High-Level Dialogue: Mining and Critical Minerals
Africa is actively looking to leverage major shifts in energy and manufacturing to increase its integration into global mining value chains for both traditional and critical minerals while increasing the benefits in terms of jobs and economic development for local populations. The Prime Minister of Madagascar and a distinguished panel discussed the challenges involved in achieving the vision that countries like Madagascar have to leverage mineral assets to support development.While there is no one-size fits all solution, governments and companies need to work together to make sure all the right elements are in place to allow these resources to be developed. That ranges from having required energy and transportation infrastructure in place to workforce development to putting in place the right kinds of policies to support investment. Both companies and governments need clarity in terms of what the other side needs to make investments work. It is also important for companies that government policies remain transparent and predictable,particularly given that mining projects typically take 15 years to go from ‘pit to port.’ While China has already established a significant presence, it is not ‘too late’ for U.S. companies to increase their presence in Africa. Entities like the Development Finance Corporation are working closely with the private sector to develop a mineral by mineral approach to creating the right value chains to make projects happen. One aspect that companies and governments can pursue to make future projects more successful is to take a regional and continental approach, rather than looking at just one country, recognizing the important changes that the African Continental Free Trade Agreement and other policies have introduced. Governments can support faster development by implementing policies that support vertical and regional integration. Companies and governments should also target increasing the share of exploration budgets dedicated to Africa, which currently represent 10% of global expenditure, far short of Africa’s 30% of global mineral resources.
