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A US-led coalition of countries is looking at funding more minerals projects using a financing network aimed at combating China’s dominance of metal supply chains.
The Minerals Security Partnership has already announced support for 13 projects since the collaboration began in 2022 and it’s looking to streamline efforts to turn more into reality, Jose Fernandez, a top US State Department official, told Bloomberg.
He said development finance and export credit agencies from 14 mostly western nations and the European Union will work with private industry to fund the additional 32 projects amid a downturn in prices for key metals.
“If we can get half of those done in another year and a half, it’ll be great,” said Fernandez, who is under secretary of state for economic growth, energy and the environment.
The partnership was created to counter Chinese control of mineral supplies deemed essential for technology and clean energy applications. China controls much of the world’s processing of critical minerals used in a range of goods including electric vehicles and wind turbines to missile guidance systems.
One of the drivers behind the latest move is a desire to speed up approvals, according to Fernandez.
“Companies are telling us they’re losing out on tenders — they’re losing out on projects because they complain about the paperwork,” he said. “We need to supercharge this effort because we’re running against the time crunch.”
Quicker seed financing was needed to combat Chinese companies that have flooded the market with minerals such as lithium and cobalt and caused prices to fall despite rising demand, Fernandez said. He said the low prices benefit manufacturers of batteries and hi-tech equipment in the short term, but discourage development of new sources of the minerals.
“In the long term, we’ve created an over-dependence on oversupply that, as we’ve learned in history, will come back to bite you,” he said.
Finance and credit institutions from the group, which includes the International Development Finance Corp. and the US Export-Import Bank, will streamline the process for approving projects while countries will also coordinate to avoid duplication of work and targeting the same projects.
“We shouldn’t all be chasing the same dog,” he said.
(By Michael J. Kavanagh)
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