridor rail‑and‑port network—which runs from western China through Kazakhstan to the Caspian Sea and onward to Europe—was expanded last year with European Union (EU) financing. Aktau’s Caspian port already handles uranium concentrate bound for Canada and France; rare-earths concentrates could follow the same route with minimal modification.

In short, Kazakhstan offers what many mining countries do not: favorable geology and the business environment and infrastructure to exploit it. Kazakhstan already has smelters and refineries for many ores, and it boasts production of advanced materials such as purified manganese sulfate and titanium metal. It even produces gallium (used in semiconductors) and recycles rhenium, though admittedly it still lacks deep processing for rare-earth oxides.

The way forward

Washington has learned the hard way that pledges alone won’t break Beijing’s monopoly, and its next move should elevate quiet deals into an explicit strategy. On the Kazakh side, top leaders have made it clear that developing mining for Western markets is a priority. For example, Tokayev has called critical minerals the country’s “new oil,” and he has signed a number of memoranda with foreign partners on exploration and processing. Kazakhstan’s September 2024 “Kazakh-German” forum alone produced twenty-three agreements in mining, including rare-earth joint ventures.

Here are the three critical steps Washington and Astana should take next:

Unlock normal trade by repealing the Jackson-Vanik Amendment and grant Permanent Normal Trade Relations (PNTR) to Kazakhstan. The United States should finish what H.R. 1024 has already teed up: removing Kazakhstan from the Soviet-era Jackson-Vanik Amendment and extend PNTR to Kazakhstan. Scrapping this relic costs no money, instantly signals strategic seriousness, and eliminates the legal ambiguity that still shadows US financing and offtake contracts with Kazakh mines. PNTR lets both sides write binding long-term supply agreements.
Set up a US–Kazakhstan rare-earth task force to drive the deals. The United States and Kazakhstan should co-chair a cabinet-level task force comprised of the US State Department and US Commerce Department, as well as Kazakhstan’s Ministry of Industry. This task force would set annual, public targets for the number of exploration licenses issued to Western consortia, the amount of pilot separation plants financed and built on Kazakh soil, and the export tonnage of heavy and medium rare-earth elements to non-Chinese markets. The task force could instruct the US International Development Finance Corporation and Export-Import Bank of the United States to prioritize Kazakh rare-earth projects, while Kazakhstan fast-tracks permitting and guarantees site security. Early co-location of processing near the mine head would lock in long-term offtake for US buyers and complement EU infrastructure money already pledged for the Aktau port.
Deploy a blended-finance and technology package along the full value chain. Washington should pair loan guarantees with technical assistance from the US Geological Survey, Oak Ridge National Laboratory, and the Department of Energy’s Critical Materials Institute. Kazakhstan should match that support by streamlining visas for engineering teams and auctioning new mine blocks on transparent terms. The Pentagon’s National Defense Stockpile could start purchasing Kazakh oxides, while the Department of Energy and Nazarbayev University co-fund recycling research and development to close the loop at home.

To be sure, there are challenges ahead, and mining remains a difficult, uncertain venture. Bringing a greenfield rare-earths mine to commercial output can take more than a decade. But doing nothing cements Beijing’s leverage for that same decade and beyond. By acting now, Washington can buy future resilience and signal to market actors that rare-earths diversification is real.

Miras Zhiyenbayev is the advisor to the chairman of the board for international affairs and initiatives at Maqsut Narikbayev University, Astana, Kazakhstan. He is also co-sponsoring the June 4 US-Central Asia Forum at the Atlantic Council.

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US-Ukraine minerals deal creates potential for economic and security benefits

Svitlana Kovalchuk — Tue, 20 May 2025 20:50:09 +0000

The Ukrainian parliament ratified a landmark economic partnership agreement with the United States in early May, setting the stage for a new chapter in bilateral relations between Kyiv and Washington. The minerals deal envisages long-term cooperation in the development of Ukrainian natural resources. It marks an historic shift in Ukraine’s status from aid recipient to economic partner, while potentially paving the way for the attraction of strategic investments that could help fuel the country’s recovery.

The agreement was widely welcomed in Kyiv. Ukraine’s Minister of Economy and First Deputy Prime Minister Yulia Svyrydenko called the deal “the foundation of a new model of interaction with a key strategic partner,” and noted that the Reconstruction Investment Fund within the framework of the agreement would be operational within a matter of weeks. “Its success will depend on the level of US engagement,” she emphasized.

This deal isn’t just about mining and investment. It is a new kind of partnership that combines economic cooperation with security interests. US Treasury Secretary Scott Bessent, who played a key role in negotiating the terms of the agreement, said the minerals deal was a signal to Americans that the United States could “be partners in the success of the Ukrainian people.” Others have stressed that the partnership will allow the US to recoup the billions spent supporting Ukraine in the war against Russia. However, the deal isn’t primarily about reimbursement. It is a declaration of a strategic alliance rooted in mutual economic interest.

The new agreement between Kyiv and Washington differs greatly from classic concession deals as Ukraine retains full ownership of national natural resources while the Reconstruction Investment Fund will be under joint management. Unlike more traditional trade deals or resource acquisitions, this is a strategic agreement that combines commercial objectives with geopolitical interests, making it a textbook example of economic statecraft. By establishing military aid as a form of capital investment, the United States is securing a long-term stake in Ukraine’s security and the management of the country’s resources.

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The minerals deal with Ukraine offers a number of obvious potential advantages for the United States. Crucially, it ensures preferential access to rare and highly valued natural resources like lithium and titanium, thereby reducing dependency on China. This is a strategic win for Washington with the possibility of significant long-term geopolitical implications. The deal also creates a framework for further US military aid to be treated as an investment via the Reconstruction Investment Fund, providing opportunities for the United States to benefit economically from continued support for Ukraine.

By signing a long-term resource-sharing agreement, the United States is also sending an important signal to Moscow about its commitment to Ukraine. Any US investments in line with the minerals deal will involve a significant American financial and physical presence in Ukraine, including in areas that are close to the current front lines of the war. Advocates of the deal believe this could help deter further Russian aggression. Kremlin officials are also doubtless aware that around forty percent of Ukraine’s critical mineral reserves are located in regions currently under Russian occupation.

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There are fears that the mineral deal makes Ukraine too dependent on the United States and leaves the country unable to manage its own resources independently. Some critics have even argued that it is a form of dependency theory in action, with Ukraine’s mineral wealth set to primarily fuel the needs of US industry rather than building up the country’s domestic economy. However, advocates argue that Ukraine was able to negotiate favorable terms that create a credible partnership, while also potentially securing valuable geopolitical benefits.

The agreement provides the US with a form of priority access but not exclusivity. Specifically, the US is granted the right to be informed about investment opportunities in critical minerals and to negotiate purchase rights under market conditions. However, the framework of the agreement explicitly respects Ukraine’s commitments to the EU, ensuring that European companies can still compete for resource access.

In terms of implementation, it is important to keep practical challenges in mind. The identification, mining, and processing of mineral resources is not a short-term business with immediate payoffs. On the contrary, it could take between one and two decades to fully develop many of Ukraine’s most potentially profitable mines. Without a sustainable peace, it will be very difficult to secure the investment necessary to access Ukraine’s resources. Without investment, the Reconstruction Investment Fund risks becoming an empty gesture rather than an economic powerhouse.

The minerals deal has the potential to shift the dynamics of the war while shaping the US-Ukrainian relationship for years to come. The United States is not only investing in resources, it is also investing in influence. Viewed from Washington, the agreement is less about producing quick payoffs and more about allowing President Trump to make a statement to US citizens and to the Russians. For Ukraine, the minerals deal provides a boost to bilateral relations and creates opportunities for a new economic partnership. America’s strategic rivals will be watching closely to see how this partnership now develops.

Svitlana Kovalchuk is Executive Director at Yalta European Strategy (YES).

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Environmental risk weighs heavily on the possible rewards of deep sea mining

William Yancey Brown — Fri, 09 May 2025 16:37:31 +0000

Many industry stakeholders and policymakers view deep sea mining (DSM) as a panacea for securing sufficient supplies of critical minerals, which are needed for clean energy and defense technologies. In March, the White House issued an executive order promoting mining generally and, in April, followed with a second order to fast-track deep sea permitting and circumvent multilateral regulations of the practice.

However, an analysis of the applicable international and US environmental requirements for DSM reveals that, in practice, the risks to deep sea ecosystems would prohibit DSM from proceeding under current laws.

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Why pursue deep sea mining?

DSM is focused on collecting polymetallic nodules (PMNs) that look like potatoes and contain critical minerals that currently are sourced from mining on land. A patch of the Pacific Ocean called the Clarion-Clipperton (CC) Zone, which covers more than 4 million square kilometers, may hold more cobalt, nickel, and manganese reserves¹ than are available on land.

A. PMNs scatter scattered on the deep seabed
B. Front of a PMN
C. Side of a PMN

Copyright British Geological Survey, National Oceanography Center © UKRI 2018

What rules govern DSM?

DSM in the CC Zone and elsewhere beyond national jurisdiction is regulated by the International Seabed Authority (ISA) under the United Nations Convention on the Law of the Sea (UNCLOS), to which most United Nations members are parties. The ISA has entered into 15-year exclusive rights contracts for DSM exploration with 17 contractors looking at PMNs in the CC Zone.

The United States is not a party to UNCLOS and cannot sponsor DSM exploration contracts beyond its national jurisdiction, but it and other nations can pursue DSM on their continental shelves, as countries like the Cook Islands are doing. No country is currently mining in the CC Zone, but Nauru is trying.

But the United States has its own applicable laws on DSM: the US Deep Seabed Hard Mineral Resources Act and the US Outer Continental Shelf Lands Act.

So, what do international and US laws say about whether DSM is permissible?

United Nations Convention on Law of the Sea

UNCLOS addresses environmental protection for seabed activities. It directs the ISA to adopt rules for “the prevention of damage to the flora and fauna,”² to disapprove exploitation where “substantial evidence indicates the risk of serious harm to the marine environment,”³ and to include measures “necessary to protect and preserve rare or fragile ecosystems as well as the habitat of depleted, threatened, or endangered species and other forms of marine life.” ⁴

International Seabed Authority

The ISA has issued final rules for exploration⁵ and draft rules for exploiting⁶ deep sea resources. Both regulations require a “precautionary approach” (Principal 15 of the Rio Declaration on Environment and Development) and prohibit activities in international waters that would cause “serious harm,” which both rules define to be any effect which represents a “significant adverse change in the marine environment.”

US Deep Seabed Hard Mineral Resources Act

The United States has its own DSM policy in the Deep Seabed Hard Mineral Resources Act (DSHMRA). This awkward and long-dormant statute prohibits any person under US jurisdiction from exploration or commercial recovery in international waters unless the activity “cannot reasonably be expected to result in a significant adverse effect on the quality of the environment.” That standard is incorporated in regulations. Despite the obvious schism with UNCLOS and objections from the ISA and UNCLOS parties including China and Russia, Canada’s The Metals Company, encouraged by the White House, announced in March that it will apply for a DSHMRA permit to mine in the CC Zone.

US Outer Continental Shelf Lands Act

The Outer Continental Shelf Lands Act (OCSLA) applies to any DSM activities on the 13 million square kilometer US “outer continental shelf”—including Pacific territories where PMNs are found. OCSLA and its regulations have several environmental standards addressing exploration and also requiring mining operations to be “designed to prevent serious harm or damage to … any life (including fish and other aquatic life), property, or the marine, coastal, or human environment.” The potential for DSM in US territory is not an idle consideration. A company named Impossible Metals made an unsolicited request for a lease in 2024 to mine PMNs offshore American Samoa, and has reportedly resubmitted the proposal to the Trump administration, which is likely to be more receptive to the idea.

In sum, the environmental takeaways under these laws are similar:

Don’t mine if there will be “serious harm” to the environment (UNCLOS).

Don’t mine if there could be a reasonable expectation the activity will “result in significant adverse effect on the quality of the environment” (DSHMRA).
Don’t mine if there is “a threat of serious, irreparable, or immediate harm or damage to life (including fish and other aquatic life) … or to the marine, coastal, or human environment” (OCSLA).

Would DSM meet these standards?

Out of concern for environmental impacts of DSM, the International Union for Conservation of Nature (IUCN)—a leading global conservation organization with governmental members, including the United States—approved a resolution in 2020 calling for a moratorium on DSM in international waters. To date, 32 nations have called for a ban or moratorium on the practice.

Studies have shown that the habitats of PMNs teem with exotic and little-understood life. One seminal article estimates that over 6,000 multicellular species occur in the CC Zone, living on and among the PMNs. About 90 percent are probably still undiscovered to science. Each mining operation is likely to remove⁷ PMNs from hundreds of square kilometers each year of operation. If the PMNs disappear, so will these animals, potentially including pink “Barbie” sea pigs and other species that the Natural History Museum of London’s scientists have discovered.

Things go slowly in the deep sea. The PMNs form over millions of years. This is the oldest of old growth—if it is stripped away, the nodules would probably take the same millions of years to come back, if ever.

DSM impacts besides habitat removal include dispersion of animals, noise, and possible oxygen depletion. During DSM testing, contractors primarily use self-propelled collectors that leave tracks and produce sediment plumes with potentially far-reaching consequences⁸ for the marine environment. One recent study found some small and mobile animals commonly found in sediment everywhere in the CC Zone had re-colonized testing track areas after 44 years, however, large-sized animals that are fixed to the sea floor were still very rare in the tracks, showing little signs of recovery. Impossible Metals proposes to hover and pluck the nodules, but its technology is untested at scale.

The CC Zone is huge—4.2 million kilometers have commercial potential and 3.4 million⁹ are considered particularly attractive for mining. This isan area larger than Alaska, Texas, California, and Montana combined, and the abundance and diversity of life forms vary substantially across it.

What’s the takeaway?

No experienced and objective environmental regulator could reasonably conclude that DSM, as now proposed, would meet the environmental standards of UNCLOS, DSHMRA, or OCSLA.

With new technology, greater understanding of the deep sea environment, and advancements in artificial intelligence, future DSM efforts may be able to selectively harvest PMNs with less impact. But for now, deep sea mining does not pass the environmental tests of the laws that apply.

William Yancey Brown is a nonresident senior fellow at the Atlantic Council Global Energy Center. From 2013 to 2024, Brown was the chief environmental officer of the Bureau of Ocean Energy Management in the US Department of the Interior, where he oversaw the implementation of NEPA.

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Cautious optimism in Kyiv as Ukraine reacts to landmark US minerals deal

Peter Dickinson — Thu, 01 May 2025 14:49:44 +0000

There was a sense of cautious optimism in Kyiv on Thursday morning as Ukrainians reacted to news that a long-awaited natural resources agreement with the United States had finally been signed. While the details of the minerals deal are still being digested, many have already noted that the key terms of the agreement are now far more favorable for Ukraine than earlier drafts, which some Ukrainian critics had likened to “colonial” exploitation.

Ukrainian President Volodymyr Zelenskyy first raised the prospect of a minerals-sharing agreement between Ukraine and the United States in late 2024 as he sought to engage with Donald Trump in the run-up to America’s presidential vote. The idea gained further momentum following Trump’s election victory, but a planned signing ceremony was abandoned in late February following a disastrous Oval Office meeting between Trump and Zelenskyy.

When talks resumed in early spring, leaked details indicated a hardening of the American position, with US officials insisting on extensive control over Ukrainian assets and seeking to use revenues to repay aid provided to Ukraine during the first three years of Russia’s full-scale invasion. However, following weeks of exhaustive negotiations, the most contentious conditions have now been removed, resulting in a more forward-looking document that sets the stage for a potential deepening in the strategic partnership between Kyiv and Washington.

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Ukraine’s Minister of Economy Yulia Svyrydenko, who traveled to the US to sign the minerals deal on Wednesday evening following intense last-minute discussions over the fine print of the agreement, emphasized that Ukraine would retain ownership and control over its natural resources. She noted that the final wording “provides mutually beneficial conditions” for both countries, and praised the deal as “an agreement that reaffirms the United States commitment to Ukraine’s security, recovery, and reconstruction.”

Back in Kyiv, many saw the signing primarily as an opportunity to improve relations with the Trump White House following a turbulent few months that has seen the US President employ harsh rhetoric toward Ukraine while repeatedly blaming the country for Russia’s invasion. “Ukraine held the line. Despite enormous pressure, every overreaching demand from the other side was dropped. The final deal looks fair,” commented Kyiv School of Economics president Tymofiy Mylovanov. “It’s a major political and diplomatic win for Ukraine and the US that gives Trump a domestic political boost. That will translate, I expect, into a more positive attitude toward Ukraine.”

There was also much praise for the Ukrainian negotiating team and their ability to accommodate US interests while addressing Kyiv’s concerns. “This final version is significantly fairer and more mutually beneficial than earlier drafts,” stated Olena Tregub, who serves as executive director of Ukraine’s Independent Anti-Corruption Commission (NAKO). “To me, the minerals agreement is a clear win-win. It’s a well-negotiated, balanced deal that reflects both strategic vision and professionalism.”

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Many members of the Ukrainian parliament adopted a pragmatic view of the landmark minerals deal. “It seems like Trump was putting pressure on us in an attempt to get a victory during his first hundred days in office,” commented Oleksandr Merezhko, a lawmaker representing President Zelenskyy’s Servant of the People party who chairs the Ukrainian parliament’s foreign affairs committee. “The devil is in the details. But politically there are upsides. We have improved relations with Trump, for whom the deal is a win.”

Fellow Ukrainian member of parliament Inna Sovsun, who represents the opposition Golos party, underlined the unprecedented challenges Ukraine faced during negotiations as the country sought to broker a fair deal with a crucial ally while fighting for national survival. “We weren’t choosing between good and bad, we were choosing between bad and worse. What we got is better than the initial offer,” she noted.

While the general mood in Kyiv was relatively upbeat following the news from Washington, Sovsun stressed that the new natural resources agreement with the United States falls far short of the security guarantees that Ukraine is seeking in order to safeguard the country’s future and prevent further Russian aggression. “A true end to the war can only happen if the US provides significantly more weapons to Ukraine, is willing to apply greater sanctions pressure on Russia, or ideally both. If neither happens, it’s hard to expect the war to end.”

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

Shelby Magid: Ukraine is now in its strongest position since Trump took office

Matthew Kroenig: The United States now has a stronger stake in the future of Ukraine

Reed Blakemore: Ukraine’s critical minerals deposits will take years to bring to market

Ed Verona: With its unequal and exploitative terms, the deal’s future is uncertain

Doug Klain: The hard-won deal could reopen the door to more US military aid to Ukraine

Suriya Jayanti: Zelenskyy walked a very difficult line but the deal is a success

Andrew D’Anieri: There will be political drama, but expect Ukraine to ratify the deal

Oleh Shamshur: For Ukraine, the signed minerals deal is a major improvement over its earlier drafts

This deal gives Trump a concrete interest in Ukraine’s survival

This is a bad day for Russian President Vladimir Putin. The deal is a plus for US economic and national security policy. One, it is essential for the United States to have friends providing critical minerals. It cannot be dependent on adversaries such as China or Russia for that. So that is a plus. It is also positive for Ukraine, and not just because it now has an investor clearly committed to working on this subject of Ukrainian economic development. More importantly, this deal gives Trump—in terms he understands—concrete interest in Ukraine’s long-term survival as a secure, economically viable state.

The Kremlin will note with unhappiness that this agreement is the first occasion on which the new administration is talking about the provision of additional arms to Ukraine. It is unclear what the economic meaning of this is for the development of Ukrainian rare earths. What is absolutely clear is that, in Article VI of the deal laying out “Contributions to the Partnership,” the Trump administration is broaching for the first time sending arms to Ukraine. Making sure that does not happen has been one of Putin’s principal goals since the new administration took office.

