Mining magnate advocates for price reinforcement to counteract China's supreme control over vital minerals
In the aftermath of the G7 summit last month, discussions among Western governments and alliances, such as the G7 and the Quad, have intensified around strategies to secure and diversify critical mineral supply chains. This shift comes in response to growing concerns over reliance on China, and the risks associated with economic coercion, price manipulation, and supply chain disruptions.
One of the leading figures in this drive is Neal Froneman, the CEO of Sibanye-Stillwater, a prominent platinum producer. Froneman has called for price guarantees from Western governments to help compete with Chinese rivals who receive state support. Sibanye-Stillwater, under Froneman's leadership, has expanded into battery metals in response to the rising demand due to electric vehicles and the energy transition.
Sibanye-Stillwater has chosen not to be a contract miner for the Chinese and has instead focused on serving customers in the West. The company's strategic moves have been backed by significant investments, such as a €500mn loan for its Finnish lithium project last year and funding from Finland's Export Credit Agency, the European Investment Bank, and other funders. Sibanye's GalliCam project in France received funding from the EU Innovation Fund, and it has been selected for a €144mn grant from the EU Innovation Fund.
The company's US operations, however, have incurred writedowns. Despite these challenges, Sibanye's projects in the US have received tax credits worth up to $60mn this year. Sibanye also has a lithium project in Finland and a nickel refinery in France.
Industrialized nations have expressed alarm over China's dominance in the production and processing of critical minerals. As a result, both the G7 and the Quad have pledged to develop "standards-based markets" for critical minerals, which could potentially lead to a joint buying pool.
While these initiatives emphasize supply chain resilience, investment in new mining projects, and enhanced processing capacity, specific mechanisms for price guarantees or joint buying have not been explicitly detailed in recent official statements. The European Union has discussed collective procurement as a potential tool for critical raw materials, but no concrete joint buying mechanisms have been implemented yet.
The challenge lies in the need for robust processing facilities outside China, which are currently limited. The US is supporting infrastructure and economic frameworks in mineral-rich regions like the DRC and Rwanda to ensure transparent and competitive supply chains, but again, not through direct price guarantees or joint buying.
New frameworks, such as those proposed in Central Africa, aim to formalize supply chains and attract investment, potentially paving the way for joint procurement models in the future. Several Western countries are also prioritizing the establishment of rare earth processing plants, which is seen as a necessary step before joint buying or price guarantees can be effective.
In summary, Western governments are actively pursuing strategies to secure and diversify critical mineral supply chains, investing in new mining and processing projects outside China. Joint buying mechanisms and price guarantees are under discussion but have not been implemented in formal policy yet. The establishment of processing facilities in the West and allied countries is seen as a prerequisite for more robust procurement strategies. These efforts are driven by concerns over Chinese dominance and the need for secure and resilient supply chains for critical minerals.
References: [1] "G7 Leaders' Declaration," G7, July 11, 2021, [2] "Quad Leaders' Statement," White House, September 24, 2021, [3] "Quad countries commit to secure critical minerals supply chains," Reuters, September 24, 2021, [4] "The race to secure Europe's critical minerals," European Parliament, March 17, 2021,
- The CEO of Sibanye-Stillwater, a significant player in the battery metals industry, has appealed for price guarantees from Western governments to compete with Chinese rivals who receive state support.
- Industrialized nations, including those part of the G7 and the Quad, are considering the development of "standards-based markets" for critical minerals, which could potentially include a joint buying pool.
- Sibanye-Stillwater, a key player in the energy transition, has been supported by substantial investments and funding for its projects outside China, but its US operations have faced challenges.
- To secure and diversify critical mineral supply chains, Western countries are focusing on the establishment of robust processing facilities outside China, seen as a necessary step before implementing joint buying or price guarantee mechanisms.
