Biden may help fund overseas mining to boost mineral access

By Jael Holzman | 09/23/2022 01:36 PM EDT

Secretary of State Antony Blinken spoke Thursday during the U.N. Security Council meeting in New York City. Blinken also addressed the Minerals Security Partnership at a separate event.

Secretary of State Antony Blinken spoke Thursday during the U.N. Security Council meeting in New York City. Blinken also addressed the Minerals Security Partnership at a separate event. Michael M. Santiago/Getty Images

The Biden administration may help fund overseas mining projects to obtain more minerals necessary to build renewable energy technology, Secretary of State Antony Blinken said Thursday.

Blinken said at a ministerial meeting in New York that the United States and its allies in a new pact called the Mineral Security Partnership are open to “providing a loan guarantee or debt financing” to countries with a plentiful supply of the minerals used in electric car batteries, solar panels and wind turbines.

The meeting, which coincided with the United Nations General Assembly, included some of the most mineral-rich nations in the world: Argentina, Brazil, the Democratic Republic of the Congo, Mongolia, Mozambique, Namibia, Tanzania and Zambia. Also present were other members of the Mineral Security Partnership, such as Australia, Canada, France and the United Kingdom.

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The effort is part of the Biden administration’s focus on securing minerals like lithium and cobalt to aid the transition away from fossil fuels — a supply chain that China currently dominates. China, for example, owns large mines in some of the countries the U.S. wants to engage with in the partnership, such as Congo and Argentina.

“This is something that I think can make a profound difference,” Blinken told attendees. “This really is critical.”

Reta Jo Lewis, chair of the Export-Import Bank of the United States, was also in attendance at the meeting. The U.S. Export-Import Bank has previously financed transactions related to mining projects in other countries.

Blinken’s remarks indicate the Biden administration could use public funds to swing at China’s share of the mining industry, as U.S. auto and tech companies race to find new sources of minerals without Chinese ties.

The initiative could also help connect companies trying to get mining projects going with private companies in the U.S. or other partnership countries, as well as providing support to other nations’ mining industries with “technical assistance” through nearby embassies.

“What that support will look like varies, of course, from project to project,” Blinken said.

The emphasis on finding ways for the U.S. to boost its access to minerals from other countries comes as domestic mine developers bemoan delays with the federal permitting process (Greenwire, Aug. 9).

Biden administration officials have already floated offering taxpayer dollars directly to mineral projects in Canada (Greenwire, Aug. 23).

The U.S. also invested in overseas mining related to the energy transition under former President Donald Trump. In 2020, the U.S. International Development Finance Corp. — a quasi-independent government agency — injected $25 million into a nickel mining project in Brazil overseen by TechMet Ltd., a U.K. mining company that is separately developing a lithium mining project in California’s Salton Sea (Energywire, Oct. 6, 2020).

Blinken depicted the potential financing with a broad vision, as a form of soft power that could potentially provide benefits to mining communities in other countries.

“Critical minerals are at the heart of this transition,” he said. “Too often, the relationship between minerals-producing and minerals-purchasing countries has been extractive and characterized by abusive working conditions. Often, it’s left behind environmental degradation and devastated communities.”

Blinken had an example of how U.S. financing for mining in other nations could bring about a more just transition: the Balama graphite mine in the Cabo Delgado region of Mozambique poised to supply battery material directly to U.S. automakers. The Biden administration has provided a $102 million loan to the mining company to build out a refinery in Louisiana that will process the raw graphite.

Earlier this year, experts on Mozambique raised concerns with E&E News that the graphite mine, operated by Australian mining company Syrah Resources Ltd., could inflame conflict in the Cabo Delgado region, where militant insurgents have a history of attacking resource projects owned by Western companies (Greenwire, May 11).

Blinken had a more optimistic take on the mining project, focusing on its economic benefits and attempts by Syrah to maintain peace locally.

“We’re already beginning to see new projects that are supporting economic growth on all sides,” he said. “Just to cite one example, [the] graphite mine in Balama, Mozambique, which employs hundreds of local workers, contributes millions of dollars in community development, and undermines the aims of those who would sow conflict.”

The Mineral Security Partnership was formed in June as national security hawks like Sen. Joe Manchin (D-W.Va.) pressed Biden and other congressional Democrats to address China’s influence in the global minerals trade.

Manchin ultimately succeeded in tying half of a consumer electric vehicle tax credit in the Democrats’ new climate law to a requirement that cars be made with minerals that were mined or processed in the United States or any nation that signed a U.S. free-trade agreement. The climate law also disqualifies an EV from the full tax credit if it was made with any minerals mined or processed in China or Russia (Greenwire, Aug. 18).

Helaina Matza, director of energy transformations at the State Department, explained the intentions behind the mineral partnership during an interview in July. She described it as an international “investment network” that would “connect the dots” between countries with ample mineral supplies, mining companies and outside investors.

“It ensures the conditions that would actually allow a policy objective like bringing on more renewables or more EVs will be real and that we’re not going to see the supply crunches we’ve been told we are likely to see in the next five to 10 years,” Matza said. “We’re able to actually think about it in practical terms.”

Matza said internal discussions at the partnership had involved bringing “public resources to bear” in pursuit of “shortening the time horizon it would take” for mining projects in various parts of the world “to move forward on their own.”

As the State Department embarks with the new minerals pact, it is also soliciting advice from the private sector.

In March, the department formed a panel called the Clean Energy Resources Advisory Committee to give feedback on its “strategies, programs, and policies related to clean energy mineral supply chains.”

The committee’s 15 members include automakers Ford, General Motors, Rivian and Tesla, as well as several mining and metals recycling companies, according to the State Department.

A State Department spokesperson said the committee “is advising on mineral related issues, but is not involved directly with [the] MSP.”

Seaver Wang, co-director of the climate and energy team at the research group Breakthrough Institute, said the partnership could theoretically help shorten the timetable for U.S. automakers to meet the mineral sourcing requirements in the climate law.

“As long as the governments involved are prepared to commit to the level of industrial policy necessary to incentivize and promote actually developing these supply chains, I think it’s a worthwhile effort and a necessary step,” Wang said.

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