—John E. Herbst is the senior director of the Atlantic Council’s Eurasia Center and a former US ambassador to Ukraine.

Ukraine is now in its strongest position since Trump took office

With the deal finally signed, Ukrainian officials can breathe an all too rare sigh of relief. Between fighting off a full-scale invasion and navigating a rocky road with Washington through cease-fire proposals, summits, contentious meetings, and a now iconic pull-aside meeting at the funeral of Pope Francis, Ukrainians have put in tremendous effort to close a deal that puts them in their strongest position yet with Washington since Trump took office.

Through intense negotiations, Ukrainian officials showed they could maneuver and persevere to ultimately get a fair deal. While the Trump administration put tremendous pressure on Ukraine to accept earlier deals, Ukraine managed to show that it is not just a junior partner that has to roll over and accept a bad deal. Ukrainian officials put their nation’s future first and managed the serious work to get to a final agreement that can be called a win on both sides.

This success and improvement in the US-Ukraine relationship comes as the Trump administration expresses increasing frustrations with Russia, questioning Putin’s willingness to end the war. Ukraine found itself under major attack shortly after the deal was signed, evidence of Putin’s pique at the agreement. While peace talks slow, the United States partially lifted its pause on military aid for Ukraine, approving the Trump administration’s first fifty million dollars’ worth of arms exports to the country through direct commercial sales.

As US Treasury Secretary Scott Bessent put it: “This agreement signals clearly to Russia that the Trump Administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term.” Such a statement and commitment from Washington now undercuts all of the Kremlin’s aims. With this deal and the administration’s other recent statements, perhaps Putin might realize he once again underestimated Ukraine.

—Shelby Magid is deputy director of the Atlantic Council’s Eurasia Center.

The United States now has a stronger stake in the future of Ukraine

Trump has said that the critical minerals deal provides a security guarantee for Ukraine. Traditional security experts have doubted whether such an arrangement can replace boots on the ground as an adequate assurance, but it will facilitate increased American investments and presence of US personnel in Ukraine. This will give the United States a strong stake in the future security and stability of the country. Indeed, for a businessman like Trump, this may even be a stronger statement of commitment than troop deployments.

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies.

Ukraine’s critical minerals deposits will take years to bring to market

The fact this deal got over the finish line after weeks of ups and downs speaks to the strategic value of the United States putting a marker down on Ukraine’s future—especially as the Trump administration accelerates efforts to negotiate an end to the war in Ukraine.

Whether or not that strategic marker manifests in natural resources is still very unclear, if not unlikely. Though the US-Ukraine deal treats natural resources in a broad sense—including oil and natural gas in addition to critical minerals—access to Ukraine’s mineral resources has remained a consistently animating feature of negotiations. To that end, little of Ukraine’s mineral future has changed since this deal was first put on the table. Many of its critical minerals deposits remain in contested environments that will take years to bring to market, assuming that a negotiated peace keeps those minerals in Ukraine. Post-conflict stability, energy and logistical inputs to make project development successful, as well as the quality and quantity of those mineral resources will all bear strongly on investor appetite to pursue the licenses that are the backbone of this new reconstruction investment fund. If those upstream resources are successfully developed, then a separate but necessary question is how much of the raw material then passes through value chains that bottleneck in China as it becomes finished precursors and components. The answer to that question will determine if this deal supports the de-risking strategy that the Trump administration is deploying on a number of fronts.

To be clear, the United States needs all the below-ground opportunities it can secure given the increasingly stark vulnerabilities it faces regarding China’s control of mineral supply chains. That makes this deal, in broad terms, a positive story. Yet it’s much too soon to characterize this deal as a “win” for supply chain de-risking rather than a useful card in Trump’s negotiations with Putin.

—Reed Blakemore is the director of research and programs at the Atlantic Council Global Energy Center.

With its unequal and exploitative terms, the deal’s future is uncertain

It must come as a relief to the Ukrainians that the United States dropped its insistence on including the cost of all previous financial and military aid on the balance sheet of this deal. Nevertheless, the so-called partnership agreement is so onerous that it is tantamount to picking the pockets of an assault victim. Faced with an invasion by an enemy three times its size, Ukraine had little choice but to acquiesce to terms that reduce it to the status of a virtual colony or risk incurring the enmity of what has been until recently one of its staunchest allies. Under such extenuating circumstances, Zelenskyy bit the bullet and signed off on the deal. However, some nettlesome questions remain.

Will this deal have to be ratified by the Rada, Ukraine’s legislature? The unequal and exploitative terms are not likely to be accepted without opposition from across the Ukrainian political spectrum. Is the deal subject to a “yes or no” vote, or will amendments be considered? If it is ratified by a slim majority, then would potential investors be willing to commit to projects if a future government might abrogate a deal that was arguably imposed under duress?

The history of mineral resources deals offers ample reason to doubt that this one would stand up well over the period typically required to develop large and capital-intensive projects with lead times of up to a decade. Russia, ironically, provides an example of how resource-related deals can come unraveled. Production sharing agreements signed during the difficult transitional period of the 1990s were subsequently repudiated by Putin’s regime, with Western partners forced to surrender control and majority ownership in major projects. There are many more such examples in the developing world. I suspect that few serious US investors will put their shareholders’ money at risk based on such a clearly unbalanced “deal.”

—Ed Verona is a nonresident senior fellow at the Atlantic Council’s Eurasia Center covering Russia, Ukraine, and Eastern Europe, with a particular focus on Ukrainian reconstruction aid.

The hard-won deal could reopen the door to more US military aid to Ukraine

After months of tough negotiations and cease-fires agreed to, Ukraine has given Trump another win. The announcement of an economic partnership between the United States and Ukraine—which started as a deal on access to Ukraine’s minerals but has since morphed into a broader investment fund for Ukraine’s reconstruction—is welcome news for anyone who wants to see Washington step back from the last few months of hostility toward Kyiv.

More than any specifics in this deal, the top takeaway is that while Putin continues to say “no” to Trump’s push for peace, Ukraine has yet again said “yes.”

But the specifics do matter, and Ukraine seems to have pulled off some seriously tough negotiating with the Trump administration. Past proposals from Washington reportedly saw the United States taking partial or total ownership of broad swaths of Ukraine’s natural resources and infrastructure, something that prompted Zelenskyy in February to say, “I’m not going to sign something that ten generations of Ukrainians will be paying for.” Now, Ukraine retains full ownership of its assets and has turned the deal into a joint investment fund toward the country’s future reconstruction, with only future—not past—US assistance to Ukraine counting as a contribution to the fund. It’s a big win indeed after Trump has repeatedly mentioned inflated figures of what Washington has sent to aid Ukraine.

More than anything though, agreeing on a deal may reopen the door to military assistance from the United States to Ukraine. While weapons obligated by the Biden administration continue to flow, Trump has yet to make any new commitments to aid Ukraine’s defense since taking office. Ukrainian Deputy Prime Minister Yulia Svyrydenko, who signed the agreement on Wednesday in Washington, said that in addition to direct financial contributions to the investment fund, new assistance such as air defense systems would be considered an investment in the fund. No country but the United States can provide long-range air defenses against Russia’s ballistic missile strikes on Ukrainian cities.

Trump has spent months searching for a win in Ukraine, and now he’s got one. But Russia’s invasion will not be solved by an economic partnership. Putin has repeatedly rejected cease-fires because he does not want peace—he wants Ukraine. If the White House really hopes to secure a peace deal with Russia, that will require putting meaningful pressure on the Kremlin through the type of new sanctions Congress has prepared and by following through with new military support for Ukraine.

—Doug Klain is a nonresident fellow at the Atlantic Council’s Eurasia Center.

Zelenskyy walked a very difficult line but the deal is a success

Ukraine seems to have managed to negotiate itself out from under a proposed colonial-style resource concession, signing what has evolved into the framework for a deal with the United States that is actually mutually beneficial. Earlier White House drafts of the deal sought de facto US ownership of all Ukraine’s extractive commodities and their supporting infrastructure in perpetuity, with some profit possible for Ukraine after $500 billion in “repayment” to the United States. But the final deal leaves ownership and control with Ukraine, has no such repayment threshold, requires the United States to contribute to the Reconstruction Investment Fund, and other much more balanced terms.

Although Zelenskyy didn’t clinch security guarantees or NATO membership in exchange, the result is a commercial advantage for the United States. It is also a chance at huge foreign investment for Ukraine with the profits kept safe(r) from corruption and thus more likely to actually fund the country’s reconstruction. Ukraine still has work to do to make itself a more attractive country for foreign investment, such as stronger anti-corruption and rule-of-law adherence. But as written, this deal is a big win. Zelenskyy can rightly take credit for walking a very difficult line and coming out successful. It may well buoy him politically and buttress his chances of staying in office, which had been in decline, not least due to the White House’s hostility, which may also have been tempered with this deal. At least as of now, this is a win-win for all involved.

—Suriya Jayanti is a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

There will be political drama, but expect Ukraine to ratify the deal

There’s no doubt that the US-Ukraine natural resources deal is a significant step forward in relations between the Trump and Zelenskyy administrations. After months of will-they or won’t-they speculation that centered on the Trump-Zelenskyy relationship, two of the most competent officials on each side—Bessent and Svyrydenko—got the deal done. Washington gets priority access for US companies to develop new natural resource projects in Ukraine and some solid investment protections to mitigate regulatory and corruption risks. Kyiv did not get security guarantees per se, and the donation of further military aid by the United States would count toward the US contribution to the Investment Fund. But it did secure a 50-50 management partnership over the fund, concessions on only future projects (rather than reach-back clauses that would have included proceeds from existing natural resource operations, previously put forward by the Trump team), and a long-term commitment by the United States to invest in a major piece of Ukraine’s renewal.

On the technical side, expect some opposition lawmakers in the Ukrainian parliament to try to hold up the ratification process. The technocrats and European-minded parties will likely focus on oversight over the deal, while populist parties and Russian influence operations will attempt to paint the deal as Zelenskyy selling Ukraine’s sacred lands to the decadent West. Neither element is likely to matter given that Zelenskyy’s Servant of the People party retains a legislative supermajority and can count on support from a range of independent MPs; the agreement will be ratified sooner rather than later.

For the United States, the agreement provides a new, more high-profile mandate for the Development Finance Corporation (DFC). Indeed, DFC, rather than Bessent’s Treasury Department, will oversee the fund from the US side. DFC, which had focused on providing hundreds of millions in risk insurance and small-scale loan guarantees in Ukraine under the Biden administration, will now be tasked with managing billions of dollars in strategic assets in Ukraine alone. The focus on natural resource development is a welcome broadening of DFC’s mandate and one that could extend to other areas across Eurasia.

—Andrew D’Anieri is a resident fellow at the Atlantic Council’s Eurasia Center.

For Ukraine, the deal is a major improvement over its earlier drafts

Judging from the published text of the minerals deal, it seems that the Ukrainian side managed to ensure that the most notorious elements of the last US draft were not included in the agreement’s final version. Most importantly, Ukraine retained control over its mineral wealth and will exercise full influence over the functioning of the reconstruction investment fund. The deal also recognizes Ukraine’s obligations as part of the process of the country’s accession to the European Union (EU). However, this recognition cannot be considered ironclad, as any conflicts that arise between complying with this agreement and Kyiv’s EU accession obligations are subject to consultation and negotiation.

In a notable reversal of some of the Trump team’s previous positions, the deal’s text refers to “Russia’s full-scale invasion,” indicates the possibility of continued US military assistance to Ukraine, and does not consider future revenue from Ukrainian critical minerals projects as repayment for assistance provided to Ukraine by the Biden administration. However, it remains to be seen whether signing this deal will prompt the Trump administration to modify its peace proposal by making it more acceptable for Ukraine. I still have my reservations about that.

—Oleh Shamshur is a nonresident senior fellow at the Atlantic Council’s Eurasia Center and a former Ukrainian ambassador to the United States.

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The Millennium Challenge Corporation could prove essential in the race for critical minerals. Reform it, don’t shut it down.

Aubrey Hruby — Thu, 24 Apr 2025 18:30:25 +0000

During the current whole-of-government effort to address US national security vulnerabilities in critical mineral supply chains, the Donald Trump administration is overlooking a major asset in the US commercial policy toolbox—the Millennium Challenge Corporation (MCC). In recent years, the MCC has fallen into the shadows of more high-profile US development finance tools such as the US International Development Finance Corporation (DFC) and the US Export-Import Bank (Eximbank). And reports this week indicate that the administration is planning to shutter the MCC entirely. That would be short-sighted. For an administration focused on aligning foreign aid with core strategic interests, particularly under an “America First” doctrine, the MCC represents an underutilized asset. Unlike other agencies such as the DFC and Eximbank, the MCC’s design—authorized by the bipartisan Millennium Challenge Act of 2003 (MCA 2003)—offers immediate, flexible, and large-scale grant capital that can be deployed immediately to advance US strategic priorities, without the need for congressional reauthorization or additional legislative action.

One of the most immediate opportunities for the Trump administration lies in deploying MCC resources to execute and accelerate a US-Democratic Republic of the Congo (DRC) critical minerals partnership currently under discussion. As the global race for cobalt, copper, and other energy transition minerals intensifies, China continues to dominate global upstream and midstream processing. The MCC’s country compact model and its authority to engage in regional deals can be reimagined to secure US access to mining opportunities, support US companies in their investment plans, develop necessary energy and transport infrastructure, and advance the regulatory reforms needed to give US companies greater confidence in investing in the Central African region. This can all be done without new legislation. Now is the time to redesign MCC’s operations so it can become a core pillar of a strategic, security-aligned America First foreign policy; failing to leverage this tool would be a strategic oversight.

The MCC: A “big push” development effort

The MCC was established in 2004 through the MCA 2003. Inspired by the Marshall Plan, it was created with a bold vision: to deliver transformative, large-scale development aid to countries that demonstrate a commitment to democratic governance, sound economic policies, and investment in their people. Distinct from traditional United States Agency for International Development (USAID) programming, the MCC’s model to date has focused on large five-year grants negotiated on a bilateral basis between the United States and recipient countries. These five-year agreements, known as “compacts,” can range from $100 million to $700 million, with the average being $350 million. These compacts fund large-scale infrastructure, education, and policy reform projects in select low- and lower-middle-income countries, and can take years to negotiate given the many steps involved (Figure 1). Figure 2 shows how MCC compacts are structured.

Figure 1. From selection to signing: The MCC’s multi-year compact development at a glance

Source: “Compact Assistance,” Millennium Challenge Corporation, last visited April 17, 2025, https://www.mcc.gov/resources/story/story-cbj-fy2025-compact-assistance/.

Figure 2. The MCC compact structure

Source: Author.

At its core, the MCC has operated as a development assistance program based on an aid-based philosophy, seeking to advance poverty reduction, access to services, and governance improvements in foreign countries. As of January 2025, the MCC had signed forty-five compacts with twenty-nine countries, with many nations signing more than one compact after the completion of the first five-year period. More than 80 percent of the countries supported by the MCC are located in Africa. Historically, countries became eligible for MCC compacts by scoring high on a complex set of twenty indicators (measured by third parties), covering areas such as political rights to immunization rates to land rights to fiscal policy and conservation. In 2018, the MCC received the right to enter into regional compacts to advance cross-border infrastructure and economic development projects that support trade corridors, regional power pools, and customs harmonization. However, only one regional compact has been signed to date.

As the number of eligible countries based on the MCC scorecard has decreased over time, the MCC was able to award threshold programs, which were smaller grants (of one to three years, averaging $20 million to $40 million) focused on helping countries address lagging scores on some of the eligibility indicators. Additionally, the MCC Candidate Country Reform Act, passed as part of the fiscal year 2025 National Defense Authorization Act, expanded the pool of eligible countries to include upper-middle-income countries.

What sets the MCC apart from the DFC and the Eximbank?

While the DFC and Eximbank play important roles in US foreign economic engagement, their tools and mandates differ fundamentally from those of the MCC. The DFC provides loans, equity, and political risk insurance. And while it has mobilized billions in private capital, it is limited by its requirement to generate a return on investment. Similarly, the Eximbank supports US exports through loan guarantees and insurance products but cannot invest in upstream development or non-commercial infrastructure. In contrast, the MCC provides flexible grant capital—an asset class that offers strategic advantages for the United States when competing with China’s state-backed investments and concessional financing.

In the case of critical minerals, this access to untied, large-scale grant capital means the MCC can support essential early-stage project development, including feasibility studies for mining projects, and can enable infrastructure and policy reforms in ways that commercial or quasi-commercial institutions cannot. For example, in the mining sector, MCC funds can help finance roads, rail, and power infrastructure essential to project bankability—thus paving the way for US private investors and DFC-backed investments to follow. Furthermore, the MCC, which has deep experience working with governments, can directly fund regulatory improvements and workforce development—areas that would be off-limits for the DFC or Eximbank. In the context of critical minerals that are needed for long-term US national and economic security, the MCC’s tools are indispensable.

The Trump administration is considering folding the MCC into the DFC—or even shutting down the agency entirely—in an effort to streamline and simplify the tools of US economic statecraft. While this might work in the long run, it would be a mistake in the short term. Due to significant differences in operational frameworks between the MCC and DFC, maintaining the MCC as an independent entity is critical to deploying the powers discussed above. Specifically, under current Office of Management and Budget (OMB) scoring rules, DFC equity investments are treated similarly to grants—scored on a one-to-one basis, which limits the DFC’s ability to expand equity initiatives without substantial new congressional appropriations. Integrating MCC grant resources into the DFC before DFC reauthorization legislation is passed, which may resolve the equity scoring issue, could lead to the DFC prioritizing the use of such funds for equity rather than grants. While equity is important and the DFC’s equity capacity should be expanded, the MCC’s flexible grant-making capacity should be preserved and leveraged to significantly de-risk projects that are of strategic importance to the United States.

MCC 1.0 vs. MCC 2.0

In the Trump administration’s ongoing transformation of US foreign assistance and commercial diplomacy architecture, rather than closing the agency altogether, there is an opportunity to use the MCC differently—to create an MCC 2.0 that will allow for the strategic deployment of US economic statecraft.

A reformed MCC—one that loosens eligibility requirements and speeds up compact development while still focusing on critical infrastructure development—would greatly benefit partner countries, particularly in Africa. With annual infrastructure needs exceeding $130 billion, African countries are actively seeking partners capable of mobilizing large-scale private investment responding quickly to the demands of their young and growing populations. The MCC can be redesigned to operate at the nexus of both African and US national interests.

Using the MCC to counter Chinese dominance in critical mineral supply chains

By simply changing how the MCC operates within its legislative mandate, as defined by the MCA 2003, the Trump administration can access a pool of flexible capital that can be redirected to shape critical mineral supply chains in ways that enhance US national security. The following points illustrate key areas of flexibility:

Country eligibility does not need to be defined through complex scorecards. Countries can be determined as eligible by the MCC board if they show adequate commitment to democratic governance, economic freedom, and investing in women and children (Section 607 MCA 2003). A board decision approach will dramatically reduce the time needed to negotiate compacts. The methodology can be changed each fiscal year with notice to Congress (Section 608.b.2.).
Compact countries are asked to make contributions relevant to meeting the objectives of the compact (Section 609.b.2). These contributions could take the form of mineral resources or rights, as is being discussed between the Trump administration and the government of Ukraine.
The MCC can pay for expert consultants or legal counsel on behalf of eligible countries to fast-track compact negotiations with the MCC (Section 609.g).
The MCC can award subsequent and concurrent compacts (for example, regional compacts) to countries so that long-term planning is possible beyond the initial five-year compact (Sections 609.j, 609.k, and 609.l).
MCC grants can be awarded (within the framework of a compact) to national governments, subnational governments, nongovernmental organizations, or private companies (Section 605.c).
The MCC can make other grants to individuals, firms, or governments deemed necessary for the functioning of the corporation (Section 614.a.3).
The MCC can make grants of up to five million dollars to universities (both foreign and US universities) for relevant data (Section 614.g). China has long supported the geology departments of African universities in its effort to access relevant data on mining opportunities and build a network of local experts. Under this provision of the MCA 2003, the MCC would be able to counter that influence and help build the skilled workforce needed for resilient mining industries.

