Experts consider US approach to Africa's critical minerals under Trump

As President-elect Donald Trump prepares to return to the White House with the intent of implementing his "America First" agenda, his commitment to establishing secure and sustainable global supply chains for critical minerals remains uncertain.

This uncertainty is particularly relevant in the context of Africa, where speculation persists about whether Trump will continue his predecessor's policies of fostering diplomatic and economic ties with the continent's mineral-rich countries, while also providing direct financial support to a selection of impactful mining and infrastructure projects.

The speculation arises as outgoing President Joe Biden visits Angola this week to highlight the achievements of the Lobito Corridor project, a 1,300 km railway linking the mineral-rich regions of northern Zambia and southern Democratic Republic of Congo to the Port of Lobito in Angola. This project is significant for the US and its partners, serving as a strategic corridor for the export of critical minerals such as cobalt and copper, which are essential for manufacturing electric vehicles and other renewable technologies.

In addition to supporting the Lobito Corridor, the US government's International Development Finance Corporation (DFC) is invested in a portfolio of African critical mineral projects aimed at delivering impactful development and contributing to US strategic goals of fostering expanded and diversified supply chains.

According to Abigail Hunter, the Executive Director of SAFE's Center for Critical Minerals Strategy, mineral supply chain security and engagement with African countries is expected to remain a key focus, given that many investment instruments were established during Trump's first administration.

The DFC was launched under the first Trump administration with an investment limit of $60 billion and a mandate to engage with the private sector, channelling investments into projects that support economic growth and enhance local living standards.

During his first term, Trump also granted the US Export-Import Bank (EXIM) its longest reauthorization in history and oversaw the creation of the China Transformation Export Program, which focuses on identifying and investing in promising projects that enhance US industrial competitiveness.

Hunter also highlighted the Trump administration's role in establishing the Energy Governance Resource Initiative (ERGI) in partnership with Botswana, Peru, Australia, and Canada, seen as a precursor to the Minerals Security Partnership.

Announced in June 2022, the MSP is a collaboration of 14 countries and the European Union aimed at accelerating investment in global critical minerals supply chains

In addition Hunter pointed to the significance of the first Trump administration's Executive Order 13953, "Executive Order on Addressing the Threat to the Domestic Supply Chain from Reliance on Critical Minerals from Foreign Adversaries," which directed the State Department to reduce the vulnerability of the US to the disruption of critical mineral supply chains through cooperation and coordination with partners and allies, and to build resilient critical mineral supply chains.

"The initiatives alluded to here could be the same or similar to those multilateral ones taken up by the Biden administration," she said.

Countering China

Regarding the risk that US support for the Lobito Corridor may be halted or scaled back under Trump, Hunter said that the project aligns strongly with the first Trump administration's strategy to counter Chinese dominance in Africa's mining industry. With the DFC's $553 million in investment loans to the Lobito Corridor approved by its board in October, she remarked that unwinding these investments would be challenging as the loans are now ready for disbursement.

"The Lobito Corridor is essential for getting minerals to market, and we see strong alignment with the administration's wider strategic goals in maintaining this course," she said.

Dr. Harry Verhoeven, senior research scholar at Columbia University's Center on Global Energy Policy agreed, saying that while Africa may not be a priority for the incoming Trump administration, projects like the Lobito Corridor, framed as countering China, are unlikely to be halted.

"In terms of expenditure or political capital, I wouldn't expect the Trump administration to do much on the African front," he said. "The only major African initiatives that are likely to survive are those that can be clearly positioned as countering China."

According to Verhoeven, the new administration must find ways to shift the balance of power away from China regarding control over Africa's mineral wealth. "I hope that the DRC, Zambia, and even Zimbabwe can diversify their export markets away from exclusive dependency on China, but this is easier said than done," he added.

Nick Trickett, senior analyst at S&P Global Commodity Insights, agreed, adding that the Lobito corridor does not appear to be in any immediate danger due to its backing by state-guaranteed credit rather than direct budget expenditures.

"Where Trump may differ, however, is through the adoption of a strong-arm approach with the companies using the route to ensure that supplies are delivered exclusively to the US and its allies, which could increase friction around the project," he said.

Unpredictable

Trickett added that incoming administration's approach to the wider African mineral industry is difficult to predict, noting that Trump's anti-China instincts may give administration officials cover to pursue programs or ideas they think could offset China's position in Africa.

He added that the nomination of Florida Senator Marco Rubio for US Secretary of State, widely recognized as one of the most aggressive China hawks within the Republican Party, suggests that there may be more room for robust pushback against Chinese influence in Africa.

China is decades ahead of the US and EU with respect to its investment and diplomatic engagement on the African continent. Much of this effort has been concentrated on Africa's mineral wealth with Chinese companies well ahead of their Western counterparts in terms of establishing and solidifying their supply chains for cobalt, lithium and other critical minerals.

Platts, part of S&P Global Commodity Insights, assessed battery-grade 20.5% Co cobalt sulfate at Yuan 26,000/mt DDP China on Dec. 2, flat day on day but up Yuan 300/mt week on week.