Conference Presentation, Panel
Global Stakes: Critical Mineral Investments in a Changing World | Middle East & Africa Summit
Milken InstituteEleni Giokos, Mateo Goldman, Marie-Chantal Kaninda, Oskar Lewnowski, Ayo Sopitan, Bob Wilt
- China currently dominates the critical minerals sector, processing and refining 70–90% of global rare earths and securing extensive supply chains, while controlling 65% of battery components, 71% of rechargeable battery cells, and 57% of electric vehicles.
- The US government has elevated supply chain diversification and critical mineral security to a top national priority, moving beyond previous hesitancy to address risks associated with reliance on a single country.
- The US Development Finance Corporation (DFC) is ramping up investment output, having reached $12 billion in fiscal year 2024, with new leadership prioritizing speed and expanded financial tools including direct lending, political risk insurance, and equity stakes.
- Saudi Arabia is accelerating its strategy to become a major processing hub, partnering with US firms like MP Materials to develop midstream processing capabilities for rare earths and reduce oil dependence under Vision 2030.
- The Lobito Corridor, a 1,700-kilometer infrastructure project spanning Angola, the DRC, and Zambia, is currently under construction to facilitate mineral transport, though its success depends on securing non-Chinese off-takers in the US and EU.
- China's historical dominance stems from adopting US-developed separation technologies in the 1970s and 80s, which Washington avoided due to environmental concerns, allowing Beijing to perfect the process over four decades.
- Western governments are prioritizing environmental, social, and governance (ESG) standards over "no interference" policies, viewing China's approach to African mining as a liability that has generated regional wariness regarding human rights and environmental degradation.
- Glencore operates a major copper and cobalt facility in the DRC with over $8 billion invested since 2008, noting that 95% of its employees and 90% of DRC industrial cobalt production are locally sourced and OECD/RMI certified.
- The DRC government has banned cobalt exports due to low prices, now restricting each exporter to specific quotas and mandating that companies produce refined metal rather than hydroxide within two years.
- A critical supply gap is projected by 2040, with a potential shortfall of 10 million tons of copper even with current announced growth plans, necessitating new mining technologies and higher throughput.
- Ayo Buhle's company in Northern Zambia currently relies on diesel power costing 26 cents per kilowatt hour but plans to switch to renewable energy by Q3 2026 to achieve competitive, carbon-neutral processing costs.
- Permitting and regulatory approval are identified as larger bottlenecks than financing for building new processing plants, with the EU trailing the US by 2–3 years in committing to industrial processing infrastructure.
- Mining projects face a "chicken and egg" challenge where processing capacity requires feedstock, while feedstock production requires processing infrastructure, necessitating warehousing solutions and balanced inventory financing.
- The DFC's strategic pipeline currently holds the most significant volume of upstream projects, though the agency actively seeks financing opportunities for midstream and downstream beneficiation in Africa, Latin America, and Southeast Asia.
- Oscar Munoz notes that 700 million tons of copper have been historically produced, and an equivalent amount will be needed in the next 20 years, making recycling and repurposing existing stockpiles a critical, though technologically unsolved, component of the supply solution.
- Future mining labor is projected to shift from underground operations to automated, urban-based control centers, potentially transforming the industry's public perception and attracting new demographics of young engineers and technologists.
- Geopolitical risks include China's potential retaliation through market manipulation, such as tanking nickel prices in Indonesia, prompting discussions on creating OPEC-like resource cartels to stabilize prices.
- Saudi Arabia's grand strategy focuses on building downstream industries (aerospace, defense, automotive) locally to diversify its economy, rather than merely acting as an export hub for finished materials.
- The US administration is negotiating critical mineral deals at the National Security Council level, signaling a departure from standard Commerce or Treasury-led agreements and indicating heightened urgency in securing partnerships with allies.
- Ayo Buhle highlights that while Africa has vast untapped geological potential, many current projects are too small to attract significant capital, requiring "first-loss" capital to scale assets from tens of millions to hundreds of millions of tons.
- Oscar Munoz estimates that only 10–20 large-scale, long-life mining projects exist globally, emphasizing the need to mine harder, lower-quality deposits and utilize micro-mines with hub processing facilities.
- Recycling is identified as a viable alternative to primary mining, with companies like Glencore actively pursuing lithium recycling business units to recover metals from electronic waste.
- The DRC's Inga Dam presents a unique opportunity to produce "green copper" via 100% hydropower, significantly lowering the carbon footprint of African mineral production compared to diesel-dependent regions.
- US and allied nations are increasingly willing to absorb higher costs and longer timelines to ensure supply chain security, balancing speed against the strict ESG and quality standards that differentiate Western operations from Chinese competitors.
- Tal Buhle suggests that national geological surveys in African nations need funding to de-risk exploration, as the lack of comprehensive data hinders investor confidence despite the continent's resource wealth.