Why the United States must support critical mineral exploration in high-risk countries

White House energy adviser Amos Hochstein said this week that the United States needs to provide support to Western companies reluctant to extract critical minerals in dangerous jurisdictions.

“We all live in capitals and cities around the world and can say, ‘We don’t want to do business there.’ But what you’re really saying is that the energy transition isn’t going to happen. “, Hochstein said at the Milken Institute World Congress.QuoteAccording to Reuters.

“Because if I can only produce energy where I live under my standards, the energy transition will not happen,” he added.

Energy transitions require large amounts of metals and minerals. Some of these are concentrated in jurisdictions such as the Democratic Republic of the Congo, where Western miners are wary of access.

Other politically unstable mineral-rich countries are also potential sources of transitional materials, but Western miners are reluctant to go in and start exploiting their resources.

At a Milken Institute event, Hochstein accused banks of contributing to this reluctance that he believes could harm the U.S. transition.

“If you want to invest in Angola, like Chile, Peru, Ecuador, Mexico, Congo, Zambia, Democratic Republic of Congo, these are countries with different profiles with different types of risks. “We won’t be able to absorb this risk,” he said.

To remedy this, Hochstein proposed that capital flow through state-owned institutions such as the U.S. Export-Import Bank and the U.S. International Development Finance Corporation, as well as the World Bank and the International Monetary Fund.

“The real role of government here is to encourage private capital by taking more risks in this initial work in a responsible way, but also to allow the private sector to come in, build it up and invest. “By allowing us to take more risks and diversify our investments, we can create a sustainable and fair energy transition,” he explained.

Written by Irina Slav for Oilprice.com

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