This picture was taken by the author at the University of Antananarivo in Madagascar in 2024.

In rethinking the MCC’s operations, large pools of grant resources could be strategically directed toward building US partnerships in the mining, processing, and manufacturing of critical minerals. A generic compact could be signed with a country such as the DRC within three months of determining eligibility (in accordance with the 2023 MCA’s congressional notification requirements). Subsequently, projects could be developed and funded on a rolling basis. Figure 3 shows a potential structure for a compact focused on critical minerals.

Figure 3. The MCC 2.0: An investment partnership model

Source: Author.

Under this new MCC 2.0 compact structure, the United States and another country could form a joint venture (JV) focused on early-stage exploration. The JV would acquire exploration licenses from the country at no charge but would be required to advance licenses from exploration to the pre-feasibility stage within four years. This alignment of interests would help fast-track the permitting and government engagement around the deals. Once assets have been de-risked enough to generate interest from private investors, the JV company would sell down its interest. The JV would operate with the highest levels of transparency, good corporate governance, and data sharing, employing the latest technologies to more accurately assess mining opportunities.

Equity ownership of the JV could be assigned by the MCC to the DFC (which can legally have equity) or a US trust account and could also include subnational government or community ownership. The MCC would seed the JV with initial equity—perhaps $50 million of a $400-million compact—but subsequent rounds could be raised through capital market strategies.

The remaining compact funds would be reserved for the infrastructure necessary for resilient and cost-competitive supply chains—including transport and energy projects. In Zambia and the DRC, the biggest constraint to expanding copper production is the lack of energy resources. The Congolese mining sector faces an energy deficit of between 500 megawatts (MW) and 1,000 MW. All procurements related to energy and mining-sector investments will incorporate a preference for US companies (an automatic 20-percent bonus point allocation by the Technical Evaluation Panel). The MCC will actively market projects to US companies through public relations, marketing efforts, and regular roadshows, and will provide support US companies in due diligence and vetting potential local partners.

Launch MCC 2.0 as part of Trump’s first one hundred days

As Trump’s first one hundred days draw to a close, there is still time for action in regard to the MCC. Instead of shutting down the agency, the Trump administration should nominate a chief executive officer for the MCC without delay and, while confirmation is pending in the Senate, the administration should run the MCC through a beachhead team, as was done at the Eximbank since January. The MCC 2.0 model can be applied immediately to the DRC deal under consideration or to mining resource-rich countries familiar with the MCC, such as Zambia and Tanzania. The United States is working to turn around decades of policies that ceded strategic advantage in critical value chains to China. The MCC should be seen as a vital part of that effort.

About the author

Aubrey Hruby is a senior adviser and senior fellow at the Africa Center at the Atlantic Council and leads the center’s Critical Minerals Task Force.

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Illicit mineral supply chains fuel the DRC’s M23 insurgency

Clarkson Kamurai, Brad Handler, and Morgan Bazilian — Wed, 23 Apr 2025 19:46:26 +0000

The insurgency by M23 in the eastern Democratic Republic of the Congo (DRC) is the latest example of the damage that can be wrought by the illicit trade of mined materials. It also highlights the limitations of some developing economy governments to oversee mining, particularly when the deposits are easily accessible. As the United States considers a deal that would provide security to the DRC in exchange for access to its critical minerals, it is important to understand the level and nature of the commitment required to address the complex challenges related to critical mineral development in the country. Indeed, broader international engagement—from neighboring governments to commercial buyers—is likely needed to bolster the DRC’s capacity to manage its minerals.

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Conflict minerals and the M23 insurgency

The Great Lakes region of Africa, which straddles the DRC, Rwanda, Burundi, and Uganda, supplies 30 percent of the world’s coltan, a crucial mineral for high-end electronics. Other valuable minerals, such tin, tungsten, tantalite, and gold, are often mined alongside coltan in the region. Artisanal mining is common—while this provides livelihoods for many, it also gives rise to dangerous working conditions, child labor, and political conflict and instability.

Much of the region’s coltan is deemed a conflict mineral as mining areas are controlled by armed groups and organized crime. The DRC government lacks firm control of its territories, especially in the eastern provinces, and transportation infrastructure is underdeveloped. Because of these challenges, foreign companies often avoid direct mining in the DRC, instead purchasing minerals through middlemen.

The M23 rebel group, an ethnic Tutsi-led militia in the eastern DRC, is fighting the DRC national army and claims to protect Tutsi populations from Hutu militias. Its resurgence in 2022 is linked to frustrations over the government’s slow implementation of peace agreements and worsening security, although it is argued that M23 acts in service of Rwanda’s interests in the region’s minerals. The M23 insurgency is allegedly financed through the exploitation of coltan and other minerals, including reports that M23 fraudulently exported at least 150 metric tons of coltan (7-10 percent of DRC’s annual global supply) to Rwanda in 2024. Current estimates put this as high as 120 metric tons per month. The current involvement and role of Rwanda is evidenced by the presence of 4,000 Rwandan army personnel and heavy weaponry.

The ongoing insurgency has halted regular mining activities, leading to “command” mining in which rebels control operations. This is affecting production levels, worker safety, and regional investment. Conflict has placed all transport routes under rebel control, increasing costs and delays due to road closures and violence.

An important dynamic for global supply chains is that rebel groups like M23, along with other middlemen, foster the mixing of legal and illegal minerals. This effectively launders the illegally mined material, allowing its sale to parties that are mandated to buy ethically sourced product, such as US-based customers who must comply with the Dodd-Frank Act. These sales channel profits to armed groups while depriving the DRC of its rightful revenue. Rwanda is effectively complicit, as it does not charge taxes on mineral exports and allows imported goods to be reassigned as “Made in Rwanda” if they are transformed or processed within the country with a minimum 30 percent value addition.

DRC efforts to regain control

Amid the ongoing conflict in the eastern DRC, there is an intensified call for international accountability and economic reforms to address resource-driven violence. At the February 2025 United Nations (UN) Human Rights Council session, the International Chamber of Commerce and Development urged the UN to enhance transparency in raw material transfers from Rwanda to combat mineral exploitation crimes. Enhanced oversight, it argued, would hold resource looters accountable.

Additionally, at the Munich Security Conference, the DRC accused Rwanda of destabilizing the region to exploit its minerals and proposed measures to encourage legitimate investments and transparent contracts while urging the international community to facilitate peace.

The DRC, meanwhile, has classified certain mining sites in North and South Kivu provinces as “red” zones, halting mineral trading in these areas. The country is orchestrating legal and regulatory efforts, including installing ore tracking mechanisms to combat the illegal mineral trade, disrupt conflict financing, and align mining practices with international standards. The red zone classification is intended to last six months and includes independent audits to ensure responsible sourcing.

On the diplomatic and military front, a quid pro quo of mineral rights for security cooperation seems to be developing whereby the DRC is courting Western governments’ security assistance to thwart the Rwanda-backed incursion. Much of the international community is also demanding stricter standards for purchasing minerals ostensibly mined and processed in Rwanda. The DRC will need international support to implement measures for strict oversight of the region and, more fundamentally, addressing the sources of instability that fuel the conflict. On a positive note, in late March, a Qatar-brokered peace summit resulted in commitments by the leaders of the DRC and Rwanda to cease hostilities.

Next steps

Achieving lasting peace in the eastern DRC requires addressing the root causes of conflict, including ethnic tensions, political instability, and competition for mineral resources. It will not come quickly.

The DRC needs sustained dialogue with rebel groups and neighboring countries to reach a peace agreement and foster reconciliation among ethnic groups. It also needs to improve the capacity and legitimacy of institutions to manage resources, provide security, combat corruption, and enhance transparency.

Meanwhile, mineral buyers and the international community can help the DRC by enforcing ethical sourcing that follows regulations like the Dodd-Frank Act and OECD guidelines, supporting peace initiatives with diplomatic and financial aid, and providing humanitarian assistance to support displaced populations, rebuild communities, and enforce human rights laws.

The M23 insurgency is yet another reminder that the international community must support resource-rich countries in building the capacity to formalize mining and adhere to recognized principles for working and living conditions. The United States’ and others’ overtures to help provide security may be a good first step, but it only sets a foundation for much more work to be done.

Clarkson Kamurai is the critical minerals program manager at the Payne Institute and a PhD researcher in the minerals and energy economics program at the Colorado School of Mines. Kamurai has engineering experience in base and precious metal mining in sub-Saharan Africa and South America.

Brad Handler is the program director for the Payne Institute for Public Policy’s Energy Finance Lab. Previously, he was an equity research analyst in the oil and gas sector at investment banks including Credit Suisse and Jefferies.

Morgan Bazilian is the director of the Payne Institute for Public Policy at the Colorado School of Mines and a former lead energy specialist at the World Bank.

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Tariffs can help secure US critical mineral supply chains—if they’re done right

Reed Blakemore, Alexis Harmon — Fri, 18 Apr 2025 16:17:23 +0000

Critical minerals have officially entered the tariff spotlight. On Tuesday, US President Donald Trump signed an executive order launching an investigation under Section 232 of the Trade Expansion Act of 1962 to determine whether critical mineral imports impair US national security. The Commerce Department investigation will help determine whether and to what extent the Trump administration will levy tariffs on imports of critical minerals as part of its sweeping global tariff efforts.

The United States is over 50 percent import-reliant on forty of fifty designated critical minerals. With China dominating many mineral supply chains from extraction to processing to finished products, US policymakers have spent years trying and largely failing to effectively de-risk supply chains. US critical mineral suppliers face a complex set of challenges: volatile and opaque price signals, Chinese market manipulation through subsidies and dumping that undercut other projects, and the inherently higher costs of US projects due to stricter environmental and labor standards.

Now, the Commerce Department has 180 days to assess how imports create vulnerabilities in US critical mineral supply chains, investigate foreign market distortion, and strategize how to boost domestic processing. Tariffs could be highly effective tools in addressing these challenges—but optimal results require a scalpel, not a chainsaw.

After all, at the heart of the US critical minerals challenge lies project economics. The administration can streamline permitting processes and prioritize mining on federal land, but investment will still struggle to reach the levels needed for a robust domestic mining sector without increased market certainty. De-risked supply chains need massive capital investment, which only flows when investors can count on predictable returns, reliable and cost-competitive contracts for securing future inputs (intake) and outputs (offtake), and consistent federal support.

Mineral tariffs should be precise and predictable

As the government investigates how tariffs can strengthen domestic supply chains, strategic floor tariffs should be top of mind. Setting price floors through tariffs can directly counter Chinese market manipulation and boost producer confidence without reducing incentives to become increasingly cost-competitive.

Precision is critical in these complex and fragile markets. Blanket tariffs across all mineral and metal imports would distort markets and do more harm than good. For starters, the United States simply does not have domestic reserves of many minerals, and tariffs can’t change the composition of the earth’s crust. Even for minerals the United States has in abundance, building up mining and processing capacity is a lengthy process. Recent administration efforts to streamline processes will help, but it will still be years before they bear fruit—leaving the United States exposed as vulnerabilities deepen. Exemptions from blanket tariffs for key allies and free-trade partners would alleviate pressure, but for many minerals, robust alternatives to Chinese suppliers just don’t exist yet.

There are no tariff shortcuts here; hard work and long-term commitment to developing and growing supply chains are prerequisites for success. The question of investor confidence is key. Blanket tariffs exacerbate market volatility, which alone is enough to scare off capital. Instead, tariffs should be used with precision to provide more market transparency and predictability.

How floor tariffs can help de-risk rare earths

Floor tariffs are an ideal tool. Coordinated floor tariffs can diversify mining and processing among strategic partners by de-risking project development, unlocking critical private financing, helping sustain existing mines, and offering a clear signal to invest in new processing initiatives. Floor tariffs effectively function as a form of offtake support that largely pays for itself. Particularly volatile and opaque markets that would benefit most from other forms of offtake support are the best candidates here. The dramatic price swings for critical materials oversupplied by China have grabbed headlines—lithium collapsing 85 percent, nickel up 90 percent, and so on. Despite erratic prices, however, these markets have generally avoided a huge reduction in offtake demand due to their market maturity, sustained demand confidence, or strong US policy support.

Rare earths, however, have largely slipped between the cracks—and present a great opportunity for floor tariffs to have a huge impact. These seventeen elements are key to the permanent magnets, heat-resistant coatings, and other high-tech components that keep missiles precise and data centers humming. Since rare earths are often secured as byproducts of other mining activities, extraction and processing have particularly high upfront costs and long development timelines. With investor confidence low and demand signals unsteady due to manipulated prices, demand guarantees are key to catalyzing rare earths retrieval projects, while supply confidence is crucial to incentivizing new rare earths separation facilities.

Notably, the United States has one active rare earth mine in Mountain Pass, California—but it has historically sent its raw materials to China for processing since it could not process locally cost-competitively. The mine’s new owner, MP Materials, aims to ramp up production and send its outputs to a new refining and magnet facility in Texas that will supply General Motors. This is an important first step to reducing dependence on Chinese processors, which currently produce over 90 percent of the world’s refined rare earths—yet the Texas facility is only expected to produce in a year what China produces in a day at full capacity. With Chinese restrictions on rare earths and permanent magnets progressively tightening, it is crucial to give companies the confidence to help address this strategic vulnerability.

No quick fixes

While floor tariffs on rare earths can help secure one piece of the United States’ critical mineral supply chains, the Trump administration should adopt distinct mineral-by-mineral tariff strategies. Lumping all fifty critical minerals into a blanket tariff will likely do more harm to US industry than good. Thoughtful tariff policy needs to be part of a larger conversation about improving the United States’ understanding of relative criticality among the nearly fifty minerals Washington has designated as critical.

Moreover, tariffs cannot successfully improve US supply chain security without a comprehensive suite of supportive policies. Recent efforts to empower the International Development Finance Corporation and use the Export-Import Bank to secure global feedstocks for domestic processing are powerful steps toward US supply chain security, but even more ambitious actions are required. The Trump administration should introduce innovative financing mechanisms, invest in workforce development, and consider establishing a strategic resource reserve. These complementary tools can help tariffs work by ensuring market signals are backed by capital inputs and reliable demand.

Finally, the Trump administration cannot pursue this strategy in isolation. At a moment when partners, allies, and resource-rich nations are similarly eager to develop alternatives to China’s dominance over critical minerals, coordinated tariffs and vigorous supply chain diplomacy—such as crafting mineral deals and investing in mines and refining infrastructure abroad—can be a force-multiplier toward wider supply chain diversification. Not only would this help alleviate stress on minerals that the United States cannot produce affordably or in sufficient quantities, it could also help coordinate technology and knowledge transfer at a moment when allies are entering unfamiliar economic territory.

The turbulence surrounding recent tariff implementation should not scare policymakers away from this tool altogether. When implemented precisely and strategically—such as floor tariffs on rare earths—tariffs can be a powerful force for market stabilization and supply chain security. This Section 232 investigation provides an opportunity to address one of Washington’s most serious strategic vulnerabilities—and the United States can’t afford to squander it.

Reed Blakemore is the director of research and programs at the Atlantic Council Global Energy Center.

Alexis Harmon is an assistant director at the Global Energy Center.

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Central Asia’s geography inhibits a US critical minerals partnership

Haley Nelson and Natalia Storz — Tue, 15 Apr 2025 17:14:58 +0000

Recognizing the national security risks posed by China’s chokehold over critical mineral supply chains, the new Trump administration has issued an executive order that aims to increase domestic production. This and previous administrations have also courted alternative critical mineral suppliers to diversify US supply chains. Now, attention is also shifting to the five countries of Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan)—a resource-rich region with a wealth of minerals necessary for energy and defense technologies.

Through the C5+1 Critical Minerals Dialogue, the Group of Seven’s (G7’s) Partnership for Global Infrastructure and Investment (PGII), and bilateral memoranda of understanding signed with the region, the United States has begun to explore Central Asia’s untapped critical mineral wealth. However, the political ambition has not necessarily reflected the logistical difficulties inherent in Central Asia-originated supply chains.

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Central Asia’s untapped potential

Much has been written on Central Asia’s position as a “new frontier” in the global contest for critical minerals. The region has a wealth of lithium, copper, aluminum and uranium, although some reserves require further exploration as existing data was collected during the Soviet era.

But just because the region has critical minerals, does not mean the United States can easily access them. Taking a closer look at the region, infrastructure, governance, topography, and geopolitical complexities presents numerous challenges for US companies to navigate.

Regional energy grids are not well equipped to handle expanded mineral production. Mining is highly energy intensive, accounting for 69 percent of Kazakhstan’s industrial energy use. Central Asia’s power system already struggles to balance generation and distribution, suffering high transmission losses and frequent blackouts. To improve the grid and ensure that reliable power is supplied to mines and enrichment facilities, modern power plants and upgraded high-voltage transmission lines are needed, which would cost an estimated $25–49 billion.

Subpar resource governance is also impeding Central Asia’s mineral potential. The region is home to inconsistent tax regimes, lacks government transparency, and has a history of nationalizing or renegotiating contracts with foreign companies. Stronger regulatory protections are needed to ensure investor confidence.

Beyond these challenges, newcomers to this frontier market face deeply entrenched Chinese and Russian influence in regional supply chains. Soviet-era pipelines, highways, and railways initially pulled trade northward after the collapse of the Soviet Union. But, since 2013, China’s Belt and Road Initiative (BRI) has reoriented trade eastward through infrastructure projects like the China-Kyrgyzstan-Uzbekistan railway. Through partnerships with regional transit operators like Kazakhstan Railways (KTZ), and investments in locomotive production and Caspian ports, Beijing has bought out regional transit infrastructure and skewed the investment bidding process. US businesses may face challenges in securing contracts in a region where critical infrastructure is controlled by Chinese and Russian entities.

In the critical mineral sector, China holds the majority of mining permits in Kyrgyzstan and Tajikistan, Russia has monopolized regional uranium enrichment, and several Central Asian mining companies have been sanctioned by the United States for their close relationships with Russia. These geopolitical and regulatory barriers not only limit Western access to critical mineral resources, but also reinforce China and Russia’s control over the region’s strategic industries.

Moreover, the primary bottleneck in the critical minerals supply chain is processing, not mining. While Kazakhstan can refine copper, zinc, and lead, the region lacks processing capacity for energy minerals like lithium, uranium, nickel, and cobalt. Most of these raw metals end up in China or Russia for further enrichment.

Promises and pitfalls of the Middle Corridor

For Central Asia’s critical minerals to reach Western markets at scale, new export routes must be established; energy infrastructure issues must be addressed; mineral survey maps must be modernized; and local enrichment facilities must be developed.

Raw minerals can be shipped to processors in the West, but westward routes are largely underdeveloped. Because the region is surrounded by sanctioned and adversarial states—Afghanistan, China, Iran, and Russia—the Middle Corridor, a multimodal transport route that links Central Asia to Europe via the Caspian Sea and South Caucasus, is the only way to ensure secure, sanction-free export. However, due to regional infrastructure inefficiencies, checkered contractual practices, and rapidly developing environmental issues, Western investors have been slow to develop the route’s capacity.

