Donald Trump’s administration has taken a major stake in an African copper mine amid a scramble for mineral resource supremacy over China.
On Tuesday, a fund backed by the US government acquired a 40pc stake in two Democratic Republic of Congo mines from industrial giant Glencore.
Glencore’s partial sale of the venture to Orion CMC, which is backed by the US International Development Finance Corporation, puts a $9bn (£6.6bn) price tag on the copper mining project.
Orion CMC and Glencore said the tie-up will pave the way for more acquisitions of critical mineral projects across the African copper belt.
It comes as Mr Trump bolsters his efforts to build a supply of critical minerals to counter China’s dominance.
On Monday, Mr Trump announced “Project Vault”, a $12bn critical minerals stockpile backed with a $10bn loan from the US Export-Import Bank and $2bn from private capital to aid America’s push to corner vital mineral resources.
The Trump administration’s move to secure natural resources has been a core motivation for the president’s planned takeover of Greenland and his removal of Nicolás Maduro from power in Venezuela.
Last month, the US also signed a major agreement with the DRC to cement economic ties with the resources-rich African state.
Christopher Landau, the US deputy secretary of state, said: “This proposed transaction between Glencore and the US-backed Orion Critical Minerals Consortium reflects the core objectives of the US-DRC Strategic Partnership Agreement by encouraging greater US investment in the DRC’s mining sector and promoting secure, reliable, and mutually beneficial flows of critical minerals between our two countries.”
On Wednesday, delegations from more than 50 countries will also be visiting Washington to attend the critical minerals ministerial meeting to diversify supply chains.
The deal will be the first for Orion CMC, which is a new investment consortium led by Orion Resource Partners.
The agreement comes amid talks between Glencore and Rio Tinto over a £190bn mega-merger to reshape global commodity markets.
Glencore is currently the only major Western producer of copper and cobalt in the Democratic Republic of Congo, a country with a strict quota system for the amount of cobalt that can be exported.
Copper prices have hit record highs so far this year as concerns over supply disruptions have risen. The base metal skyrocketed to over $14,500 a ton in London last week, having only surpassed the $12,000 threshold for the first time in December.
Source: Telegraph