The return of President Trump to the White House has been subject to much speculation, with market participants questioning how the incoming Republican administration will approach critical minerals projects in Africa
The Critical Minerals Africa Group (CMAG) the advocacy group seeking to foster deeper relations between Africa and global markets and put Africa at the heart of international discussions surrounding critical minerals policy, is working closely with its members and partners to help navigate a potential shift in US policy as President Trump takes office today.
The return of President Trump to the White House has been subject to much speculation, with market participants questioning how the incoming Republican administration will approach critical minerals projects in Africa, as well as other crucial areas including aid budgets and the Lobito Corridor.
Olimpia Pilch, Chief Strategy Officer at CMAG, says that “we can potentially expect an increase in critical mineral project funding from the US, but this will depend on several factors, including the rate at which US domestic sources can be unlocked, trends in real-time demand, GDP growth in the US, and the availability of cheap ore from other jurisdictions.”
“The key guiding principle for the incoming Trump administration will be security. Critical minerals projects that feed into US defence supply chains, speciality alloys, and other sectors deemed of national importance will stand a far better chance of accessing US government funding that those falling under a “green” or “energy transition” banner, which were prioritised by the Biden administration,” Pilch says.
“A greater security focus will throw a spanner in the ambitions of many African nations looking to process and refine more critical minerals on the continent. US entities are unlikely to accept the high risk of multi-billion refinery investments in volatile regions that often lack key ingredients for commercial success – cheap and reliable energy, well-maintained infrastructure, skills and expertise, favourable taxation, and stable governments,” she adds. “Given the intensification of US-China competition, regions with overt Chinese influence are also less likely to attract US private sector investment.”
“However, ample opportunities to move further down the value chain will remain, especially when it comes to producing critical mineral concentrates. Relatively more stable nations such as Botswana, Rwanda, Namibia, and Ghana stand to benefit provided their governments are willing to play by the Western rules of deal-making.”
Veronica Bolton Smith, CMAG’s CEO, says “CMAG is working closely with its members to ensure a smooth transition as companies exposed to African critical mineral supply chains seek to determine if and how the new administration will change the picture for the industry.”
“One of CMAG’s key priorities is to bridge the gap between Africa and Western markets with the aim of catalysing value for both sides. We will be working closely with our partners in the US and on the continent to bring about mutually beneficial outcomes under this new administration and beyond.”
Source: APO Group on behalf of Critical Minerals Africa Group (CMAG).