Infrastructure issues have kept the route’s container capacity low, the shipping times unpredictable, delays frequent, and prices volatile. Caspian ports are restrained by low vessel capacity; there are significant, time-consuming “break-of-gauge” issues across Central Asian railways; and unaligned tariff regimes, cargo regulations, and customs procedures impede the flow of goods across borders.

While climate-driven water loss could see the Caspian’s shoreline lower by 21 meters by 2100, port capacity is expected to shrink further, and ports could be pushed back at least one kilometer from the shoreline, necessitating major redevelopment and causing billions of dollars in economic losses. Rising temperatures and the construction of dams along Russia’s Volga River, the Caspian’s main source of water, have seen the average sea level drop to its lowest point in 400 years, reducing cargo ship capacity by 20 percent. In the northeast Caspian, where waters are shallowest, ships leave ports before they are fully loaded to reduce ship depth. If waters decline further, northeast Caspian ports will likely be unusable. Desalination projects have been implemented by Kazakhstan, Azerbaijan, and Turkmenistan to slow the declining water levels of the Caspian. However, the energy-intensive desalination process has unintended negative impacts on marine life and water quality, and its ability to slow declining water levels has been highly debated. Therefore, the region needs investment in new forms of water-saving technologies, like atmospheric water harvesting, in order to prevent shrinkage that will eliminate the feasibility of the Middle Corridor.

Can this frontier be tamed?

In its current state, the Middle Corridor is incapable of accommodating the United States’ critical mineral needs. Its limited capacity and higher-than-average transit costs would offer little strategic benefit to US businesses while exposing investors to significant financial and geopolitical risks.

For investors to see the benefits of Central Asian critical mineral mining, improved transit routes are necessary; some studies have estimated €18.5 billion is required to ensure commercial viability. Transport costs remain high, delays create logistical uncertainty, and limited domestic processing forces reliance on neighboring markets. Without addressing these bottlenecks, the region’s potential as a critical mineral hub will remain constrained.

Unified tariffs and cargo regulations and the digitalization of regional transit could help to reduce delays along the Middle Corridor, helping to set the groundwork for additional infrastructure investments. Kazakhstan, Azerbaijan, and Georgia have already begun working towards a unified customs system after signing a trilateral union in 2023 to establish a jointly owned logistics company. However, with China Railway Container Transport Corporation (CRTC) joining the joint venture at the end of 2024, the corridor is beginning to look like another BRI project.

China’s formal involvement in the Middle Corridor Multimodal Joint Venture, its agreement with Kazakhstan to construct the Tacheng-Ayagoz railway line, and China’s construction and management of Georgia’s Anaklia deep-sea port underscore the importance of this route for China. Any increase in the route’s capacity will help increase the capacity of China’s westward exports. Investing billions into the westward export of Central Asia’s critical minerals will benefit Chinese transit and open more opportunities for the dumping of Chinese goods into Western markets.

Although the United States strategically benefits from engaging with Central Asia and offering an alternative partner, investing billions of dollars into regional transit routes may lead to negative unintended consequences. Not only does the route require massive infrastructure investments and significant regulatory improvements to benefit Western markets, but from a US national security perspective, investments will undoubtedly encourage westward Chinese transit.

The reality of a US-Central Asia critical mineral partnership

Quickly securing critical mineral partnerships is vital to US efforts to reduce dependence on China. However, the United States should be wary of unrealistic expectations for what Central Asia can provide. Regional infrastructure development is incomparable to any other region in the world. Central Asia is uniquely burdened by its encirclement between US-sanctioned countries. In the short and medium term, low export capacity, high transit costs, geopolitical volatility, and a high-risk investment environment significantly reduce the region’s commercial viability.

The United States should choose its battles wisely. Political will is not enough to move billions of dollars’ worth of minerals across oceans. Infrastructural, logistical, environmental, and legal complexities should guide decision-making. With the time-sensitive nature of US critical mineral needs, efforts should start closer to home with US-allied countries with established mineral export industries, like Canada or Chile. US supply chain efforts need to be driven by capacity, reliability, and economic viability, rather than political pipe dreams.

Haley Nelson is assistant director at the Atlantic Council Global Energy Center.

Natalia Storz is program assistant at the Atlantic Council Global Energy Center.

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Want to understand the US-China trade war? Start with soybeans and batteries.

Joseph Webster and Valentina Sader — Fri, 11 Apr 2025 15:06:18 +0000

The bottom has fallen out of US-China trade ties. The world’s two largest economies have imposed massive tariffs on each other that will sharply curtail trade between the two sides. While the disruption will undoubtedly have across-the-board effects on global supply chains, if it is sustained, two markets will be directly and immediately impacted: soybeans and lithium-ion storage batteries.

Though a major and sustained trade spat between Beijing and Washington would undoubtedly inflict major damage on the global economy, it could also provide limited, discrete opportunities for other actors. For example, Brazil could increase exports of soybeans to the People’s Republic of China, while Taiwan and South Korea could find it economically useful and politically convenient to ramp up purchases of US soybeans. Meanwhile, the US battery-storage sector faces profound uncertainty due to the tariffs, but it could emerge stronger over the long term.

Imposing large tariffs on China carries undeniable risks—and any decoupling of the two massive economies will bring pain, especially in the short term. Yet the crisis also presents opportunities to draw the United States and its allies and partners closer on discrete issues, even as broader, US-driven uncertainty continues to persist.

US-China trade is unbalanced

The US-China trade war doesn’t come from nowhere. Due to China’s export promotion policies, including subsidies, and the United States’ low savings rate, the bilateral goods trade deficit has exploded in recent years, peaking at $418 billion in 2018.

In order to reduce the bilateral goods trade deficit, the United States has imposed several waves of tariffs on Chinese exports. In response, China has, among other measures, targeted specific goods, such as soybeans, which are a major import it receives from the United States. China is betting that targeting soybeans will be a pain point for the White House: US soybean farmers are an important political constituency, about half of all their production is shipped abroad every year, and China is the largest single purchaser.

At the same time, China cutting its soybean imports from the United States could also present opportunities for other buyers and markets. Brazil, already China’s largest source of soybeans, could expand its exports. On the other side, the European Union, South Korea, and Taiwan could make politically useful and showy purchases of US soybeans as a way of trying to earn favor with the White House before or during their own negotiations on trade or other issues.

—Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. This article reflects his own personal opinions.

SPOTLIGHT ON BRAZIL

Trade tensions between the United States and China have the potential to drive economic opportunities for Brazil, given its status as a global agribusiness powerhouse and one of the world’s leading agricultural exporters. However, the current global and domestic outlook for Brazil is more complex—and perhaps less optimistic—than it might initially appear.

During the first Trump administration, rising trade tensions with China prompted Beijing to reduce its dependence on US agricultural imports, turning instead to alternative suppliers such as Brazil. Brazil is the world’s largest exporter of soybeans and has China as its top destination. The latest round of tariffs and renewed US-China friction could once again stimulate Chinese demand for Brazilian soybeans.

Yet today’s trade conflict appears broader in scope and potentially more consequential, even encompassing tariffs against Brazilian products—though these are currently under a ninety-day suspension. At the same time, Brazil’s domestic economic fundamentals are under pressure: the country’s weakened currency and elevated interest rates heighten its vulnerability to external shocks. In addition, sustained global trade tensions threaten to dampen overall economic activity, not just in Brazil but also in China—its largest trading partner. This might undermine Brazilian exports, even in sectors where demand has historically been strong.

In this context, Brazil must navigate a delicate balancing act. Overreliance on China risks geopolitical and economic exposure, while alienating the United States could strain key trade and diplomatic ties. With turbulent global markets and a perhaps more fragile domestic economy, Brazil’s ability to manage these relationships strategically will be critical to mitigating risk and seizing opportunity.

—Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil.

Storage battery markets

Just as the US-China trade war could curtail or even halt soybean trade, the US battery complex could face severe disruptions if the United States and China continue down the road of decoupling. China is, by far, the largest exporter of batteries to the United States, accounting for over 70 percent of the United States’ lithium-ion battery energy storage system imports in 2024. These batteries, a single module of which can be as big as a truck, store electricity from the grid (often solar) and discharge power during peak demand periods.

If 145 percent US tariffs on Chinese goods remain in place, Chinese-produced lithium-ion batteries may be priced out of the market, especially since South Korean-made batteries are highly competitive and face only a 10 percent tariff (as of April 10). Accordingly, US tariffs may see a reorientation of storage-battery supply chains, with fewer imports from China and more from treaty allies such as South Korea, Japan, and Canada.

Without commenting on the other disruptions of the trade war, the reshoring and friendshoring of battery supply chains would hold significant national security benefits. Advanced batteries are strategically important: in addition to commercial uses, they hold military applications for drones, electronic warfare systems, and submarines.

A drone view shows California’s largest battery storage facility, as it nears completion on a 43-acre site in Menifee, California, U.S., March 28, 2024. REUTERS/Mike Blake

But it won’t be easy to shift battery supply chains, at least not in the near term. US allies have limited spare capacity. The international battery workforce disproportionately consists of Chinese nationals. China controls critical parts of the supply chain, such as graphite. And new factories—built in the United States or in friendly countries—will take years to complete. Significantly, the United States has no domestic manufacturing capacity for lithium iron phosphate batteries, which are highly suitable for grid-scale storage. It will take time for supply chains to reorient themselves.

If the United States and China move forward with hard decoupling, the US battery-storage sector will face immediate pain. At the same time, higher tariffs on Chinese-made batteries would incentivize greater manufacturing capacity in the United States and its allies and friends. In order to compete with China, the United States should pair any tariffs on China with investments in research, development, and manufacturing for batteries and other dual-use, militarily relevant energy technologies.

—Joseph Webster

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Profitability and power: Fixing US critical minerals supply chains

Ashley Zumwalt-Forbes — Thu, 03 Apr 2025 17:00:14 +0000

The United States is not losing the global race for critical minerals because of a lack of resources—it is losing because it lacks a financial model that ensures profitability. Despite bipartisan recognition of the strategic importance of these materials, US policies have failed to make this industry economically viable.

Without a clear pathway to sustainable profits, taxpayer and private sector investments risk becoming financial sinkholes. If the United States wants to secure a resilient supply chain, it must create a financial framework that attracts and retains capital.

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The economics of critical minerals

A functional critical minerals supply chain requires three key stages: mining, midstream processing, and downstream manufacturing. China dominates all three, not because it has better resources, but because it has a better economic strategy.

Through state-backed subsidies, China shields its companies from market forces, allowing them to endure losses in pursuit of long-term control. Meanwhile, the United States expects each player—miners, processors, and manufacturers—to be independently profitable, creating higher costs, greater risk, and systemic fragility. If one link in the chain collapses, the entire system fails.

This fractured approach discourages private investment. Unlike large, transparent markets such as oil or copper, critical minerals markets are relatively small, opaque, and highly volatile. Many key minerals trade on spot markets dominated by China, which can manipulate prices at will. If China wants to eliminate competition, it simply floods the market, driving prices down and making Western projects financially unviable.

To break free from this cycle, the United States must focus not just on developing mines, but on ensuring that the entire supply chain is profitable and attractive to investors.

A market-based strategy to compete with China

The United States has the strongest capital markets in the world. Rather than defaulting to top-down industrial planning, Washington should treat private capital as a strategic asset. With the right risk-adjusted incentives, US capital markets can outcompete China’s state-directed model. To do so, the United States should focus on four pillars: targeted supply chain construction, pricing power, investment risk reduction, and policy stability.

1. Stand up integrated supply chains through strategic funds

To accelerate development, the United States should launch government-backed, private-sector-managed funds focused on building single, vertically integrated supply chains (for example, a supply chain for antimony or gallium). These funds should be designed with strict performance conditions: they receive incentives only if they successfully stand up an end-to-end supply chain. This structure ensures quasi-vertical integration and forces offtake agreements to be part of the business model from the outset.

2. Build pricing power by raising domestic commodity prices for sensitive materials

To reduce vulnerability to China’s market manipulation, the United States must break away from artificially depressed price structures. This can be achieved through two levers: (a) targeted tariffs on mineral imports that benefit from unfair subsidies and (b) tighter domestic sourcing requirements across clean energy and defense sectors. By raising the floor on US commodity prices, these policies would insulate domestic producers and make long-term investments more financially viable.

3. Reduce investment risk via demand guarantees and price floors

Price volatility and uncertain offtake remain top deterrents to private investment. The United States should implement mechanisms to stabilize both. This could include government-backed trading houses or public-private stockpiles that establish price floors for particularly vulnerable minerals. Long-term offtake agreements, brokered through private-sector consortia, would provide stable revenue streams that investors need.

4. Ensure long-term policy certainty

The most important determinant of private investment is confidence in the rules of the game. Critical minerals development is a multi-decade endeavor. If the United States wants capital markets to play a leading role, it must offer long-term policy stability. That means preserving existing tax credits, grants, and loan programs—not just as temporary stimulus but as enduring pillars of the investment environment.

Building a market, not a monopoly

China has not just secured mineral resources—it has built a financial system that allows it to manipulate markets and suppress competition. The United States must construct an alternative, leveraging free enterprise and innovation as strengths. Identifying deposits and opening mines, though critical, is not enough. Without a financial strategy that ensures profitability, the United States will remain dependent on China for the materials that power its economy and national security.

It’s time to stop treating critical minerals as just a resource problem—and start treating them as the economic battle they truly are. The solution lies not in more short-term government intervention, but in structuring a market that incentivizes investment, ensures financial viability, and ultimately secures the United States’ position as a leader in the critical minerals race.

Ashley Zumwalt-Forbes is a former US Department of Energy deputy director for batteries and critical minerals, co-founder and former president of Black Mountain Metals and Black Mountain Exploration, and co-founder and former senior advisor of Metals Acquisition Corp.

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Prioritizing access to critical minerals will require prioritizing Africa

Benjamin Mossberg — Thu, 27 Mar 2025 13:46:51 +0000

As any foreign policy practitioner in Washington will tell you, keeping Africa high on the list of priority issues is no small task.

But walking into Mining Indaba in South Africa earlier this year, the vibe was different. The eleven thousand attendees—representing governments, multilateral organizations, companies, civil society organizations, and nonprofits focused on mining—clearly see the urgency of focusing on Africa, in part because of the continent’s mineral deposits.

Trump’s second administration has made clear in its opening weeks that securing access to minerals is a top priority. Countries worldwide have taken notice: For example, Ukraine has agreed to sign a minerals deal with the United States to help with peace negotiations with Russia. African governments have moved US critical-minerals investment to the top of their foreign policy agendas, most clearly demonstrated by the Democratic Republic of the Congo’s offer to grant the United States exclusive access to its minerals in exchange for security assistance.

Seeing that the Trump administration is prioritizing securing access to minerals, it must also prioritize Africa. Making this case in Washington is quite complicated, as too often, issues regarding “Africa” or labeled “African” are muffled by issues perceived as higher priority to policymakers. However, securing access to these minerals is an urgent national security issue; the United States thus must view investments in African energy, minerals, and mining with similar importance.

It is clear that African governments and communities view the current scramble for Africa’s minerals with an appropriate amount of urgency. During the opening ceremony, South African Minister of Mineral Resources and Energy Gwede Mantashe said “Look around,” gesturing to the thousands of people on the trade show floor. “Everyone is looking at Africa!” As Kgosi Seatlholo, chairperson of the National House of Traditional and Khoi-San Leaders, said during the opening ceremony, “our communities know that Africa has what the world wants.”

Yet African governments can also do more to help push the continent higher on the US list of priorities. I, and others at the Atlantic Council’s Africa Center, hear regularly from African government officials that they must carefully navigate the need for access to mineral assets by heavily industrialized and developed economies and the need to finance their own government expenditures, including their own development plans. While African countries may seek to move higher up the value chain, away from solely extracting minerals and toward hosting projects to refine them, they should not wait to green-light projects in search of better deals or additional greenfield investments in extraction, refining, recycling, or other midstream operations. Meanwhile, African governments should take steps that attract more urgently needed investment: for example, reducing administrative and bureaucratic barriers for investors and considering subsidies for labor or key utilities at notoriously energy- and water-intensive mining sites. Such steps can get projects, which often have ten- to fifteen-year returns on investment, moving along quickly. They can also help future-proof projects.

Financial institutions also have a key role to play. From private equity and venture capital firms to hedge funds and banks, financial institutions are critical to unlocking the full potential of Africa’s massive mineral endowment and supplying the huge amount of minerals needed for the energy transition. Smart investments are critically needed in processing and manufacturing, training the next generation of mining engineers, and launching new technologies that provide more information for decision-making, mapping mineral deposits, and making mineral projects safer.

More can also be done to raise Africa higher on the list of priorities on the business side. The United States and other Western governments seeking access to Africa’s rich mineral deposits must do more to identify projects, facilitate transactions—including business matchmaking, if necessary—and provide risk guarantees or project insurance. As Washington continues to make significant reforms, policymakers should seize the moment to quickly advance minerals-related projects that help achieve US national economic security goals. As the administration continues to have discussions about agencies such as the US International Development Finance Corporation and the Export-Import Bank of the United States, and also about a potential US Sovereign Wealth Fund, Washington must use these tools to help the private sector reduce barriers to investment in Africa’s critical mineral projects. US government agencies should expedite the approval process to compete with foreign competitors, including China’s policy banks and commercial creditors.

To advance discussions about investment challenges in African critical-mineral projects and shape policies that support critical-minerals security for the United States and other Western countries, the Atlantic Council’s Africa Center launched its Critical Minerals Task Force at Mining Indaba 2024. The Task Force not only brings together the public and private sectors in conversation about the African mining space; it also analyzes models for mineral development and recommends policies to encourage investment. We strive to tailor our recommendations for African and Western governments to limit barriers to investment in the mining sector, reduce supply chain dependence on China, and encourage policy outcomes that support critical minerals security for the United States and other Western countries.

Africa’s mineral deposits are not just a resource but a strategic asset that can shape the future of security, energy, and economic development worldwide. For example, as upcoming Africa Center analysis will cover, Africa’s critical minerals play a role in US national defense. The United States has an expanding opportunity to further secure its future by prioritizing investment in Africa’s critical mineral sector; the Trump administration must take it.

Benjamin Mossberg is the deputy director of the Atlantic Council’s Africa Center.

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Four critical questions (and expert answers) about Trump’s new critical minerals executive order

Alexis Harmon, Reed Blakemore — Fri, 21 Mar 2025 23:07:11 +0000

Rock paper signed. Invoking emergency powers on Thursday, US President Donald Trump signed an executive order intended to increase critical mineral production. The White House noted that 70 percent of US imports of rare earths come from China, and the United States must secure more sources. But in the measures it announces to increase supplies, Trump’s order goes beyond these elements and compounds to include copper, uranium, potash, gold, and potentially even coal as critical. So, what does this order mean for mineral supply chains? Two of our top experts from the Atlantic Council Global Energy Center, Alexis Harmon and Reed Blakemore, dig into the details.

1. Why is the Trump administration focused on critical minerals?

Securing US critical mineral supply chains has been a priority for the Trump administration since day one. These roughly fifty minerals serve as the building blocks of many modern technologies—think fighter jets, semiconductors, electric vehicle batteries, and cell phones. With the United States deeply reliant on foreign sources for these crucial inputs, the administration sees boosting US mineral production as a victory on two fronts: It reduces national security risks tied to dependence on China, and it promotes job creation and economic prosperity by revitalizing domestic mining and processing industries.

2. How does the executive order approach securing US critical mineral supply chains?

Trump’s new executive order, “Immediate Measures to Increase American Mineral Production,” uses emergency powers to streamline permitting and ramp up investment through several important mechanisms.

