The United States must provide support to Western companies that are reluctant to mine critical minerals in risky jurisdictions, energy advisor to the White House Amos Hochstein said this week.
“We can all live in the capitals and cities around the world and say ‘I don’t want to do business there.’ But what you are really saying is we’re not going to have an energy transition,” Hochstein said at the Milken Institute Global Conference, as quoted by Reuters.
“Because the energy transition is not going to happen if it can only be produced where I live, under my standards,” he added.
The energy transition will require massive 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 treading.
Other mineral-rich countries that are politically unstable are also potential sources for transition materials but Western miners are reluctant to go in and start exploiting their resources.
At the Milken Institute event, Hochstein slammed banks for contributing to this reluctance that could, it seems, cost the U.S. the transition.
“If you want to invest in, whether it’s Chile, Peru, Ecuador, Mexico, Congo, Zambia, DRC, etc, Angola – these are different profile countries that have different kinds of risks associated with them. And Western finance has basically said we will not be able to absorb this risk,” he said.
To remedy this, Hochstein suggested that capital flows through state-owned entities such as the Export-Import Bank of the United States and the U.S. International Development Finance Corporation, as well as the World Bank and the International Monetary Fund.
“The government has a real role here of incentivizing private capital by taking more risk in this initial work, in a responsible manner, but more risk to allow the private sector to come in, augment it and allow the investment so that we have a diversified, sustainable and equitable energy transition,” he explained.
By Irina Slav for Oilprice.com
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