US gathers resource-rich nations to push minerals security pact

The Biden administration plans to use a gathering of resource-rich nations to spur new investment as part of its bid to shift the rare earth minerals supply chain away from China.

The Minerals Security Partnership between the US, EU, Japan and other wealthy nations is holding a ministerial meeting with nations possessing minerals such as lithium, manganese and cobalt at the United Nations General Assembly on Thursday.

Participating developing countries include Argentina, Brazil, Chile, the Democratic Republic of the Congo, Indonesia, Mongolia, Mozambique, Namibia, the Philippines, Tanzania and Zambia. US Secretary of State Anthony flash should lead the meeting

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Launched in June, the initiative aims to steer investment into developing countries with mining projects that meet stricter environmental, social and governance standards.

“We created this to address a supply chain vulnerability that we have long known to exist,” said the Under Secretary of State Jose Fernandez said in an interview in New York. “But the pandemic has taught us that these vulnerabilities need to be addressed and minimized. And what we hope is to move forward with investments, financing and other arrangements.”

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The critical minerals supply chain is still almost entirely dominated by China, which controls most of the market for processing and refining minerals such as cobalt, lithium and other rare earths.

“It’s about offering options,” Fernandez said when asked if the partnership was a strategic initiative against Beijing. “If we succeed, the Chinese will win too, and that will benefit the producing countries.”

The minerals initiative could also get a boost from recent legislative efforts in Washington. Fernandez referenced a recent trip to lithium-rich Mexico last week, where he told local officials that “now is the time to partner” on projects that could benefit from tax credits under the Biden administration’s inflation-mitigating law.

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“There is momentum — the funding being provided by the IRA is significant,” Fernandez said. “It should allow us to promote responsible production of critical minerals in a way that supports ESG goals.”

In the coming months, the US intends to continue meeting with mineral-rich nations and identify some of the early mining projects to benefit from the Mineral Security Pact.

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