Rapid permitting: Opening up new mines and processing facilities can take decades, and arduous permitting processes are often a major hurdle. Projects sometimes spend a decade languishing in permitting processes. In this order, agencies have been given just ten days to compile a list of pending mineral production projects that could be immediately approved, plus fifteen days to nominate potential candidates for FAST-41 status, which fast-tracks approvals. Although this would be extremely effective in speeding up project timelines, critics warn of serious environmental consequences.

Improved financing: The White House is using a variety of tools here, but most important are the Defense Production Act (DPA) and the International Development Finance Corporation (DFC). The DPA is a powerful industrial-policy tool, traditionally meant to direct production according to defense needs in wartime. By giving the DPA Section 303 authority to the Department of Defense and DFC, the government has the power to directly fund domestic mining and processing projects through subsidies, loans, loan guarantees, and supply contracts. The order also calls for all agencies with loan authorities to speed up approval processes, and it provides interesting new mechanisms for offtake support through the US Export-Import Bank and coordinated bidding processes.

Other things of note: The order also calls for federal lands to prioritize mining operations over all other activity, as well as the Small Business Administration to provide support to small businesses engaged in mineral production. It also calls for increased technical assistance to mining companies (although it’s unclear that the United States has the expertise needed) and improvements to waste management.

3. What’s noteworthy about this approach?

Several additional elements of the order are important to note.

Minerals mentioned: The new order explicitly calls uranium, copper, potash, and gold critical minerals, plus it gives the National Energy Dominance Council the authority to deem any material as a qualifying mineral affected by the order. A subsequent White House fact sheet mentions coal. Although critical mineral designations vary from agency to agency, these materials have not traditionally made the list. How investments will unfold remains to be seen, but the order unleashing financing and smoothing the regulatory path for coal production and gold mining speaks to how a broad definition of what makes a mineral “critical” will be a significant part of mining policy moving forward.

Domestic focus: The order is squarely focused on boosting US production and barely mentions projects abroad. Starting with bolstering US mining is on brand for the Trump administration and a necessary part of a broad-based approach to building a resilient supply chain. US mining has largely floundered due to price volatility and a lack of incentives for long-term investment. While policy is a critical tool to unlock domestic resources, the United States is not abundant in a considerable portion of the critical minerals needed for many important technologies, such as semiconductors, meaning international cooperation will still be integral to securing US critical mineral supply chains. The brief language saying that financing could be used for projects abroad hints that the administration knows this, even if it has not identified it as a major priority in the order.

DFC pivot: Centering the DFC as a main domestic investment tool is a remarkable flexing of executive power. The DFC was created to foster economic development in emerging markets by providing financing and technical support to foreign projects that serve US strategic interests—not finance domestic projects. However, its unique loan and investment authorities inarguably make it a clever candidate for quickly creating a domestic investment body that can boost mining in the United States. With DFC reauthorization on the horizon in October 2025, Congress will be forced to choose whether to codify this huge shift and give the DFC real teeth as a strategic investment tool both at home and abroad. Should the DFC be increasingly positioned as a tool to manage national wealth (note that the order calls to create a mineral production fund for the DFC to use) and supercharged with DPA authority, it may increasingly lay the groundwork for a possible full-fledged sovereign wealth fund.

Offtake support: Providing financing is important, but investment will only flow if companies are confident about the sustainability of their operations. Although the language is vague, the order does float possible offtake agreements at home and abroad. Such offtake agreements could make producers more willing to invest by establishing long-term contracts between a buyer and a seller that give producers confidence that their product will have a steady market at a fair price.

4. Will it be effective in achieving the administration’s goals?

The order is likely the first step of many. However, its success depends on whether investments—and mines and processing facilities—actually materialize. Many fear that in such an uncertain pricing environment, concessional financing won’t be enough to draw out broad private sector interest. Others highlight the United States’ inability to secure supply chains independently, since no authorities are powerful enough to change where mineral deposits are located.

Ultimately, robust supply chain diplomacy and close partnerships with allies and partners will be critical to US mineral security. Future executive orders must address this challenge, likely by also relying heavily on the DFC and other levers for commercial diplomacy to get strategic investments flowing. Notably, this isn’t the first time that a US administration has used DPA authority to try to boost critical mineral production in recent years. Trump tried it in 2020 to reduce dependence on Chinese rare earths, and the Biden administration followed suit in 2022 for electric vehicle minerals. Neither effort was particularly effective, though it’s worth noting that the long timelines for setting up mines and processing facilities make it hard to assess success too quickly. This points to a major limit to executive power here: Given the relatively short-term nature of four-year presidencies, companies remain hesitant to make multi-decade investments with uncertain returns. Just last week, Trump’s revocation of Biden-era DPA designations on green energy technology such as solar panels highlighted the instability of these support systems.

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In the scramble for Africa’s critical minerals, the West must not abandon the ESG agenda

Zainab Usman and Rama Yade — Fri, 21 Mar 2025 16:41:39 +0000

The race for minerals and metals crucial for the global energy transition is intensifying—and is increasing pressure on producing countries, including those in Africa.

The International Energy Agency expects between $180 billion and $220 billion to be invested in the mining of critical minerals between 2022 and 2030, with about 10 percent of this investment slated for Africa. Countries including the United States, Europe, China, South Korea, Saudi Arabia, the United Arab Emirates, and others are prioritizing supply-chain security with regard to the minerals and metals needed for the global energy transition and for defense industrial applications. The African continent is an important supplier of these commodities.

As this race for minerals and metals critical for the energy transition heats up amid a turbulent geopolitical environment, both companies and governments must not abandon environmental, social, and governance principles (ESG) with respect to Africa.

African countries are increasingly demanding that mining operations deliver more benefits for government revenues and local populations. Toward that aim, countries have adopted mining codes that assert national sovereignty over these minerals, implemented export bans on unprocessed minerals, and unveiled policy strategies to support domestic value-adding processes. In particular, African countries—including Ghana, Nigeria, Namibia, Botswana, Mali, Guinea, and Niger—are increasingly implementing policies of national preference in the mining sector, with the aim of increasing the share of local participation. Others, such as Tanzania, have banned the export of non-value-added minerals. In 2021, the Democratic Republic of the Congo (DRC) launched a review of the mining contracts signed by previous leadership with Chinese investors based on concerns that Chinese promises to build roads, hospitals, universities, and housing had not been fully realized.

However, significant portions of the mining industry are still unregulated. For example, the perspectives and interests of artisanal miners are not always fully captured in mining codes, which often have weak provisions on workers’ rights, equal working conditions, and wages.

International mining companies, per an EY survey, considered environmental, social, and governance (ESG) factors to be the top risk to their business in 2024. They placed ESG as a top risk ahead of capital constraints, conflict, or even cyberattacks.

Mining companies usually face risk (even in the West, but particularly in fragile contexts) due to long lead times, volatility in commodity prices, policy uncertainty, and security challenges. However, the global map of minerals that hold strategic importance shows that mining activities for these commodities usually take place in countries where ESG remains a challenge, such as China, Russia, the DRC, Peru, Zimbabwe, South Africa, Turkey, and India. For example, the DRC is home to about half of the world’s cobalt reserves; meanwhile, more than three-quarters of the world’s platinum reserves are located in South Africa. Many rare earths, including lithium, nickel, and cobalt, are refined in China. For countries that mine and export minerals, especially the ones in Africa, such activities have not generally translated into sustained economic growth and broader improvements in human well-being. Instead, host communities of mining projects have often had to deal with environmental pollution, health challenges, and stagnant incomes.

Corporations increasingly turned to impact investment, especially soon following the launches of the United Nations Millennium Development Goals in 2000 and the Sustainable Development Goals in 2015. And over time, governments, institutional investors, and asset managers have set up various systems through which companies report their impact on the environment and on societies. For example, the European Union’s Corporate Sustainability Reporting Directive requires companies to explain the impacts of their business strategies. In the United States, the Securities and Exchange Commission requires publicly listed companies to report climate-related information. Last year, the Global Reporting Initiative, founded in 1997 in order to promote standardized ESG reporting, launched a new mining-sector reporting standard.

But recently, the momentum for recognizing and adopting ESG principles at a global level has slowed down. Reports now abound of companies, investment banks, and other private-sector actors setting aside their ESG commitments in the face of economic recession or political instability. Some are discontinuing or disbanding their ESG divisions altogether. Governments too are abandoning commitments to social and environmental sustainability principles. While these are setbacks to the wider global ESG agenda, this is a worrying trend and could be detrimental if it were to extend deeply into the mining industry.

There have certainly been shifts in how stakeholders in the mining industry have approached ESG. According to the mining companies surveyed by EY last year, the three ESG risks to which investors paid the most attention were local community impact (64 percent), waste management (55 percent), and water stewardship (51 percent). In 2025, EY notes, miners have turned their focus more toward the environmental stewardship component of ESG, reporting that waste management (44 percent), water stewardship (31 percent), and climate change (31 percent) would attract the most scrutiny from investors. The category that includes local community impact dropped from the third top risk to the fifth. And it seems there was a deprioritization of the governance component of ESG among mining companies and leaders, which EY says raises “alarm bells.”

Nevertheless, there are mining companies bucking the trend in the sense that they still prioritize and recognize ESG; that is commendable. It will be important for them to continue to stay the course knowing how much work has gone into securing the social license to operate in difficult jurisdictions. The progress made over the past decades cannot be jettisoned. If mining companies resist the global trend that is turning away from ESG, they can even help nudge their home governments to commit more deeply to ESG principles.

To ensure that mistakes of the past are avoided, and Africa’s development is supported in this intensifying scramble for minerals critical to the energy transition, the West—both its governments and corporations—cannot afford to abandon ESG.

Zainab Usman is the director of the Africa Program at the Carnegie Endowment for International Peace.

Rama Yade is the senior director of the Atlantic Council’s Africa Center.

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If the international community wants to curb fossil fuel emissions, it must make Africa a serious clean energy offer

Neil Ford — Thu, 20 Mar 2025 14:17:26 +0000

As the climate crisis worsens, all countries must curb their greenhouse gas (GHG) emissions, including by reducing their reliance on fossil fuels.

But while all countries should contribute to the global effort, they shouldn’t cut their emissions by the same proportions. Each country’s burden should be determined by their per capita emissions—not on rates of change in emissions. And the world’s poorest countries, including many in Africa, have not contributed anywhere near as much to climate change as industrialized nations.

Africa, specifically, is responsible for only 3.7 percent of carbon emissions from the burning of fossil fuels. Its per capita emissions are far lower than any other region. In addition, the African continent needs more plentiful and reliable energy supplies to fuel its development, both economic (as reliable energy supports manufacturing) and human (as energy allows children to do their homework in the evenings and medicines to be stored).

Meanwhile, industrialized countries are moving ahead with fossil fuel projects: The United States is looking to raise domestic oil production, while China has moved forward with building 94.5 gigawatts of new coal-fired power plants. In contrast, South Africa—which has the biggest installed generating capacity in Africa—has a total installed capacity of just 63.4 gigawatts. The International Energy Agency warned in 2021 that global climate goals may be missed if new fossil fuel projects proceed.

Before the international community asks African countries to leave undeveloped fossil fuel resources in the ground, it must make them an offer of clean energy financing—one substantial enough to fund Africa’s current and future appetite for electricity. Doing so would not only help reduce GHG emissions: It would also support Africa’s electrification and development goals.

A just energy transition

Slow progress on increasing electrification rates is already being made in Africa. Just over half of all Africans now have access to electricity at home for the first time, while twelve countries, including the Democratic Republic of Congo, Kenya, and Nigeria, published detailed plans in January 2025 to connect more people to their respective grids. Population growth is driving up demand, which will be further boosted by the uptake of technologies such as electric vehicles in the future.

Amid this growing access to and demand for energy, the international community must offer clean energy financing to African countries and companies to convince them to forego fossil fuel development. Offering this financing now, as energy infrastructure is being constructed from scratch, would allow Africa to build infrastructure and supply chains meant for clean energy, instead of building them up for fossil fuels and having to adapt them later—at greater financial cost. It would have the added benefit of promoting economic development and higher living standards in Africa, which would dampen security threats and ease long-term migration pressures.

Some argue that Africa, for the sake of its development, should be allowed time to use fossil fuels such as gas, which is seen by some as a bridging fuel and thus part of the climate solution. However, emissions from gas-fired plants are at least half as high as those from coal, making gas a driver of climate change.

Additionally, financing is already difficult for some fossil fuel projects. Landlocked Botswana, for example, has 212 billion tons of coal that is largely undeveloped because large-scale mining would require exports. Proposed coal railways from Botswana to ports in either Namibia or Mozambique have failed to secure funding because of reticence among banks and financial institutions about financing coal projects. At the same time, Botswana has a generating capacity of only 892 megawatts and relies on electricity imports. New coal plants would be an obvious option, but here too financing is challenging. Clean energy such as solar offers a more fundable option.

Some projects are managing to secure financing—but only just. For example, the five-billion-dollar East African Crude Oil Pipeline project that will funnel oil from Uganda to the Tanzanian port of Tanga has attracted a great deal of criticism from environmental organizations and the European Union among others, with some calling on banks to rescind their financing. This seems unlikely given that construction began in late 2024. However, Ugandan efforts to secure financing for an oil refinery have thus far failed, pushing the government and UAE partner Alpha MBM Investments to try to fund it themselves. The project will ultimately contribute to climate change, but Kampala argues it must focus on economic development.

Some efforts are being made to offer countries clean energy investment in return for a reduction in fossil fuel development. For example, a group of Western countries has set up Just Energy Transition Partnerships (JETPs) to mobilize public and private finance for low-carbon projects in return for commitments on renewables or energy sector emissions. However, progress has been far too slow, with just four JETPs signed since 2021. Those four include partnerships with Indonesia ($20 billion), Senegal ($2.6 billion), South Africa ($11.6 billion), and Vietnam ($15.5 billion). Funding on this scale should be agreed with every developing country. According to the International Energy Agency, Africa needs investment of $200 billion a year by 2030 to achieve universal access to electricity and meet climate change pledges.

Challenging but possible

Many will argue that putting together such huge funding packages is impossible at the current time because of profound global economic and political instability and high sovereign debt levels after the COVID-19 crisis. Yet governments found the money for mitigation measures during the pandemic. For example, the United States spent $4.6 trillion; the United Kingdom spent between $387 billion and $512 billion. The required finance can be made available in times of real crisis—and climate change is a monumental crisis.

The real stumbling block is political will. Gaining political support for funding on this scale would be difficult at any time, but an ongoing uptick in nationalism and protectionism makes it even more challenging. The United States and European powers would have to participate, and other countries should too, including China, Japan, South Korea, and the Gulf states. And when governments seem hesitant about participating—for example, the Trump administration currently views overseas aid in a dim light—actors in the private sector, from corporations to philanthropists, can help.

Whether this plan is implemented by beefing up the JETP program or via a new vehicle, apportioning the money will be difficult. Many African countries have little or no hydrocarbons or coal. Thus, a continent-wide approach may be needed to ensure that the financing makes the desired impact, both in terms of boosting clean energy access and reducing fossil fuel development. Such an approach can include an agreement, possibly made through the African Union, although this could agitate those countries actually giving up their fossil fuel resources.

In addition to financing, technical support and skills transfer would also be needed. North American and European grid operators and bureaucracies are still struggling to keep up with the pace of complicated permit and grid interconnection applications from renewable energy developers. Such bottlenecks can derail development, so African governments need technical support, while international solar, wind, and storage operators could help build up the operations and maintenance expertise needed to ensure assets remain operational.

Africa has vast clean energy potential—it is home to 60 percent of the world’s best solar resources. However, the continent hosts just 1 percent of global solar generating capacity, about the same amount as the not-particularly-sunny country of Belgium. If the international community truly wants African countries to turn away from fossil fuel development, it will need to give those countries the financing to harness that clean energy potential. The big question is whether the international community is really serious about it.

Neil Ford is a freelance consultant and journalist on African affairs and the global energy sector. He produces reports for a wide range of organizations and has a PhD in East African development.

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Digging into the US-Ukraine minerals deal

Atlantic Council — Wed, 26 Feb 2025 15:58:40 +0000

GET UP TO SPEED

It’s a minerals deal that could prove critical. US and Ukrainian officials reportedly have reached an agreement to jointly develop and perhaps share revenue from Ukraine’s natural resources. While details are still emerging, US President Donald Trump told journalists that Ukrainian President Volodymyr Zelenskyy might visit Washington as soon as Friday to sign the pact. The news comes after the Trump administration applied intense pressure on Kyiv to provide “payback” for US support in defending Ukraine against Russia’s full-scale invasion. Why have Ukraine’s mineral reserves come to the foreground amid a burst of activity to end the war as it hits its three-year mark? How might the deal influence what comes next? Our experts unearth the answers.

TODAY’S EXPERT REACTION BROUGHT TO YOU BY

Reed Blakemore (@reed_blakemore): Director of research and programs at the Atlantic Council’s Global Energy Center
Olga Khakova (@OlgaKhakova): Deputy director for European energy security at the Atlantic Council’s Global Energy Center
John E. Herbst (@JohnEdHerbst): Senior director of the Atlantic Council’s Eurasia Center and former US ambassador to Ukraine

Belowground truth

First, the basics: There’s been a lot of buzz about Ukraine’s “rare earth” minerals, but the country does not in fact have large quantities of rare-earth elements. What it has instead is “significant reserves of titanium, graphite, and lithium, which are foundational resources for the US defense industry and wider high-tech economy,” Reed tells us, noting their use in everything from batteries to aircraft, tanks, and submarines.
But accessing these minerals, along with other reserves of aluminum and hydrocarbons, will hinge on the outcome of the ongoing war. “A significant portion of these resources, both active and underexplored, are in the eastern third of Ukraine,” where fighting has raged for the past several years, Reed explains.
This is a deal in which US and Ukrainian officials must accept some “strategic vagueness,” Olga observes, in part because the “bankability” of critical-minerals mining across the country is unknown. “The existing mineral maps are out of date” and have not been subjected to the “stress test” of bringing those minerals to market, which is “a very long, capital-intensive ordeal,” she adds.
And even after the minerals are out of the ground there will be additional obstacles to overcome. “China remains far and away the dominant market force in minerals refining and processing,” Reed says. “For a deal to really de-risk the US minerals supply chain, more infrastructure is likely needed to ensure that the newly acquired mineral ores don’t flow toward Beijing.” At this time, he adds, “the United States lacks the infrastructure to transport and refine these ores in Europe or North America at scale.”

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Road to reconstruction

John, who is currently in Kyiv, shares that there are significant geopolitical benefits to a deal: It “gives Trump one more reason to make good on his stated intention to broker a quick end to Russia’s war on Ukraine that ensures the sovereignty, economic viability, and security of Ukraine from future Kremlin aggression.”
Russia has been wielding its hydrocarbon resources and China its dominance in critical minerals for political ends, which has prompted the United States to seek “alternate supply of these resources,” says John. “Ukraine is able to help with this.”
Ukrainian leaders, for their part, are “pleased” that language in the original US draft agreement requiring Ukraine to pay the United States $500 billion has been removed, John relays, and “see the deal as a way to re-cement the relationship with the Trump administration after a rocky two weeks. While they wanted to link this deal to security guarantees from the US, they finally realized that this was a bridge too far.”
Ultimately, Olga argues, “having the United States intimately involved in the success of the fund [created by the agreement] and its profit is a win for Ukraine.” The country’s reconstruction needs are enormous, and this deal “could provide a roadmap for bringing large-scale Western investment into Ukraine.” New commercial mining also “could accelerate the build-out of multi-use infrastructure and transportation routes that could contribute to broader reconstruction efforts in the country.”

