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(As prepared)

Good morning.  I’m so pleased to return to Mining Indaba in South Africa.  Good to see the faces of so many people I’ve engaged with in the last few months.  Thank you for inviting me again.  I offer my greetings to the many heads of state, ministers, corporate leaders, and other distinguished colleagues in attendance.

At last year’s Indaba, I was privileged to speak to many of you about the growing demand for critical minerals, the need for diversified, secure, and transparent supply chains – and the need to set in motion a “race to the top” on environmental, social, and governance – “ESG” – standards.

Since then, my team has been working on these topics, and our assessment of the need for critical minerals has been confirmed.  The International Energy Agency [IEA] recently predicted that demand for most minerals essential to the clean energy transition will increase by a factor of four to six.  For some minerals, the increase will be exponential.  By 2040, graphite demand will increase by 25 times, and lithium by 42 times.

The IEA has also noted that the pace of adoption for renewable energy is accelerating dramatically around the world.  That acceleration means we must also look for ways to support recycling of electronic scrap and waste, and we must do it sustainably.  If we succeed, recycling will reduce demand:  by 2040, 10 percent of electric vehicle [EV] battery minerals could come from recycled copper, lithium, nickel, and cobalt.  With EVs expected to command half the global market by 2030, that is a significant amount.

But today we have a problem.  Simply put, not only don’t we have enough critical minerals to power the world’s clean energy agenda, but our current supply chains for these minerals – from extraction to production to recycling – are simply not diverse enough for the energy future that’s coming.  And I don’t need to remind you of what happens when the supply chain breaks down or when we depend on a single supplier.  We lived it during the COVID pandemic, and this is a vulnerability that we need to solve together.

To address these concerns, last June we launched the minerals security partnership (or “MSP”) with a total of twelve partners:  Australia, Canada, Finland, France, Japan, the Republic of Korea, Norway, Sweden, the United Kingdom, the United States, and the European Union.  Today, we are pleased to announce that Italy has joined our partnership.

The MSP will tackle the critical minerals challenge on four main lines of effort:  (1) sharing information about potential projects; (2) promoting investment and financing; (3) adopting high ESG standards; and (4) expanding offtake and recycling opportunities in critical minerals projects.

And in pursing our goals we will enlist both our public and private sectors.

Building on this foundation, the MSP aims to benefit all parties involved and add higher value activities, such as downstream processing and recycling – in addition to extraction.  In pursuing these goals, adherence to high ESG principles will be our calling card.  And in the next few minutes, I’d like to focus on our environmental, social, and governance goals.

Now, you may ask what do we mean by high ESG standards, and why should we care?

Let me address the second question first, because the answer is straightforward:  this is not altruism.  We care because sustainable projects require sustainable growth, because investors demand it and because consumers will insist on it.

You see, experience shows that economic development that only benefits a few – is not sustainable.  During Pope Francis’ visit to the Democratic Republic of the Congo [DRC], he denounced the “economic colonialism” that results in the DRC and others not benefitting from their “immense resources.”  I know that since I’m a Catholic you wouldn’t expect me to contradict his Holiness, but believe me, the Pope has a point.

Through our work on responsible mining, the MSP partners seek to move away from unsustainable development toward a framework that prioritizes transparency, community welfare, and environmental protection.  We want to involve the communities affected by potential projects in the decision-making process.

If you were to say we are doing this to protect our bottom line, then you would be partially right.  We’ve seen too many instances, some going on right now in South America, where community opposition has led to the closure of otherwise profitable mines.

But its not only about profits.  In our meetings with potential private sector partners, it has become clear that our companies will not engage in a “race to the bottom.”  They won’t make investments in projects that destroy precious rainforests, that are not committed to remediation of mine sites, or that require payoffs to government officials.  They won’t do it.  Their shareholders won’t allow it, their customers will reject them, and our laws will punish such conduct.  And they know they can’t win a race to the bottom.

That’s why many companies have joined the United States’ public-private alliance on responsible minerals trading.  We see some companies, such as Tesla, going into the mining business for nickel.  To ensure the stability and transparency of their supply chains, General Motors has made public commitments to sustainable sourcing.  Ford and other car companies have made similar promises.

So that’s why we care.  Now let’s turn to what we mean by ESG.  As the MSP considers potential projects, the partners evaluate how they plan to avoid worsening environmental degradation and social inequality, and how they can involve local communities.  Not only is this the right thing to do, but we also we believe this will result in stronger investment returns.  This is also why we must lead a race to the top.

