Not just China: the USA has also entered the rush for metals in Africa
The United States wants to encourage the extraction and transport of "green" metals in Africa through a large railway project: the Lobito corridor. All the details
The energy transition passes through electric batteries and therefore through the procurement of critical minerals and metals for the batteries themselves. US President Biden knows this very well, so much so that he intends to undermine the current Chinese primacy in the control of the same minerals and metals such as cobalt and copper that Beijing also extracts in Africa. And it is precisely from that continent that the US counteroffensive consisting of new investments and a huge railway project starts.
The meeting
“We need more US companies like KoBold to invest in Africa.” This concludes the tweet that the US undersecretary for economic growth, energy and the environment José W. Hernandez launched on the web after meeting the CEO of that mining group who in the photo posted is talking to him sitting at a table in the State Department.
The new mine
Despite just nine "likes", that tweet from September 12th contains at least a lot of important news.
First of all, the 150 million dollar investment made in December 2022 by KoBold with the concrete prospect of inaugurating the first copper mine ever opened by an American company in decades in the town of Mingomba in Zambia by 2030.
As Bloomberg writes, KoBold is convinced that there is an immense copper deposit on the site, which justified a huge investment announced at the summit of US and African leaders that year in a project that even enjoys the support of Bill Gates and Sam Altman of Apollo Projects.
The president of the group whose shareholders also include Jeff Bezos is called Josh Goldman and he reveals to Bloomberg that the deposit in which he has been digging for over a year is "extraordinary". He compares it to the Kakula mine, developed by Ivanhoe Mines and China's Zijin Mining Group in neighboring Democratic Republic of Congo from which 400,000 tonnes of copper were mined last year.
In the new Mingomba mine KoBold is using AI to optimize exploration aimed at finding not only copper but also cobalt.
A railway corridor made in the USA
KoBold's optimism is not far-fetched because it is based on another parallel project equally made in the USA which was certainly talked about in that room at the State Department.
Washington's idea is to build the Lobito rail corridor that would stretch across three countries, connecting the copper-rich hinterland of Congo and Zambia to the Atlantic coast of Angola via a 2,600-kilometer line.
A $2.3 billion infrastructure co-financed by the American government, the African Development Bank and the private trader Trafigura which, observes Bloomberg, “represents Washington's single largest concrete move to counter China's dominant position in the critical metals in Africa”.
A very ambitious plan that President Biden wants to maintain control of as it is considered crucial for the US energy transition and for the efforts to adopt electric cars on a large scale.
Problems
But there are risks that were also discussed in Congress, where the thorny issue of human rights in Angla and the instability of a country like Congo was raised.
Others, however, have wondered whether such a huge expense is justified by the mineral benefits that would result from it and still others have wondered how appropriate it is to carry out a project that could also benefit Chinese and Western competitors.
The determination of the White House
“There is no time to waste,” says Biden's senior energy and investment adviser Amos Hochstein, however. “We have been absent from the scene for too long.”
“An electric vehicle – it is explained – is essentially a battery, and what is in a battery is found in Africa… and therefore Africa has a great opportunity to be part of a clean energy future”.
Are metals the new gold?
What is certain is that critical metals for EVs such as cobalt and copper are the protagonists of a market destined to explode.
The analysis conducted by BloombergNEF says that if we want to reach the goal of zero emissions in 2050, the world will need an additional quantity of those metals worth an estimated ten trillion between now and then.
Africa ready for the call
Congo, Bloomberg reminds us, already offers two thirds of the world's cobalt and has also recently risen to second position among global producers alongside Peru. Further south, Zambia aims to quadruple its copper production by 2031.
China factor
But there is a problem immediately highlighted by the financial newspaper itself and it is that Dragon whose companies already control in whole or in part the majority of the mines that produce copper and cobalt.
The companies that manage the railways that connect the copper belt with the African ports further south are also Chinese, in a concrete return on the investments made by Beijing with the Belt & Road.
Since the beginning of this century, China has lent African governments at least $170 billion invested in airports, railways, roads and ports. With the result that now those countries cannot repay those debts, triggering a crisis in relations with Beijing but also giving vent to internal criticism according to which China's attentions have not benefited local economies and workers as promised.
Zambia has stopped repaying its debts since 2020 and has been calling for restructuring ever since, finding leverage in Washington which is now putting pressure on China using the World Bank as an intermediary.
G7 and EU jump on the bandwagon
With that ambitious railway project, Washington is now aiming not only to reverse the trend but also to win on a continent where for decades the US has invested billions in health projects and counter-terrorism while China has made the most of the Belt & Road.
To demonstrate that it is serious, America asked and obtained that the G7 and the EU support the project which since last October has identified the Nigerian Africa Finance as the developer of the railway line.
The feasibility study will be finished this year and, if all goes well, work will begin in 2026 and be completed four years later.
Ferment in Lobito
The port of Lobito today is practically not used for the export of metals, but AGL, which won the concession to operate the container terminal, estimates that within a decade at least 20% of what is extracted from the copper.
The company tells Bloomberg that it aims to triple the number of containers in 2026 and further double them in 2029.
Red carpet at the White House
Many things must have been said in the White House when Biden and Angolan President Lourenço met last November.
This can be deduced from the letter that Lourenço's lobbyist had addressed to Biden, encouraging the reception with all the honors of a leader who with that letter wanted to make it known that he was ready to "renounce historic relations with China and Russia in favor of of a new strategic partnership with the USA".
Everything therefore fits together, and the conquest of a new frontier can begin for America.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/stati-uniti-metalli-africa/ on Sun, 25 Feb 2024 06:54:12 +0000.