The US government on Wednesday launched a new public-private partnership to try to enrol the corporate sector in its competition with China for control over strategic minerals in Africa and beyond.

The State Department is partnering with the non-profit SAFE to create the Minerals Investment Network for Vital Energy Security and Transition, or MINVEST.

The goal is to engage the US business sector in government efforts to secure the resources needed for the green energy revolution from friendly nations, said under secretary of state for economic growth, energy, and the environment Jose Fernandez.

“Why are we doing this?” Fernandez asked at a signing ceremony with SAFE founder and president Robbie Diamond. “We have a need. And the need is very clear: In order for us to reach our clean energy goals by 2050, we’re going to need exponentially more critical minerals than we have now.”

‘Strategic vulnerability’

“The obstacle right now,” Fernandez said, is that there’s “relatively little investment in this field. We have supply chains that are dominated by one or two countries. We don’t get enough information. And so we need to be able to galvanise the private sector in our efforts.”

Diamond said SAFE launched its Center for Critical Minerals Strategy in 2021 with the goal of addressing America’s “strategic vulnerability” to Chinese control over many of the minerals needed to power electric cars and green energy grids. The new partnership with the State Department advances that mission.

“The US, its trading partners and its allies, in order to maintain competitive advantage globally – and frankly, to maintain control of our economic or geopolitical destinies – must work with the private sector to invest in the extraction, refining and recycling of these critical minerals as well as in the manufacturing of products they will power,” Diamond said.

“The fear is that we go from ‘We won’t sell you this mineral unless you buy the whole battery’, and then they say ‘We won’t sell you the battery until you buy the whole car’. Well, that could be game over,” Diamond said. “So we have to compete with what we’re good at. And what we’re good at is transparency, free markets, high values.”

Race to the top

The investment network is a “partnership in its truest form”, said special representative for global partnerships Dorothy McAuliffe – “one which emerged organically from shared goals and objectives”.

It came about after the critical minerals working group chaired by Fernandez identified the need to “infuse more private sector perspectives into our critical minerals strategies and activities,” she said.

Last year, Fernandez’s office launched a Minerals Security Partnership that currently consists of 13 countries – none in Africa so far – and the European Union, to “catalyse public and private investment in responsible critical minerals supply chains globally”.

The partnership has four main goals, he said: sharing information about projects around the world; investing and financing projects together; promoting recycling in the critical minerals space; and doing it all sustainably.

Our success in the energy transition will only be effective insofar as we bring along the developing world

“It is both a business opportunity for our private sector and for our workers [and] a strategic imperative for the United States to be able to get the kinds of minerals that will power our clean energy future,” he said.

Helping hand

The partnership considered some 200 projects but is currently working on just 15, Fernandez said.

“A lot of the reasons why we reduced [the number of projects] is we believe that these were projects where we could not guarantee in good faith that we would follow the highest ESG [environmental, social and governance] standards,” he said.

Part of the US appeal in Africa is its “spirit of partnership”, said assistant secretary for energy resources Geoffrey Pyatt. Countries rich in resources “expect to enjoy some of the benefits of those resources in terms of local development, in terms of building human capital, in terms of advancing their own energy transitions”.

“We have to remember that our success in the energy transition will only be effective insofar as we bring along the developing world,” he said, “because if the United States and Europe continue to electrify everything, while the Global South is building more coal power plants, we are not going to meet our global climate goals and our net zero goal by 2050.”

Pyatt said the US had a “strategic imperative to make sure that we don’t trade an era of European dependence on Russian oil and gas for an era of dependence on China for critical minerals”.

Getting there means reassuring US companies about doing business in places like Africa, said Diamond.

“As companies are looking … to go to these countries, more difficult environments for them to work [in], having the US government have their back is a really, really important thing for them,” he said. “And if things aren’t going to be perfect, we’re willing to stand behind you.”

African countries also have a role to play.

‘Lack of urgency’

Speaking to The Africa Report at this summer’s US-Africa Business Summit in Botswana, the US Department of Commerce’s regional commercial officer for sub-Saharan Africa, Cynthia Griffin, noted a “lack of urgency” in some African countries in terms of getting their legal frameworks up to the standards required to attract foreign investment.

“I was at DRC Mining Week a little while back,” Griffin said. “And I just didn’t sense a sense of urgency from some of the governments … on the governance issues, the regulatory issues, things that companies need to see in order to come into some of these markets.”

Fernandez, however, said African countries want to seize the moment.

“I think that they sense the urgency, but they are careful,” he said. “Some of their experiences have not been positive experiences … and therefore, I think they are moving at a deliberate speed.”

Overall, he said, the appetite for partnering with the US is there.

“That’s not going to be a problem,” Fernandez said. “We are pushing on an open door.”