A minerals mess for Moscow

While Trump opposes sending US troops to Ukraine to maintain an eventual peace agreement, “the United States would still desire to protect these massive investments, perhaps through other means,” Olga tells us.
As John points out, the deal comes as Russian President Vladimir Putin “has been working overtime and with some success to divert Trump from moving quickly to negotiations. He wants to seize more Ukrainian territory and drive Ukrainian forces from Russian territory before starting negotiations.”
Moreover, John adds, Putin “would like to dissuade Trump from insisting on the deployment of European troops to Ukraine and sending major weapons to Ukraine to deter future aggression.”
But the minerals deal “puts a crimp into Putin’s plans,” John says, while reminding Trump of “what he said shortly after his inauguration: that the real impediment to a quick, durable peace is Putin.”

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On trade and technology, the US and EU need each other now more than ever

Trevor Rudolph — Sun, 19 Jan 2025 22:29:24 +0000

With President-elect Donald Trump set to take office, are challenging times ahead for relations between the United States and European Union (EU)? Some signs indicate they are. Trump’s campaign promises of up to 20 percent tariffs on all US-bound imports have raised concern and action in the EU, where wounds are still raw over the 2018 trade skirmish over steel and aluminum imports. EU leadership has already stated that it wants to work with Trump, but it has also reportedly drawn up potential lines of retaliation in the event of new tariffs. On Russia, the EU establishment spent the fall worrying about then-candidate Trump’s declaration that he would end the war in Ukraine within “twenty-four hours.” Trump has demonstrated skepticism of US support for Ukraine and Europeans wonder what a negotiated settlement might mean for Russia’s future war aims.

From the European perspective, these are legitimate causes of concern. But the United States and EU need each other now more than ever, particularly in the field of technology cooperation, where neither party can achieve its respective geopolitical objectives without a strong partnership. Recognition of this mutual need was the catalyst for the Biden administration’s push early in its term for the Trade and Technology Council (TTC)—a political-level, formal dialogue on technology issues with leaders from the United States and EU.

Whether Trump will ultimately decide to continue the TTC, aim to revamp it, or scrap the framework entirely, the format of cooperation on technology is less important than the cooperation itself. Continued collaboration between the two economies is paramount due to a combination of competition from nonmarket economies and a lack of capacity in three key geostrategic areas: telecommunications, semiconductor manufacturing, and critical minerals and raw materials. These areas are the basic building blocks of many of the products and services the United States and EU nations use across a variety of sectors, including for the operation of critical infrastructure, the manufacturing of medical devices, and numerous military applications. Thus, leadership in these sectors will define geopolitical outcomes for the next generation.

In telecommunications, US policymakers on both sides of the aisle understand the need to keep the global internet and Western networks free of Chinese surveillance and influence. After the United States placed bans on China-based telecommunications providers Huawei and ZTE, industry insiders and policymakers quickly recognized that the alternatives were mostly European. This led to the first Trump administration’s Clean Network initiative, which would never have gotten off the ground without European cooperation and companies. Nothing in the last four years has significantly changed this dynamic, which would suggest further transatlantic cooperation will be needed.

On semiconductor manufacturing, neither the United States nor EU alone have the capacity to replicate Taiwan’s semiconductor output anytime soon. Taiwanese companies produce more than 60 percent of the world’s semiconductors and over 90 percent of the most advanced ones. With both economies tying public funds to local chip manufacturing, continued collaboration will be needed to reduce foreign dependence on chip manufacturing and prevent unnecessary market distortion from zero-sum competition on chip manufacturing subsidies. The US Commerce Department has announced over thirty billion dollars in proposed CHIPS Act private sector investments, which it estimates could create more than 115,000 new jobs. The EU’s European Chips Act will see more than “€43 billion of policy-driven investment until 2030.” Fresh subsidies may indeed accelerate on-shoring trends, but a complete lack of cooperation regarding the types of semiconductors manufactured and their intended end use would be mutually destructive and is not in the interest of either the United States or EU.

Both the United States and EU have longstanding dependencies on China for critical minerals and raw materials, as well. Experts estimate that as much as 98 percent of the critical minerals used by the EU come directly from China, and this figure stands at nearly 60 percent for the United States. This overreliance is due to a range of local factors, such as mining and refining capacity, legal barriers to mining, and poor rates of return. Both governments have recently begun to de-risk with a trade pivot to Africa. As part of the Group of Seven’s (G7) Partnership for Global Infrastructure and Investment, it reached a 2023 agreement with the governments of Angola, Zambia, and the Democratic Republic of the Congo on further development of the Lobito Corridor, investing in local infrastructure in exchange for access to key resources. If this investment materializes, it could go a long way toward addressing the current dependence both the United States and EU have on China for critical minerals and raw materials while demonstrating an attractive alternative funding model to China’s Belt and Road Initiative.

In the coming months, the United States and EU must align on their mutual interests in bolstering technology cooperation and working together to compete with nonmarket economies. For this to happen, however, the EU will need to give flexibility and space to the Trump administration as it establishes its initial priorities. The EU will have to acknowledge differing transatlantic views in areas such as sustainability and green technology while negotiating hard on trade to demonstrate that mutually assured destruction does not benefit either party. A cooperative tone coupled with adept negotiations may very well stave off the possibility of blanket US tariffs against the EU. Such an outcome is in the strategic interests of both the United States and EU so that they can focus their attention where it is needed most.

Trevor Rudolph is the vice president for global digital policy and regulation at Schneider Electric where he directs the corporation’s technology policy and regulatory affairs strategy in North America, Europe, and Asia. His views are his own and do not necessarily reflect the positions of his employer.

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What to know about the Lobito Corridor—and how it may change how minerals move

Sarah Way — Fri, 20 Dec 2024 14:21:37 +0000

During his early December visit to Angola, US President Joe Biden pledged an additional $600 million to the Lobito Corridor project—an ambitious, US-backed infrastructure initiative linking the port of Lobito on Angola’s Atlantic coast to Zambia through the Democratic Republic of the Congo (DRC). This increased investment brings the United States’ commitment to the project to four billion dollars and the total investment by all key players to six billion dollars.

This pledge reflects the United States’ heightened focus on securing supply chains for critical minerals, resources that play a pivotal role in the development of technologies from electric vehicles to solar panels to defense systems.

But Biden’s visit to Angola also underscores a bigger shift for the United States: both in its engagement with African nations and in its approach to the geopolitical competition for critical minerals unfolding in Africa. The Lobito Corridor exemplifies an approach to US engagement with Africa that prioritizes collaborative and equitable partnerships over exploitative models.

A new engagement strategy with Africa

The Lobito Corridor project is the United States’ largest effort to counter China’s presence in Africa.

China went on a notable buying and investment spree—solidifying its footprint in Africa’s mining sector by the early 2000s, particularly in the Copperbelt region in Central Africa. China owns or has a stake in fifteen of the DRC’s nineteen cobalt mines and has also made substantial investments in lithium production in Zimbabwe, giving China a significant advantage in the production of batteries and renewable energy technologies. Since China launched the Belt and Road Initiative (BRI) in 2013, Beijing has established significant economic inroads in many African nations through investments in transportation, infrastructure, and energy.

While US interest in African mining slowed for decades, the United States is increasingly working with and investing in African countries to develop the continent’s vast mineral resources.

In 2022, the Biden administration and several partner countries, along with the European Commission, launched the Minerals Security Partnership (MSP). This partnership aims to develop sustainable, transparent, and secure supply chains for critical minerals, with an emphasis on environmental, social, and governance standards.

Then in May 2023, the Group of Seven’s (G7’s) Partnership for Global Infrastructure and Investment (PGII) took up the Lobito Corridor project; in September of that year, the United States and the European Union announced that they would be co-leading the project. The proposed rail project involves the construction of approximately 350 miles of new rail line in Zambia that will connect its northwest region to the southern part of the DRC. This line will ultimately link to track in Angola and grant Zambia access to the Atlantic Ocean. The project also entails constructing hundreds of miles of feeder roads along the corridor and renovating the 120-year-old Benguela railway.

When completed, the Lobito Corridor will provide greater access to the global market for these critical mineral-rich economies by expanding export possibilities, boosting regional trade, and reducing the time it takes to transport minerals and other goods. Its construction will advance the United States’ economic interests by unlocking investment opportunities, thereby creating avenues for US businesses to diversify supply chains, establish partnerships, and contribute to the economic diversification of the region—as well as offer African countries a more collaborative and transparent alternative to the BRI. Additionally, the corridor will help facilitate westward trade flows of critical minerals needed for the energy transition via the Atlantic, whereas previously many mineral exports have tended to flow eastward for export out of Tanzania’s Dar es Salaam port.

Overall, the United States’ increasing work with and investment in Africa, particularly through the Lobito Corridor and the MSP, demonstrates a US commitment to fostering infrastructure that supports shared economic growth and strives for more equitable access to resources.

Who is involved in this ambitious infrastructure project?

The PGII’s Lobito Corridor project stems from the Lobito Corridor Transit Transport Facilitation Agency Agreement, which was signed by the governments of Zambia, Angola, and the DRC in January 2023 to advance the growth of domestic and cross-border trade along the Lobito Corridor. Then solely a regional effort, its development has been bolstered by international cooperation with the United States, the European Commission, the African Development Bank (AfDB), and the Africa Finance Corporation (AFC).

In October 2023, the United States signed a memorandum of understanding (MOU) with Zambia, Angola, the DRC, and the European Commission to kickstart the project. The MOU named the AFC as the lead developer of the rail line, and the AfDB also signed on—contributing $500 million and committing to help raise $1.6 billion in additional financing.

In February 2024, more than 250 business and government leaders from the DRC, Angola, Zambia, the European Union, and the United States—together with international investors and industry leaders—convened at the PGII Lobito Corridor Private Sector Investor Forum in the Zambian capital of Lusaka. This forum highlighted the importance of public-private partnerships for the project. These kinds of partnerships have the potential to foster mutual prosperity for US investors and African economies. Additional funding commitments to the Lobito Corridor project were made at the gathering. Perhaps most notably, the US International Development Finance Corporation (DFC) announced a $250 million loan to the AFC to help support its efforts to develop and strengthen infrastructure across the African continent.

Most recently, at the 2024 United Nations Climate Change Conference (COP29) in Baku, Azerbaijan, in November, the DFC’s board approved a loan of up to $553 million to the Lobito Atlantic Railway in Angola for the upgrades and rehabilitation needed to help make the transport of critical minerals more reliable. The DFC also committed $3.4 million in technical assistance to Pensana—a rare-earths processing hub located in the United Kingdom—to explore the possibility of a rare-earth mine and refining facility in the Lobito Corridor.

The Lobito Corridor project today

Within eighteen months of the United States’ initial commitment in September 2023, PGII partners had already allocated more than three billion dollars to advancing the Lobito Corridor, including investments in diverse sectors such as clean energy, transportation and logistics, agriculture, healthcare, and digital infrastructure. By leveraging both public and private financing—and committing to anti-corruption, transparency, and good governance—the Lobito Corridor project is designed to create employment opportunities, facilitate regional and global trade, and spur investments in clean energy, as well as agriculture, digital connectivity, and food security.

This significant investment has already catalyzed additional developments. In September, the AFC signed concession agreements with Angola and Zambia to support the railway project. The AFC was also awarded two million dollars in grant funding by the US Trade and Development Agency to complete the preliminary environmental and social studies for the project and ensure that the Lobito railway aligns with environmental standards and international best practices. These agreements lay the foundation for the subsequent, more ambitious phases of the project centered around rail lines that connect Angola to the DRC and extend the corridor into Zambia.

A model for future investment in Africa

The Lobito Corridor project underscores a growing recognition of Africa’s pivotal role in the global energy transition and marks a notable shift in how the United States engages with the continent.

The new model offered by the Lobito Corridor’s funding structure—which relies on a mix of public-private partnerships, grants, and concessional financing—differs significantly from state-led investments in infrastructure through China’s BRI, which has often drawn criticism for saddling African nations with unsustainable debt through opaque and unaffordable loan agreements. The Lobito Corridor, by contrast, is designed to minimize financial risk to participating African nations.

But the opportunity to lean into this shift in how the United States works with Africa could be missed once the new US administration and Congress take office in January 2025. President-elect Donald Trump’s policy record would suggest a more transactional approach to critical minerals development and infrastructure investment, with less focus on multilateral cooperation. In contrast, the Biden administration has emphasized partnerships with African governments and international bodies. But there is a chance that Trump might pursue more bold infrastructure projects like the Lobito Corridor, albeit with a stronger emphasis on advancing the United States’ strategic priorities, in line with his heavy emphasis on “America first” policies and his transactional approach to trade relationships.

The Lobito Corridor’s success depends on several factors, chief among them equity in partnerships, transparency, and the outcomes of the broader geopolitical dynamics at play. But if effectively implemented, the project could demonstrate the possibility of successful development strategies that promote collaboration, sustainability, and mutually beneficial outcomes—and thus redefine how the United States and other international actors engage in Africa.

Sarah Way is a graduate of the University of Colorado Boulder’s International Affairs Program with a specialization in Africa and the Middle East. Her research centers on the intersection of natural resources and development, with a specific focus on extractive minerals in Africa.

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What African producers of critical minerals can learn from Indonesia’s experience

Bradford Simmons and Julien Marcilly — Thu, 19 Dec 2024 18:01:31 +0000

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This report was updated on January 31, 2025

With its success in nickel production, Indonesia has become a model for those seeking to harness “resource nationalism” for domestic benefit. Substantial foreign investment, particularly from China, has been a key variable for Indonesia to become a globally relevant industrial center for nickel processing. While there are insightful lessons that policymakers from mineral-resource-rich African countries can learn from Indonesia, there must be caution in implementing some of Indonesia’s policies, especially export bans as they have had mixed results and depend heavily on external factors.

Africa holds a third of the world’s mineral reserves, including critical minerals essential to the green energy transition. Yet, the continent remains underexplored, underdeveloped, and underfunded, receiving just 8–10% of global exploration and investment. Global demand for minerals like copper, nickel, cobalt, and lithium is expected to generate $16 trillion over the next 25 years, with sub-Saharan Africa potentially capturing $2 trillion. However, to realize this potential, Africa must shift from raw extraction to value-added processing. Developing local processing industries would boost economic diversification, job creation, tax revenues, and technological advancements while reducing dependency on raw-material exports.

To achieve this, African governments must prioritize coherent, forward-looking policies that emphasize value creation. Commissioning technoeconomic studies to identify key supply chain opportunities will help guide investments. Establishing Special Economic Zones for critical minerals can attract international investors and foster industrial hubs. Leveraging the African Continental Free Trade Area to create robust commodity markets would position Africa as a competitive player. Additionally, streamlining regulatory processes, supporting carbon-free power projects, and advancing infrastructure investments through global initiatives such as the US PGI and EU Global Gateway can facilitate critical mineral processing and transport networks.

Export bans, though well-intentioned, often backfire. Historically, they have reduced exports, weakened global trade positions, and worsened infrastructure challenges in energy, transportation, and logistics. Without effective governance and political stability, such policies risk stalling economic growth rather than stimulating it.

By focusing on industrial infrastructure, value-added processing, and policies that promote long-term diversification, African countries can move beyond the limitations of raw extraction. With transparent governance and strategic investments, the continent can transform its mineral wealth into a driver of sustainable economic development.

This report is the second in a series on the critical minerals sector in Africa, and is part of the Africa Center’s Critical Mineral Task Force.

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The US won’t gain a lead in the competition for Africa’s critical minerals without innovation

Chris Moorman — Tue, 26 Nov 2024 19:26:42 +0000

The competition for Africa’s critical minerals is intensifying. If the United States wants to differentiate itself from competitors—notably, China—it will need to lead with its values and form partnerships with African countries that are economically feasible, environmentally sustainable, and ethical (the values central to an “E3” model). The only way to do that is by driving innovation along the critical minerals supply chain, specifically in processing and refining.

The E3 model would offer the United States an advantage because of how starkly it contrasts with China’s method of partnership. China has been criticized for making usurious loans for infrastructure projects and demanding long-term commodity offtakes in the face of predictable defaults.

Despite China’s method of partnership, its offer of readily available, speedily deployed financing—for needed infrastructure and for to bolster foreign currency reserves—has appealed to African countries. Countries, including Chad, Angola, and the Republic of the Congo have formed such partnerships, fallen into deeper debt, and have over the past decade restructured their commodity-backed loans to China.

A key component of China’s model is its exploitation of the continent, which is well documented. With China’s practices—from low wages and unpaid overtime to unsafe working conditions to a lack of formal employment contracts—African workers find themselves without recourse, and debt traps reduce national autonomy. An E3 model, focused on value creation and equitable distribution of revenues, offers an alternative to neo-serfdom.

China’s rise—and the United States’ fall

Through its deals, China has managed to gain control over 60 percent of the mining and 85 percent of the processing of rare earths—an important subset of critical minerals used in technologies such as magnets and batteries.

China’s dominance of global rare earths has been achieved by design. In 1987, then Chinese leader Deng Xiaoping announced to the world that “the Middle East has oil, but China has rare earths,” a reflection of China’s early understanding that the coming boom in the electrified economy would open up the opportunity to gain leverage and control within a then nascent market.

Then in the 1990s, Chinese state-owned firms started going on a buying spree globally, across rare earth elements and critical minerals more broadly. By 2022, Chinese firms had a stake in or owned fifteen of nineteen cobalt mines in the Democratic Republic of the Congo (DRC), which produces over 70 percent of the world’s cobalt. In one notable deal—signed in 2007—China pledged roughly three billion dollars to infrastructure development and, in exchange, secured mining rights for Chinese firms, giving them access to deposits valued at $93 billion in the DRC’s south.

As this buying spree unfolded, US involvement in the mining and processing of critical minerals declined—most substantially seen in rare earths. For example, the Mountain Pass rare-earth mine in California (formerly the producer of a majority of global rare earths) closed in 2002 after a toxic waste spill, leading to a large decline in the share of US rare-earth processing that has not been recovered. In 1995, General Motors sold Indiana-based neo magnet producer Magnequench to several entities including two Chinese firms. The plant eventually closed, making the United States more dependent on importing magnets for use in technology and defense tools. And over the mid-1990s, the US National Defense Stockpile sold off most of its stockpiles of rare earths, and its funds were reallocated to other defense priorities over several National Defense Authorization Acts. Altogether, these events effectively extinguished the United States’ rare-earth element business. Meanwhile China, in less than ten years, built more than one hundred permanent magnet manufacturers by 2007.

The loss of share in the rare-earths market shows how the United States must use targeted and precise policies to form partnerships—focused on rare earths but also critical minerals more broadly—with countries on the African continent, which is home to 30 percent of the world’s known critical minerals.

In forming these partnerships, the United States should harness innovations—and their economic, sustainability, and ethical advantages—to push forward a different model of partnership than China’s, with a focus on long-term strategic value creation.

Innovation for impact

In working together on critical minerals, deploying innovations can help ensure that African countries benefit from critical-minerals partnerships just as much as the United States does. Deploying refining capabilities to the continent can both drive down costs (economic and environmental) while affording the United States multiple sources of these critical minerals for a domestic manufacturing base. Doing so can also help align the continent, which has the world’s youngest population, with the rules-based international order.

Innovative practices in the recovery and refining of critical minerals include chromatography (which my company, ReElement Technologies, specializes in), a refining process in which minerals are separated and purified, requiring fewer chemicals and generating less waste. But there are also other technologies that show the United States’ capacity for innovating in this space: For example, there are electrochemical processes that can extract lithium from saltwater brines, using assets left over from oil and gas production. Ion-exchange-based technologies similarly extract lithium from brines with less impact on the environment. There are also emerging modeling systems using gravity and magnetic data processing as well as artificial intelligence to expedite the discovery of critical minerals. By harnessing technological innovation in African critical-minerals projects, the United States can reduce the inputs needed to power the modern economy, limit the impact of production on the environment, and make projects more cost efficient.

