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U.S. reducing reliance on Chinese, Russian supply chains

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Africa boasts minerals critical to energy transition

By Joe Bavier

MARIKANA, South Africa, March 14 (Reuters) - The United

States is looking to Africa to help loosen a Chinese

stranglehold on battery metals and reduce Russia's influence

over the market for other minerals, U.S. Deputy Treasury

Secretary Wally Adeyemo said on Thursday.

Coronavirus pandemic fallout and Moscow's war in Ukraine

have sent Western governments scrambling to reduce their

reliance on Chinese supply chains and disentangle their

economies from Russia.

But as Washington plots a course for its energy transition

it is lagging behind China, which has spent the past decade

securing access to minerals needed for the production of

products like electric vehicle batteries and solar panels.

"We don't want to be overly reliant on any one country or

any one company for global supply chains for critical minerals,"

Adeyemo told Reuters during a visit to a platinum mine in

Marikana, South Africa, owned by Sibanye-Stillwater.

While the U.S. government has launched a raft of measures to

incentivise increased production of strategic and critical

minerals at home, notably under the Inflation Reduction Act,

Adeyemo acknowledged that overseas resources were also vital.

"Africa is going to play a huge role," he said. "A lot of

critical minerals are located here."

Chinese assets in Africa already include massive copper and

cobalt projects in Democratic Republic of Congo and Zambia as

well as lithium in Zimbabwe, where companies are assisted by

heavy Chinese state investment in accompanying infrastructure.

Adeyemo said the United States was working with G7 allies to

close that infrastructure gap.

The U.S. International Development Finance Corporation is,

meanwhile, aiming to de-risk private investment in Africa. And

the deputy secretary said Washington was incentivising U.S.

manufacturing to boost demand for those minerals and create

favourable market conditions for miners.

But he added that the White House also stood ready to ensure

a level playing field.

"We are talking to our European allies ... about some of the

actions we can take using trade tools to make sure that a

country like China can't flood the market with things like

electric vehicles and solar panels," he said.

HOLD ACCOUNTABLE

Regarding Russia, Adeyemo said countries like South Africa

also had a role to play.

In the wake of Moscow's 2022 full-scale invasion of Ukraine,

the U.S. government slapped sanctions on a number of Russian

miners and mineral exports. But it left Russian platinum group

metals (PGM) largely untouched.

The United States is a major consumer of palladium, a PGM

used in catalytic converters, with 32% of its imports of the

metal coming from Russia between 2019 and 2022, according to the

U.S. Geological Survey.

"South Africa has a real opportunity to help supply the

global economy," Adeyemo said. "And it gives us the ability to

take other actions to hold Russia accountable."

South Africa is a major palladium producer, and

Sibanye-Stillwater mines the metal both in Marikana and at a

U.S. project in Montana.

"Between what comes out of South Africa and what's produced

in the U.S., the U.S. does not need to be dependent on sources

from any other country," CEO Neal Froneman told Reuters.

However, he said companies like his needed U.S. government

support.

"You can provide loans or introduce tariffs or whatever

it might be," he said. "That is a role that they need to think

very differently about and help companies that are trying to

source and provide these critical metals into those ecosystems."