This week’s newsletter focuses on mining across different regions. Argentina is competing with neighboring Chile and Bolivia for lithium investment, but the provinces, not the government, own the reserves. Cote d’Ivoire boasts yet another major discovery, and this time, it’s golden. Lastly, in our very own United States, the DOE just declared critical mineral mining eligible for federal funding. Read more below!
Argentina’s Lithium Sector is a Provincial Matter
Together, Argentina, Bolivia and Chile hold more than half of the world’s lithium reserves. Yet, each country has faced its respective struggles in developing the sector. Chile has the advantages of a long mining history (mostly in copper) and an attractive investment environment but is tripping on regulatory hurdles from 40-year-old nuclear policies. Bolivia has already established a state-owned lithium company and has been signing contracts (mostly with Russia and China). However, without a solid legal framework, the way forward is unclear.
In Argentina, the issue stems from the 1994 Constitution, which gave individual provinces ownership of their natural resources. So, when former Presidents Alberto Fernandez and Cristina Kirchner tried to form a “national lithium strategy,” the provinces pushed back, unwilling to give up control (and/or profit). While current President Javier Milei is relentlessly pro-market, he is short on political allies and unable to change the Constitution. As such, the development of Argentina’s lithium sector will remain in provincial hands, though the governors are eager to cash in. Marcelo J. García, Horizon Engage’s Director, Latin America says the path forward in the Lithium Triangle may be counterintuitive.
Cote d’Ivoire Strikes Gold
Cote d’Ivoire is on a roll: Following significant oil and gas discoveries in recent years, Canada-based Montage Gold just announced a large gold discovery in the northern Kani and Dianra departments. The project, named Kone, is set to become the third-largest gold mine in West Africa. This spells good news for Cote d’Ivoire for a number of reasons: More development in the north will help combat jihadist recruitment (currently very active) and diversify the economy away from cocoa. Once the new deposit begins production, gold output and mining’s contribution to GDP will get a significant boost.
The discovery, however, does increase the probability of President Ouattara seeking a fourth term in the 2025 elections. As the recent discoveries will almost certainly significantly increase Cote d’Ivoire’s finances in the next 5-10 years, he will not be keen to give up power. Keep in mind that Ouattara is already in his (unconstitutional) third term. Should he decide to run again — and he’d likely win — civil unrest will almost certainly follow.
Mining Critical Minerals in the US Just got Easier
The US Department of Energy clarified that mining critical minerals qualifies for federal funding programs previously believed to only apply to renewable energy. This confirms the Biden administration is prioritizing critical minerals on the same level as the energy transition, but it is a complicated issue.
First, the supply chain for critical minerals lies almost entirely in China, and overreliance is a bit of a security risk. Second, mining critical minerals is not exactly great for the environment. Still, critical minerals are essential to the energy transition and achieving net-zero emissions on national and global levels. You can’t make a net-zero omelet without mining for a few critical mineral eggs. However, the DOE was sure to note that environmental reviews — which Biden recently tightened the regulations for — still apply. That said, they will leave with him should he lose the presidency in November.
Quote of the Week
This week’s quote comes from Nigeria (to no one’s surprise). Gov. Siminalayi Fubara slammed the Rivers State House of Assembly members for their alleged poor attitude toward his administration. In a press conference, the governor said: “I have to make a statement that they are not existing. Their existence is me allowing them to exist. If I de-recognize them, they are nowhere.” We take it he will not be holding exit interviews…
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