Africa on board?

A rising generation of African leaders is looking warily upon current partnerships, with some countries restricting the export of raw minerals and asking that firms invest in domestic value-added processing. For example, Zimbabwe (in 2022) and Namibia (in 2023) placed bans on exports of raw critical minerals. By promoting the E3 model, policymakers must assist with financing, political risk insurance, and free trade agreements, but private enterprise must lead in developing frameworks that are both economically viable and mutually beneficial.

There is a golden opportunity for the United States to reach out with an innovation-based approach. Sustainable trade beats occasional aid every time.

Chris Moorman is the chief commercial officer of the ReElement Technologies Corporation.

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The strategies driving the players in competition for Africa’s critical minerals

Sarah Way — Mon, 09 Sep 2024 14:14:27 +0000

There is a renewed international interest in Africa, specifically for the continent’s critical minerals, which are essential components of modern tools, from consumer electronics to defense technologies.

The global demand for critical minerals is only expected to increase in the coming years: The International Energy Agency predicts that by 2050, the demand for nickel will double, demand for cobalt will triple, and demand for lithium will rise tenfold as the shift toward low-carbon technologies (which use critical minerals) continues.

As the world sets its sights on Africa’s minerals, the competition for access is getting tougher, putting into question future access to these critical minerals. Multiple parties are actively laying claim to certain minerals and building supply chains to ensure their access—perhaps at the expense of the United States’ interests.

The power players

China is by far the largest player in the African mining sector, having secured advantageous supply chains for cobalt, graphite, magnesium, and other critical minerals. China has been closely involved in the extraction, refining, and production of these minerals for decades, as a result of efforts such as its massive Belt and Road Initiative. China currently controls 60 percent of global critical mineral production and 85 percent of processing capacity. Between 2003 and 2020, Chinese foreign direct investment in African minerals increased from $75 million to $4.2 billion. To date, China has established strategic partnerships with at least forty-four African countries. China has not, however, pursued multilateral alliances with other international partners, choosing instead to focus on renovating its state-owned enterprises.

Russia’s economic presence in Africa is not as vast as China’s, although Russian enterprises have engaged in projects that—while not massive in investment scale—carry significant strategic and political weight. Russian companies are aggressively increasing energy and mineral concessions in Africa, with significant stakes in ventures such as South Africa’s fourth-largest manganese miner, United Manganese of Kalahari. In Namibia, Russia’s Uranium One group secured eight uranium exploration licenses but has, in recent years, faced hurdles with securing permits that allow it to continue with uranium exploration.

Russia has also been expanding its influence across the continent through a state-funded military company called the Wagner Group (which the Russian Ministry of Defense reportedly recently took control of and lumped under a bigger group called the Africa Corps). In addition to expanding Russia’s influence, these mercenaries have secured lucrative mining deals. While those deals have primarily centered around gold, some experts are concerned about what such dealmaking means for the West’s access to critical minerals. These fighters capitalize on instability and supporting governments in times of conflict; in return, they benefit from increased access to natural resources and special diplomatic status. Russia, like China, has not positioned itself as a leader in major multilateral agreements, opting instead to maintain bilateral relationships with African nations that support its domestic industrial needs.

Whereas China made it a priority to corner the market for critical minerals two decades ago, the West (including the United States) was much later to the game and, therefore, has a comparatively weaker foothold in the sector. Western businesses have been hesitant to invest in African mining due to the many challenges associated with Africa’s natural-resource industries. Many countries rich in critical minerals struggle with weak governance, and this—combined with poor labor practices, environmental degradation, and the potential of fueling armed conflict—makes for a high-risk, unpredictable, and often unappealing investment environment. Despite these challenges, the potential rewards from securing a stable and diversified supply of these essential resources are growing, increasing international interest and investment in African mining.

The team players

While the gravity of Chinese and Russian activities around African minerals cannot be understated, the landscape of international involvement is much broader than these two giants. Several other countries are taking part in this strategic race. Notably, South Korea, Australia, Canada, and the United Kingdom are involved, not only in agreements with African countries but also in frameworks or partnerships with each other, sharing commitments that aim to enhance cooperation, ensure the use of sustainable and ethical mining practices, and secure stable supply chains for critical minerals. These countries are drawn to African minerals for their own national interests, and many also see the need to counterbalance Chinese and Russian efforts through the creation of partnerships with African countries and other partner countries interested in cooperation.

Canada is significantly involved in critical minerals in Africa, investing heavily in exploration and development projects, focusing on minerals such as cobalt, copper, and lithium. According to Canadian government data, the country has $37 billion worth of assets in African mining, with recent increases in assets in the Democratic Republic of Congo (DRC), Mali, South Africa, Tanzania, and Zambia.

Australia also has an extensive and growing presence, with over 145 Australian Securities Exchange-listed mining companies operating just under five hundred mines across thirty-four countries. Many current operations surround gold reserves in West Africa, but several companies are beginning to explore the continent’s graphite, manganese, and uranium reserves. Much of Australia’s recent focus has been on Tanzania, with Australian companies having claimed more than 9 0 percent of the new exploration licenses offered by the critical-mineral hotspot in the last two years. In addition to Australia’s significant economic presence in Africa, there has been a renewed emphasis on strengthening diplomatic ties. In December 2022, Australia’s assistant foreign minister visited Ghana, South Africa, and Morocco, marking the first visit by an Australian foreign affairs ministerial representative to the continent in six years.

The United Kingdom is similarly expanding its partnerships, with an eye on promoting responsible exploration, development, production, and processing of critical minerals. In November 2022, the United Kingdom and South Africa agreed to a working partnership on minerals for clean energy technologies, and they have also agreed to hold a regular ministerial dialogue on critical minerals. Eager to diversify its supply chain, the United Kingdom has recently turned to Zambia, a major producer of copper, cobalt, manganese, and nickel. The two nations entered into the Green Growth Compact, aimed at generating over $3.2 billion of British private-sector investment in Zambia’s mining, minerals, and renewable energy sectors, with an additional $650 million of government-backed investments. Beyond forming partnerships with African countries, the United Kingdom is also pursuing partnerships with other nations looking to invest in minerals and curb Chinese influence in Africa. In September 2023, the United Kingdom and Japan established a framework to jointly invest in African mine development and to stabilize their mineral supply chains. Diversifying sources of critical minerals is especially important for Japan, which has become increasingly dependent on China for its minerals for the production of electric vehicle batteries and clean energy.

South Korea has significantly ramped up its efforts to establish a robust presence in the mining sector, focusing on securing raw minerals essential for its electronic and automotive industries. In June 2024, the South Korean government held its first summit with Africa, which took place in Seoul and Ilsan. The summit—attended by more than thirty African heads of state—sought to directly develop stronger ties with countries that are increasingly seen as vital for South Korea’s production of semiconductors, solar panels, and electric vehicle batteries. The countries meeting at the summit launched a Korea-Africa Critical Minerals Dialogue, and South Korea committed to expanding official development assistance to African countries. South Korean companies pledged $57.9 million in various commitments, and forty-seven agreements and memorandums of understanding were cemented—including two on critical minerals cooperation with Madagascar and Tanzania. South Korea also pledged to donate ten billion dollars in foreign aid to Africa by 2030 and a further fourteen billion dollars in export credits to South Korean firms wanting to enter African markets. Lastly, while not directly focused on critical minerals, Seoul signed a $2.5 billion concessional loan agreement with Tanzania and solidified a similar billion-dollar deal with Ethiopia, both intended to fund significant health and infrastructure upgrades, signifying South Korea’s intensifying interest in working with African countries.

What sets these countries apart in the critical-mineral competition is that they are engaging simultaneously in international collaborative efforts. Recognizing that no single country can address these challenges alone, these countries have come together with others to form international initiatives and agreements to promote sustainable and ethical mining practices and secure stable supply chains.

In 2022, Australia, Canada, Finland, France, Germany, Japan, South Korea, Norway, Sweden, the United Kingdom, the United States, and the European Commission came together to form the Minerals Security Partnership to create diversified and responsible supply chains and catalyze public and private investment in critical minerals. Another agreement to come out of 2022 was the Sustainable Critical Minerals Alliance—established by Australia, Canada, France, Germany, Japan, the United Kingdom, and the United States—which promotes ethical, environmentally sustainable, and socially responsible sourcing of critical minerals.

These multilateral initiatives play a pivotal role in the global race for Africa’s critical minerals. They promote high standards in mining initiatives, enhance supply chain security, support international dialogue, and facilitate knowledge and resource sharing. By promoting investment diversification, high governance standards, and geopolitical alliances, these initiatives also offer African nations sustainable and equitable alternatives to the often-exploitative practices of China and Russia. They contribute to a more balanced and fair global competition for Africa’s critical minerals, ensuring that the benefits of these resources are more widely and fairly distributed to the people in the countries producing critical minerals.

The lone wolves

Other countries are pursuing critical minerals in Africa but are doing so more independently. India, the United Arab Emirates (UAE), and Saudi Arabia, in particular, are focusing on securing critical minerals through bilateral agreements and direct investments, often outside of broader international frameworks.

Saudi Arabia and the UAE have both expanded their presence in Africa’s critical-mineral industry, with the UAE leading the charge. The UAE has made significant investments in Africa’s mining sector as it seeks to diversify its economic portfolio and keep pace with the shift to low-carbon energy. Emirati foreign direct investment has been primarily directed toward copper-rich Zambia and the DRC. The UAE has also been deepening its economic ties with Angola since 2021, as Angola is thought to have sizeable unexplored reserves of critical and rare-earth minerals, such as copper, cobalt, manganese, and lithium, which are all essential to the UAE’s tech and renewable-energy ambitions.

According to the Arab Gulf States Institute in Washington, Saudi Arabia has been actively pursuing critical-mineral deals in Africa over the past year and has pledged to invest ten billion dollars in African mining projects over the next five years. Saudi Arabia ‘s interest in Africa’s critical minerals has increased in recent years, especially as it tries to meet the goals of its Vision 2030 economic diversification plan, although it hasn’t yet disclosed any direct and formal deals. In January, Saudi Arabia signed memorandums of understanding for mining investments with the DRC, Egypt, and Morocco. It has demonstrated interest in bauxite mining in Guinea as well.

India is also ramping up its engagement in the African mining sector through direct investments and partnerships with African countries. India is focused on securing essential minerals to support its rapidly growing manufacturing and technology sectors, aligning with its broader strategic goal to counterbalance the dominant position of China. India’s Ministry of Mines said that New Delhi was in discussions with the DRC, Côte d’Ivoire, Malawi, Madagascar, South Africa, Mali, Morocco, Tanzania, Mozambique, Zambia, and Zimbabwe to secure mining collaborations and access agreements. India currently has memorandums of understanding with six of those countries, through which it aims to secure supplies of cobalt, nickel, graphite, diamonds, platinum, and uranium.

The UAE, Saudi Arabia, and India, however, are not part of multilateral frameworks that promote collaborative, standardized, and sustainability-focused mining practices, such as the Minerals Security Partnership or the Sustainable Critical Minerals Alliance.

How the United States should navigate this race

Despite many significant challenges, establishing a secure and stable supply chain for critical minerals is crucial to the United States’ security interests and economic future, and Africa remains a necessary component of that strategy. The United States must capitalize on the growing international interest in Africa’s critical minerals and strengthen partnerships with other collaborating countries (such as through multilateral frameworks) that might help counterbalance China and Russia’s influence, secure access to minerals for the United States, and ensure that African countries can reap the benefits of their own mineral wealth.

It would be wise to strengthen multilateral frameworks such as the Minerals Security Partnership or the Sustainable Critical Minerals Alliance, as they provide an already-established mechanism for international cooperation and bring together diverse groups of countries committed to sustainable and ethical mining practices. The United States can do so by extending membership to other countries including mineral-rich African nations, which would enhance global cooperation, further promote shared sustainability and transparency standards, and help facilitate the transfer of necessary technical and financial support. This increased participation would not only regulate standards across borders but also create a more transparent and predictable investment environment. And the shared standards and accountability mechanisms established through these multilateral frameworks would make conditions more attractive for private-sector investors too, ultimately boosting financial support for critical-mineral projects that are both economically viable and socially responsible.

As the race for Africa’s critical minerals continues, the United States should rally its allies and partners around a common vision backed by democratic values.

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The US government should build a Resilient Resource Reserve for wartime and peacetime

Gregory Wischer and Morgan Bazilian — Thu, 29 Aug 2024 19:35:44 +0000

In December 2023, the US House Select Committee on the Chinese Communist Party called for creating a Resilient Resource Reserve, which would “insulate American producers from price volatility and [China’s] weaponization of its dominance in critical mineral supply chains.” The committee recommended targeting minerals “with high volatility, low US domestic production volume, and [Chinese] import dependence,” such as cobalt, graphite, and rare earth elements, but it did not specify what the reserve mechanism would be—a physical stockpile, a financial reserve, or something else.

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If Congress proceeds—as it should—with creating a Resilient Resource Reserve, it should establish a physical stockpile that can meet the critical mineral demands of the US military in a major conflict, as well as influence domestic mineral prices to incentivize expanded US mineral production. This critical minerals reserve would differ from the Strategic Petroleum Reserve as it would directly use stockpile purchases to incentivize domestic production, and it would differ from the National Defense Stockpile as it would explicitly use stockpile purchases to influence domestic mineral prices.

Specifically, supplying the military means stockpiling the strategic minerals necessary to wage a large-scale and high-intensity conventional conflict with China for five years. For incentivizing mineral production, the US government should buy domestically produced minerals to establish price floors that would keep existing US mineral producers operational and incentivize investment in additional US mineral projects. By the same token, it could also sell minerals amid high prices to ensure supply access and create price ceilings that keep manufacturers in defense and other important sectors operational.

Historic precedent, contemporary shortcomings

Washington used to maintain robust mineral stockpiles. During the first decade of the Cold War, the US government stockpiled enough minerals to cover a five-year conflict with the Soviet Union. By 1962 this meant a reserve worth over $77 billion adjusted for current prices. This stockpile was housed at over two hundred locations, ranging from military depots to commercial warehouses, and it contained large-volume minerals like aluminum, copper, lead, and acid-grade fluorspar—some of the most commonly used minerals by the Department of Defense.

Today, the existing National Defense Stockpile is insufficient for supporting the US military in a major conflict. The stockpile targets enough inventories for just a one-year conflict with China, followed by a three-year recovery. Even so, the present reserve—which is worth only $912.3 million and stored at just six locations—meets less than half of the military’s estimated demand in this scenario. It also lacks any inventories of critical aluminum, copper, lead, and acid-grade fluorspar. Furthermore, the stockpile is meant only to be used during a national emergency, and it is not leveraged to incentivize domestic mineral production.

The China model

By contrast, China’s stockpile provides minerals to key sectors during national emergencies and influences mineral prices to support domestic producers and consumers. Illustrating its price influence, in 2016, China purchased copper at depressed prices from domestic smelters to keep them operational. Conversely, to address strategic supply concerns during the COVID-19 pandemic, China stockpiled copper at elevated prices. Again displaying its price influence, in 2021, China released copper from the stockpile to shield manufacturers in key sectors like the power grid from high prices—a far lower threshold than a national emergency.

The proposed Resilient Resource Reserve should operate similarly to China’s mineral stockpile. The first priority should be to stockpile sufficient reserves to fulfill military demand in a major five-year war with China. This includes, first and foremost, minerals needed to manufacture platforms and munitions that would be critical to winning a US-China conflict, including excess volumes for those minerals not mined in the United States or sourced from vulnerable East Asian countries like Japan and South Korea.

Building a stockpile to meet the challenge

In coordination with partners and allies, the US government should acquire these military-related minerals with urgency, given the serious consequences of shortages should a conflict arise before stockpile targets are met. That means purchasing domestic minerals if they exist in the necessary form, but also sourcing minerals quickly from overseas, including from China and Chinese companies abroad. This would not be unusual—during the Cold War, the US government purchased minerals for its stockpile from the Soviet Union. Similarly, China currently stockpiles much of its copper through imports due to its limited domestic production.

After securing a baseline level of strategic inventories, the US government’s second priority should be to purchase and sell additional minerals to favorably influence mineral prices for domestic industries. When prices are low and risk curtailing domestic mineral production, the government should purchase minerals for the Resilient Resource Reserve to boost demand. When prices are high and risk disrupting downstream manufacturing, the government should sell stockpiled minerals to the defense industrial base and other critical sectors.

Pulling the levers of the market

Both the purchase floor and sell ceiling should be above current prices to protect existing mines and incentivize further mine development. In 1957, the US government stockpiled chromium ore at $100 per ton when global prices hovered around $50 per ton. US mineral projects generally have higher capital and operating expenses than those in other countries and thus require higher prices to remain operational.

When prices are low, the US government should purchase minerals from domestic producers at fixed prices to set price floors. In one cautionary example, the final construction of the only US primary cobalt mine in Idaho was halted when oversupply caused by Chinese companies depressed prices and rendered the operation unprofitable. However, if the US government were to purchase high-purity cobalt from domestic producers at $25 per pound, this price floor could support existing projects and incentivize new mines and refineries.

Conversely, when prices are high, the US government could sell minerals at lower fixed prices to key sectors, setting price ceilings. For instance, Russia’s invasion of Ukraine caused cobalt prices to exceed $40 per pound by April 2022. The US government could protect against future volatility by selling stockpiled cobalt to the defense industrial base at $40 per pound. When releasing from the stockpile, the US government should prioritize selling minerals to manufacturers of platforms and munitions important in a US-China conflict.

A reserve made in America

Because one of the core aims of the Resilient Resource Reserve is to expand US mineral production, Washington should procure domestic minerals for its non-military mineral inventories. This approach has precedent. Early in the Cold War, the United States sought to protect and expand domestic mineral production through stockpiling. Under Title III of the Defense Production Act, the US government guaranteed that it would buy certain minerals from domestic producers at fixed prices—for example, it promised to buy domestic copper mines’ expanded production at $0.245 per pound. It took similar action with aluminum, causing US production to double from about 720,000 tons in 1950 to nearly 1.6 million tons in 1955.

Likewise, the US government in 1951 guaranteed that it would purchase all domestically produced tungsten at $3.9375 per pound for five years or until 24,000 tons were stockpiled. Consequently, tungsten mine production increased from 2,000 tons in 1950 to almost 8,000 tons in 1955, which was then the highest level in US history—and virtually all of it was destined for the national stockpile.

While the United States lacks extraction and refining for many minerals, the US government should still only purchase domestic minerals for its non-military inventories so that government demand drives new mineral projects. For instance, in the 1950s, the US government guaranteed that it would pay premium prices for cobalt from the St. Louis Smelting & Refining Division of National Lead Co., incentivizing the firm to build a new cobalt refinery in the United States.

Stockpiling for wartime and peacetime

By building a sizable physical stockpile, a Resilient Resource Reserve could help mitigate supply disruptions to the US military in a major conflict while also incentivizing US mineral production. Both the US government’s mineral stockpiling in the early Cold War and China’s mineral stockpiling today demonstrate the effectiveness of such a stockpile. All that remains is for Congress to act.

Gregory Wischer is a nonresident fellow at the Payne Institute for Public Policy at the Colorado School of Mines.

Morgan Bazilian is the director of the Payne Institute for Public Policy and a professor of public policy at the Colorado School of Mines.

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Critical minerals investment must avoid the mistakes of the past in African mining

Rama Yade, Sibi Nyaoga — Wed, 14 Aug 2024 14:36:51 +0000

According to the US Department of Energy, there are fifty minerals that are “critical”—in that they not only serve an essential function in the technologies of the future but are also at a high risk of supply-chain disruption.

