DFC CEO, Scott Nathan, appointed to his position in February 2022 by President Joseph Biden, told the summit that in-country beneficiation of minerals, particularly the highly sought-after battery metals required for the global energy transition, was appropriate.
The DFC engages in both debt and equity investments outside the US and has an $11 billion portfolio in Africa, with transactions of $1 billion under consideration this year.
“The idea of capturing your own resources is something that governments should be doing and that’s a principle we strongly endorse,” he said during a high-level dialogue on mineral value chains on Wednesday. “It benefits the world, for example in critical minerals required for the next phase of the energy transition. “For these to be shipped in raw form and processed somewhere far away is not good for the environment, the communities and it is not efficient.”
Nathan said the world could not afford a situation where as it tackles energy and climate challenges, the resources required for these solutions are “captured by one country”. He said it was in the interests of the whole world to have greater diversification of the supply chain for these critical minerals, adding that it did not serve the interests of the world to have one country dominate any part of the value chain, especially the processing.
“That will require elements such as infrastructure and good governance. “In infrastructure, it is critical for the US to develop these resources in partnerships, to a high standard and quality, from a social, government point of view, from labour standards, respect for local conditions and customs. “This takes time,” he said.
Countries such as the US and Canada, as well as blocs such as the European Union, are building partnerships with Africa for minerals required for the energy transition. More countries on the continent have stepped up their beneficiation policies to require that miners process more of these minerals in-country, to unlock value chains that could boost their industrialisation.
“These projects cannot be done quickly or short-cuts taken; it takes work,” said Nathan. “That will make the development of these resources add value for the people who own them and make them beneficial to the world. “The US and the DFC are highly interested in working together with partners to find ways to provide funding for the benefit of local producers of these minerals that are beneficial to the whole world.”
Delivering the keynote address at the Summit’s official opening, President Mokgweetsi Masisi said that enhancing Botswana’s position in value chains in the global market is a key priority for his government as Botswana has acute challenges in catching up with the industrial pace of the world.
“As the world’s largest producer of gem diamonds by value, it is imperative that we develop value chains for raw materials to allow for greater value addition, spur innovation and growth, adapt to climate change, build sustainability, deepen economic diversification, and create opportunities for exploitation of global supply chains,” he said.
The US delegation to the summit includes leading investors that represent over $2 trillion (P26.4 trillion) in assets, who are searching for investment and trade deals with the private sector in Botswana and elsewhere on the continent.
The gathering in Gaborone follows the US Africa Leaders’ Summit held in Washington DC last December, where $15 billion in commitments were made by business and government leaders, as well as an additional $8 billion in private sector commitments.
On Wednesday, the US delegation announced that since December Summit, the Biden-Harris Administration had helped close 75 new deals between the US and African countries for a total estimated value of $5.7 billion in two-way trade and investment.
