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 is projected to maintain its dominance by processing and refining 70 to 90% of rare earths and critical minerals, forcing the US and allies to actively de-risk supply chains through diversification strategies.
- The US government prioritizes critical mineral supply chain strengthening across upstream, midstream, and downstream sectors, with the Development Finance Corporation (DFC) aiming to significantly exceed its $12 billion fiscal 2024 output to finance processing and infrastructure in emerging markets.
- Key infrastructure initiatives include the 1,700-kilometer Lobito corridor in Africa and potential partnerships with Saudi Arabia to develop rare earth mines and midstream capabilities, both conditional on securing Western off-takers to avoid reliance on Chinese markets.
- Strategic shifts in governance anticipate the US and EU adopting stricter environmental standards and a partnership approach to mitigate political risks, contrasting with China's historical "no interference" policy while aiming to close a two-to-three-year lag in building processing plants.
- The DRC government has mandated that mining companies produce metals rather than hydroxide within two years following a cobalt export ban, a move intended to demonstrate market control and foster local industrialization in Zambia and beyond.
- Market dynamics face a projected 10 million ton copper deficit by 2040 driven by AI and energy transition demands, with historical production of 700 million tons requiring equivalent output over the next two decades despite a static 23 million ton annual rate.
- Future supply strategies involve a transition from a scarcity of 40-year life mega-mines to micro-mines and hub processing facilities, supported by recycling initiatives and decentralized resource alliances modeled after OPEC.
- Operational efficiencies are expected through the adoption of renewable energy, potentially reducing costs from 26 cents to 12 cents per kilowatt hour by 2026 in Zambia, and increased automation which will eliminate underground jobs within ten years.
- Geopolitical risks include potential Chinese retaliation via breaking mineral caps to tank prices if economic issues arise, necessitating first-loss risk financing from entities like the DFC or USTDA to attract private investment.
- Investment gaps exist in Africa where the lack of national geological surveys offers opportunities for agencies to fund studies, while the US prioritizes speed in negotiations to balance rapid project development with high-quality standards.