That risk is due to a number of factors, but one glaring reason is the limited availability or mining of these minerals in the United States. That is increasingly problematic as demand for these minerals rises, considering the role they play in building a green economy globally.

In contrast, across the Atlantic, Africa is home to over 30 percent of the world’s known reserves of critical minerals. While international interest and investment in the African critical-minerals industry have been lagging, it is rapidly picking up; this is welcome news for resource-rich African nations.

But history shows that mining interest and investment—even if welcome—can have inadvertent negative effects. In recent years, mines in the Democratic Republic of Congo (DRC), Zambia, and South Africa have been found to be polluting waterways, contributing to acid rain, and poisoning residents. Thus, the US public and private sectors should develop strategies surrounding mining projects that ensure African workers’ health is protected, the environment is not damaged, and the opinions of local communities are sought out, heard, and respected.

Acknowledge the checkered history of mining in Africa

It is important for mining companies and foreign governments to be cognizant of the historical context that surrounds the African mining industry.

For example, in South Africa in the nineteenth century, the discovery of diamonds and gold brought Africans and Europeans alike to mining areas such as the Witwatersrand and mining towns such as Kimberley. After the initial boom, the South African government passed the Natives Land Act in 1913, which restricted Black Africans from buying or occupying land outside of specified areas, except as employees. This policy restricted many Africans from benefiting from the proceeds of mining minerals, and for these people, their main access to any financial gain from the mines came only from working as miners.

While the legislation was repealed in 1991—and others like it are firmly in Africa’s past—it created the conditions for a variety of socioeconomic challenges, including poverty, inequality, and landlessness. Thus, as the US public and private sectors look to get more involved on the continent with mining projects, they should integrate into their strategies a plan for increasing economic opportunity for local communities.

The US government seems to be headed in this direction already with its support for and investment in the Lobito Corridor project, which aims to update the infrastructure along an economic route stretching from the DRC and Zambia to an Angolan port in order to improve the flow of mining-related trade and also to create jobs for local communities. Concerns still remain, but this form of holistic engagement is essential to ensuring mutual prosperity in mining projects.

Don’t exacerbate the “resource curse”

Many African countries have been associated with a “resource curse,” a term that refers to the failure of many resource-rich countries to fully benefit from their natural resources.

For example, Cabo Delgado, a small province in Mozambique’s north, is one of the country’s poorest regions, despite the region’s many natural resources. This has led many in Cabo Delgado to feel marginalized and angry at the central government. A 2011 discovery of a massive natural gas field off the northeastern coast of Mozambique further exacerbated this dissatisfaction. Specifically, youth in the region felt sidelined as foreigners and Mozambicans from elsewhere in the country benefited from the jobs and wealth associated with the discovery.

As the government formalized the mining sector and centralized control of it, artisanal miners were displaced. A widely held sense of injustice gave rise to an Islamist militant group, Mozambique’s al-Shabaab, which took advantage of these grievances to gain popularity among youth in the region. The activities of various armed groups in Cabo Delgado have resulted in around five thousand deaths and the displacement of 582,000 people since 2017.

In conducting mining projects on the continent, the US public and private sector should add to their strategies specific plans to ensure that the benefits of natural-resource endowment reach local communities.

Botswana provides a positive example. In recent years, the country—one of the world’s leading producers of diamonds and also among the least corrupt on the African continent—has developed a “pro-equity based extractive sector strategy,” taking revenues from extractive sectors and investing them in health and education infrastructure and also into long-term savings through an asset fund. There are also various mechanisms and institutions set up to prevent or catch corruption, such as a constitutionally independent body in charge of cases of corruption. Botswana shows that strong business and the fight against corruption are perfectly compatible.

As part of any strategy, US stakeholders should support African countries in their anti-corruption endeavors and empower human-rights organizations that risk much to protect the resources of these countries and ensure benefits from mining reach local communities. Doing so would encourage African countries to take corruption issues seriously and, in the long run, would create a more attractive environment for sustainable investments. That contradicts the naive belief of some people—such as Israeli businessman Dan Gertler, who was sanctioned by the Trump administration for what it called “corrupt mining and oil deals” in the DRC (he has denied wrongdoing)—that lifting sanctions would be a way to bring back foreign investors.

Strategize for stability

Over time, mismanaged mining projects have contributed to instability, violence, and conflict across Africa.

That dynamic can be seen not only in the Mozambique case but also in Kivu, a region in the DRC’s east. The DRC is central to the production of several critical minerals. For example, as much as 70 percent of global cobalt comes from the DRC. A conflict has gripped the region for almost three decades, and armed groups have wrestled control of mining areas to finance their operations. The DRC, Rwanda, Uganda, and China have often put their interests ahead of those of the residents, who are hoping to see their quality of life improve. Currently, six million people are internally displaced within the DRC, and since the start of the conflict in 1996, six million people have been killed.

With this history in mind, US mining companies with projects on the continent must strategize on how to limit the role mining plays in exacerbating conflicts and tensions. They can do that by bringing more of the supply chain—specifically, value-adding stages of critical-mineral processing—to the continent.

Industrializing the mineral sector in Africa

Historically, mining in Africa has been exploited by foreign partners. China, for example, controls 80 percent of the world’s raw mineral refining and owns fifteen of the seventeen cobalt mining operations in the DRC.

But the US public and private sector can change this status quo by bringing more of the value-adding stages of critical-mineral processing to the African continent, rather than extracting the minerals and bringing them immediately overseas for processing. Not only would this appeal to local populations—as it would encourage industrialization—but employing this different strategy would offer the United States a comparative advantage over China.

A strategy that brings value-adding steps of the value chain to the continent should promote local job creation, prioritize environmental protection in areas with high floral and animal biodiversity, and protect workers’ health. It should also prioritize the deployment of cleaner mining techniques (including those mobilizing artificial intelligence) and encourage countries to adopt a tax that allows for a more fair and just distribution of revenues from mining.

Economic communities—such as the Southern African Development Community—should also play a role in promoting regional value chains. Through such groupings, countries should take advantage of opportunities to share information and data, build capacities, and harmonize legal frameworks.

Stakeholders from the United States must remember that this is about more than curbing Chinese and Russian influence on the continent; rather, it is about avoiding past wrongdoings on the continent, by supporting local communities and preventing mining operations from contributing to various forms of instability and conflict.

But there’s also a bigger picture to keep in mind: By getting mining investment right, the United States can set a new precedent for its collaboration with African countries in other areas, such as in health, security, and technology.

Rama Yade is senior director of the Atlantic Council’s Africa Center and senior fellow for the Europe Center. She is also a professor of African affairs at Mohammed VI Polytechnic University in Morocco and at Sciences Po Paris.

Sibi Nyaoga is a program assistant for the Atlantic Council’s Africa Center where he supports the center’s work on critical minerals and migration.

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Integrating artisanal mining into the formal economy would benefit African miners and economies alike

Sarah Way — Fri, 12 Jul 2024 17:37:58 +0000

As the world pivots toward low-carbon energy, the demand for raw critical minerals—important inputs for innovations such as solar panels and electric vehicles—is continuing to soar.

The higher demand for critical minerals is expected to cause a significant expansion in the extraction and production of an array of mineral resources. For example, the World Economic Forum projects that the production of minerals including graphite, cobalt, and lithium could increase by nearly 500 percent by 2050 to meet the growing demand for clean-energy technologies. Estimated to hold approximately 30 percent of the volume of critical-mineral reserves, the African continent is situated at the very center of the energy transition.

A considerable amount of minerals—for example, 25 percent of tin and 26 percent of tantalum production—is sourced by artisanal and small-scale mining (ASM): low-tech, labor-intensive mining operations in which workers (largely unskilled labor) use rudimentary tools and techniques to access mineral ore. ASM is an important source of rural employment in Sub-Saharan Africa, with an estimated ten million people in the region working as artisanal and small-scale miners—sourcing critical minerals but also other minerals such as gold. These workers are often driven to the sector by poverty. At least sixty million other individuals facilitate these informal supply chains.

However, many of these artisanal and small-scale miners work informally and face harsh conditions. Before critical-mineral production ramps up even further, African communities, stakeholders, and governments must take steps to formalize these workers—and the international community, including the United States, should help.

What is the problem?

In contrast with ASM, large-scale mining (LSM) is industrial and long-term, utilizing heavy machinery to extract resources. Furthermore, LSM has more geological information available to it and better access to capital and finance. Most importantly, LSM generally operates within the rules of law and adheres to international standards and regulations. It is accompanied by many challenges, however, including causing ecological and habitat damage; polluting the water, air, and soil; and threatening human health. Even where mining operations are conducted legally and formally, they still pose significant environmental and socioeconomic problems.

Although vastly different types of mining, ASM and LSM often take place in overlapping spaces, with ASM operations appearing on the periphery of larger industrial sites. Artisanal miners frequently live and work in areas earmarked for large-scale mining projects, blurring the line between the two. This is exemplified by the presence of illicit or licit networks of middlemen who transport ore from ASM sites to LSM companies and processing facilities. Middlemen often aggregate minerals from various sources, including both ASM and LSM operations, making it especially difficult to trace the origin of the minerals. The fragmented and opaque nature of the mineral supply chain complicates the traceability of products from upstream suppliers to downstream companies.

There are many challenges associated with artisanal mining. At least 90 percent of artisanal miners work informally, without the necessary licenses or permits required by law. Securing permits improves miners’ access to services they are unable to access in the informal economy—such as microfinance credit, grants, and government loan facilities, which, in turn, place the miners in a better position to accumulate wealth. In many cases, ASM activities are found in regions that are out of reach of regulators, where the institutional presence of the government is weak. By operating outside of state recognition, it becomes impossible for the government to establish and enforce health and safety standards and regulations.

With informal mining operations flying under the radar of the government, either by the design of mining site owners or willful ignorance on the part of the government, workers are routinely exposed to poor labor conditions and dangerous situations. Artisanal miners often work without proper tools and protective gear in unsupported and poorly ventilated underground shafts where, as Amnesty International points out, temperatures can be extremely high. Exposure to the dust and mineral waste generated from these mines can lead to potentially fatal diseases and health conditions, and the dust and waste also contributes to pollution and environmental degradation in the area surrounding the mine.

Across the African continent, artisanal mining has been linked to human-rights violations, forced labor, crime, and conflict. These issues, compounded with artisanal miners’ lack of legal rights, exacerbates their vulnerability and the cycles of poverty and exploitation they face.

More at stake

The problems in ASM often present a significant barrier to sustainable foreign investment in African critical minerals. The aforementioned problems in the artisanal sector have made Western business interests hesitant to invest in Africa’s critical minerals. Poor labor practices and human rights violations associated with ASM could expose global companies to reputational and regulatory risks. These concerns—combined with pressure from non-governmental and human-rights organizations—make investment in ASM a complicated and risky proposition.

This barrier is present in artisanal cobalt mining in the Democratic Republic of the Congo (DRC). Cobalt is a critical component of many lithium-ion batteries, including ones used to power electric vehicles, produce components for wind and solar energy technologies, and power portable electronic devices such as smartphones. The DRC accounts for more than 74 percent of global cobalt mining, and 20 to 30 percent of that is via ASM.

In some regions of the DRC, artisanal miners are exploited by armed groups that seek to control mining areas and siphon revenue to finance their operations, purchase weapons, and sustain conflicts. Militias have abducted and trafficked children to extract cobalt as well as copper, in a bid to fund their groups. In addition, some ASM cobalt operations employ children. It was once estimated that forty thousand children were mining for cobalt, working in life-threatening conditions and exposed to violence, extortion, and intimidation.

Such problems associated with informality, including the absence of regulatory standards and the occurrence of human-rights violations, make it difficult for potential investors to justify long-term investments. Without clear, enforceable laws, investors face a high-risk business environment and unpredictable changes in mining policies, which undermine investor confidence.

In addition to posing these immediate risks to artisanal miners and their communities, informal mining exacerbates economic and market instability on a macroeconomic level. Informal miners typically earn a meager and unstable income, which is subject to fluctuation based on the market prices and demand for cobalt. Miners’ economic instability translates into broader economic uncertainty for the sector and limits opportunities for community development. The presence of such substantial unregulated economic activity leads to significant tax revenue losses for the government, because these transactions primarily occur outside of official channels. This undermines the state’s capacity to invest money in necessary social programs, build infrastructure, and quell violence in other regions of the DRC. In spite of these challenging economic implications, African governments might resist formalization efforts, unwilling to disrupt the vital role ASM plays in the livelihoods of many individuals and communities across Africa.

While artisanal cobalt mining in the DRC provides a case study, some of these issues associated with informality are also prevalent in the mining of critical minerals in other African nations, such as lithium production in Zimbabwe and Namibia. Across the continent, the volatility of ASM creates a less attractive investment environment, given that investors seek dependable production to ensure stable supply chains and therefore profitability.

What might formalization look like?

Despite the complications associated with the informal production of many critical minerals, the solution is not to disengage from ASM; it employs 90 percent of the mining workforce. Rather, the solution lies in formalizing and legalizing ASM, which will help mitigate the risks inherent to these mining operations while fostering a more regulated and stable environment for international investment in Africa’s critical minerals.

Integrating the ASM sector into the formal economy would help improve local security, stabilize incomes, and ensure that safer and more environmentally sustainable practices are implemented. It would also help create national regulations and international standards, pressuring the ASM sector to improve practices to become compliant.

Formalization means that miners are registered with proper mining titles. Even in some countries where ASM is recognized by law, governments have not made it possible for miners to obtain the necessary permits and licenses. But in addition to these permits and licenses, formalization also includes—according to the Washington-based nonprofit Pact—efforts by the mining industry to enact chain of custody and supply chain transparency measures; health, safety, and environmental protections; security and human-rights protections; measures that improve access to finance; and requirements to use proper mining techniques. In addition, formalization includes sound industry policies, procedures, and due diligence systems, which should be in place throughout the life cycle of a mine. These components of formalization create a framework within which artisanal miners can operate safely and legally, contributing positively to community-wide and country-wide development goals and global supply chains.

Given the complexity of the informal economy, there is no simple, one-size-fits-all approach to formalization. We can, however, look for strategies that have been effective in other countries or industries and use them to guide the approach towards formalizing ASM. For example, Rwanda’s 2010 Land Tenure Reform Programme initiated a systematic registration effort to promote land access and address tenure insecurity. This program registered over ten million land parcels in less than five years and enabled landowners to use their property as collateral for loans, facilitating access to credit. The program has been widely regarded as successful in integrating the informal economy, particularly due to its simple registration process and involvement of community members and stakeholders in the reform. Transitioning ASM to the formal economy must also use an integrated whole-of-society approach, centering African communities, stakeholders, and governments. This might mean starting small at a grassroots level by engaging local communities in social dialogue, allowing informal miners to express their views and defend their interests. Their inclusion at an early stage of the formalization process will ensure that policies address informality efficiently and enhance the effectiveness of such measures.

There have been some efforts in recent years to support the formalization of ASM workers and improve social and environmental practices in the sector. For example, as the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) explains, international Fairtrade and Fairmined standards set minimum standards for responsible mining, which support formalization. Furthermore, chain of custody initiatives trace supply chains from mine to market to ensure that supply chains are not associated with any conflicts or human rights abuses and that they meet international regulations. These are certainly steps in the right direction but, as the IGF explains, there are concerns about the long-term sustainability of these initiatives and whether they are reaching the most marginalized communities.

Formalization is a very complex but necessary process that can improve the lives of miners and address issues in the critical-mineral supply chain—and therefore attract more sustainable investment to the sector, contributing to the broader development goals of African countries.

How the international community can help

As mineral extraction in Africa is only expected to increase in the foreseeable future, it would be strategically unwise for the international community, and in particular the United States, to sit idly by on the issue of formalizing artisanal mining.

Going forward, the United States can focus on capacity building and simplifying trade processes and market access to help formalize artisanal mining in Africa, which could lead to increased global investment in critical minerals. To build the foundation for policies and programs that provide legal protection for ASM miners, the United States could fund and support training programs for artisanal miners, local authorities, and government officials on sustainable mining practices, health and safety standards, regulatory compliance, and business skills. By strengthening local and national institutions responsible for overseeing the ASM sector, governments would be better able to enforce regulations, protect the rights of artisanal miners, and formalize the sector.

The United States could also work with African governments and international organizations—such as the African Union and the United Nations Conference on Trade and Development—to simplify trade procedures, enabling miners to participate legally and more fully in global supply chains. In December 2022, the United States signed a memorandum of understanding with the DRC and Zambia to develop a productive electric-battery supply chain—from the extraction of minerals to the assembly line. The agreement also serves as a commitment to respect international standards and to prevent, detect, and fight corruption and build a sustainable industry in Africa that benefits workers and local communities, as well as the US private sector. At this time, it is more political than actionable, although it creates a framework for future negotiations and strengthened partnerships. Deepening ties with African nations and collaborating with international organizations can help leverage the resources, expertise, and global networks to ensure a more conducive environment for investment and sustainable growth. Increasing institutional capacity would also allow governments to strengthen tenure security and clarify property rights for ASM, particularly reducing the incidence of ASM-LSM conflict.

The creation of more legal channels for miners to sell their products could enhance supply chain transparency and promote more sustainable market practices. Implementing an international certification mechanism, similar to the Kimberley Process Certification Scheme (KPCS), offers the ASM sector an opportunity for empowerment and a pathway towards legitimacy. Originally established to remove conflict diamonds from the global supply chain, the KPCS mandates that member countries adhere to strict certification requirements, import and export controls, regular audits, and controlled trade. The principles of the Kimberly Process might be adapted to the extraction of critical minerals so as to increase the security of artisanal miners and their access to legal markets.

Not only would these policy actions benefit African countries in the context of the critical-minerals boom and improve the livelihoods of miners, but they would allow the United States to strengthen its economic and strategic partnerships with African countries. As critical minerals will continue to advance the clean-energy transition, decisive action is essential to make the future of mining a pathway for inclusive, sustainable development for the countries that supply minerals to the world.

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From greenfield projects to green supply chains: Critical minerals in Africa as an investment challenge

Aubrey Hruby — Mon, 01 Jul 2024 16:00:00 +0000

Africa is central to the global energy transition. The necessary resources for a low-carbon economy are abundant in Africa, with the continent possessing 30 percent of the world’s known mineral reserves—many of which are critical for the manufacturing of batteries, solar panels, wind turbines, and other clean energy technologies. Africa’s untapped potential is greater yet, with research suggesting that the continent holds 85 percent of manganese reserves, 80 percent of platinum and chromium reserves, 47 percent of cobalt reserves, and 21 percent of graphite reserves, much of which is unexplored or underexplored. Demand for these resources is also on the rise, expected to more than double between now and 2030.

While Africa is rich in minerals and strategically located, it risks losing out on a historic investment opportunity. The infrastructure investment problems that have hindered non-Chinese capital flows into African markets for decades are front and center as investors and governments assess the strategic role the continent could and should play in the global shift to cleaner energy sources. While infrastructure investment has shown growth in recent decades, a significant financing gap persists, estimated to be around $100 billion each and every year.

To counterbalance China’s dominance in battery supply chains, the United States must leverage its strengths in technology, education, and capital markets. Initiatives such as Prosper Africa need to be dynamically scaled and optimized to provide meaningful support, ensuring that US investors can more easily and rapidly navigate the complex landscape of Washington.

With this urgency in mind, this report provides a snapshot of Africa’s mineral wealth and the state of mining industries, draws out the similarities between the mining and infrastructure investment attraction challenges, describes the competitive landscape African nations find themselves in, and makes innovative recommendations—namely to the US government—to rapidly accelerate investment in sustainable mining industries in African markets.

This report is the first in a series on the critical minerals sector in Africa, and is part of the Africa Center’s Critical Mineral Task Force.

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