The governments of the United States and Saudi Arabia are reportedly “in talks” to obtain Africa-mined metals for electric vehicle battery production, the Wall Street Journal reports, citing people familiar with the matter.
What’s currently known about the negotiations?
The Biden Administration apparently aims to cut its reliance on China for EV-related supplies, with plans to eventually beat it in the global industry. Meanwhile, the kingdom aims to acquire global mining stakes worth $15 billion to bolster its mining industry, Reuters reported.
According to the report, a kingdom-backed business intends to purchase $15 billion in mining assets in African nations. It includes Guinea, Namibia, and the Democratic Republic of Congo.
It reportedly intends to allow US-based companies to source their supply for electric vehicle battery production in the planned acquisition.
What’s the big deal?
The White House is aggressively working to ultimately cut its reliance on foreign imports, particularly from China. It is part of the government’s efforts to boost its economy and expand its domestic electric vehicle supply chain.
The US aims to level with and eventually surpass China in cobalt, lithium, and other mineral for power batteries.
Therefore, the partnership can significantly aid the country’s push to establish a strong and reliable supply network locally.
Meanwhile, Saudi aims to strengthen its mining industry to generate more income as the world shifts to more sustainable technologies. Global companies are currently racing to secure sufficient supplies to keep their production running.
That said, the partnership can also support the kingdom’s objectives with its mining and electric vehicle industries.
Previous initiatives
The US implemented the Inflation Reduction Act last year to promote electric vehicle adoption and the clean energy transition. The legislation primarily aims to encourage the domestic production and sourcing of electric vehicles and their components.
That said, the US EV industry is gradually reducing its imports as more automakers establish local operations.
Meanwhile, Saudi Arabian Mining Co (Ma’aden) and the Saudi Public Investment Fund (PIF) purchased a 10% stake in Vale’s base metal subsidiary in Brazil in July. Meanwhile, US investment company Engine No. 1 obtained a 3% stake.
According to the publication, PIF tapped Congo a month prior for cobalt, copper, and tantalum investment through the $3B joint venture with Ma’aden, Manara Minerals.
For context, Manara concentrates on critical minerals for power batteries, including iron ore, lithium, and nickel.
See Also:
- Mercedes-Benz to secure critical minerals with Rock Tech’s first lithium refinery in Germany
- US and Japan partner on EV battery minerals to lessen reliance on China
- Western Australia: A global battery and critical minerals hub
- JAC Group and HiNa Battery introduce groundbreaking sodium-ion battery
- Tesla Chair urges Australian Government to support more domestic battery refinery projects
The US Government is actively pursuing financing prospects from other sovereign-wealth funds in North America. It is also worth noting that the negotiations have reached their farthest level since talks began, the publication indicated.
All that said, this potential partnership can significantly aid both country’s clean energy transition. It will also solidify its supply chain for electric vehicle and battery production, which is expected to grow continuously in the coming years.
