In a bid to challenge China’s dominance in the African minerals market, the U.S. is reportedly adopting new strategies to secure critical minerals from countries like Zambia, Guinea, and the Democratic Republic of Congo (DRC).
Offtake Deals Target DRC Cobalt, Copper
The U.S. is employing offtake deals and state-backed funding to compete with China in the short term, reported Reuters on Monday. The DRC, the world’s largest cobalt supplier, is a primary focus for the U.S., which is also looking to secure copper from Zambia and Guinea.
Rather than deploying U.S. operators in high-risk countries, the U.S. is favoring offtake agreements and other trading arrangements, including deals with Congolese state miner Gécamines and Mercuria, to funnel output into U.S.-aligned value chains currently dominated by Chinese refiners.
Both the U.S. and China are anticipated to pursue new agreements at this week’s Indaba mining event in Cape Town, with the U.S. engaging officials about its minerals bloc.
Trump’s Critical Minerals Strategy
Trump administration has been undertaking several new approaches to secure critical minerals to loosen China’s stronghold. Earlier this month, the U.S. announced plans to coordinate with the EU, Japan, and Mexico on critical minerals, stabilize prices, and secure supply chains. Trade measures, including border-adjusted price floors, aim to protect against market volatility and subsidized Chinese production, paving the way for a future plurilateral trade agreement.
In January, President Donald Trump decided to hold off on imposing tariffs on rare earths, lithium, and other critical minerals. Instead, he directed his administration to seek solutions with international trading partners following a security review.
Earlier this month, Trump launched Project Vault, a massive $12 billion public-private initiative designed to shield the U.S. economy from global resource fluctuations. By offering long-term financing, the government is reducing risk in the volatile rare earth market, ensuring U.S. manufacturers have domestic access even if China limits exports.
Price Action: Sprott Critical Materials ETF (NASDAQ:SETM) and VanEck Rare Earth and Strategic ETF (NYSE:REMX) climbed 14.06% and 12.83% year-to-date, respectively.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock/ Studio Romantic
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