Projects that do not account for ESG standards often incur increased direct and indirect costs, including from labor disputes, community protests, and adverse effects on the environment and human health.

MSP partners have agreed on a set of ESG principles to guide and help govern project implementation.  We could have tried to come up with a new set of principles, but we chose not to do so.  There is no time to waste to achieve our clean energy goals.  Plus, there are several thoughtful ESG standards already.

Our chosen ESG principles draw from internationally accepted best practices, including from institutions such as the IGF [Intergovernmental Forum on Mining, Minerals, Metals, and Sustainable Development], the World Bank Group, EITI [Extractives Industries Transparency Initiative], and the Organization for Economic Cooperation and Development, among others.

MSP partners have agreed that MSP projects will insist on environmental stewardship; ethical land acquisition; community involvement; just labor conditions; country and community benefits; and transparent business operations.  As long as a project meets these fundamental criteria, the project will be considered.

The projects must also follow good governance practices and the rule of law, include capacity building for the workforce, and demonstrate a plan for sustainability.

Those are the principles we will insist that MSP partner companies abide by, and to make sure that our aims are clear, and that we are held to them, we will make our standards public in all their detail.

Let’s turn now to another concern we’ve heard in Africa and elsewhere.  During their meetings with MSP partners, producing countries have emphasized their desire for investment in all stages of the critical minerals and battery materials value chains – not just mining, but also refining, battery production, and recycling.  That makes all the sense in the world.  We agree, and that’s why half of the projects the MSP is considering today involve varying levels of processing beyond extraction.

ESG principles are a fundamental piece of the partnership’s value proposition, but that’s not all we have been focusing on.  We are also planning the investment, financing, and recycling part of our mission, and we have much to build on.

For example, the United States recently signed a memorandum of understanding with the DRC and Zambia to help them establish a new supply chain for EV batteries.

In addition, the U.S. Export-Import Bank recently announced it will expedite review of critical minerals projects under its Transformational Exports Program, which is funded for up to $27 billion through 2026.

We’ve also focused on enlisting our private sectors.  During the United Nations General Assembly, Secretary Blinken highlighted the actions of a mine in Africa with a U.S. and Australia nexus, which employs hundreds of local workers, contributes millions of dollars in community development, and undermines the aims of those who would sow conflict.

The Secretary’s example illustrates the spirit of the MSP and highlights our broader efforts.  The United States, for one, has been working to build capacity in the mining sector in 20 countries over the past decade and a half.  We have been training small-scale miners and other stakeholders in processing technologies that better protect them, their communities, and the environment from toxic pollution.  In Africa, we are working with small-scale miners in the DRC, Ghana, and Mali to formalize the sector, introduce ESG standards, and remove toxic chemicals from the extractive process.

We are also working to improve collaboration between large- and small-scale miners.  Our work brings higher returns on investment, particularly for small-scale miners, because their mineral recovery increases with newer and more environmentally friendly methods.

Finally, we are also teaming with the scientific community and industry groups.  One of our national labs – Li-Bridge, which supports our goal of bridging the gap in the lithium battery supply chain, recently formed a partnership with the European Battery Alliance, and brings together stakeholders from the public and private sectors to accelerate the development of robust and sustainable supply chains of critical materials.

We look forward to the outcomes of all of these efforts to inform future MSP projects.  And to be clear, our commitment is not limited to extraction – we want to support minerals producing countries to build enabling environments for investment throughout the supply chain, all while raising ESG standards.

So, after six months, where does the MSP stand?  What have we achieved?

I can give some examples of what MSP partners are working on, without going into too much detail:

MSP partners have collectively looked at over 200 projects in the last quarter of 2022.  Based on the criteria I outlined, we winnowed that list down to about a dozen for further review and partner engagement.  We are working with other allies and contributors on the enabling conditions – such as governance and transparency – that will make these projects more competitive.

These proposals hit all stages of the supply chain, including smelting and recycling, and offer a different value proposition – one based on working in partnership with governments, local citizens, and other stakeholders.

Along these lines, MSP partners and interested countries have begun to apply MSP principles to their activities in the critical minerals sector.

For example, two East Asian countries are creating a critical minerals and metals cooperation center, where one country will share technical expertise with the other.

In the Pacific, minerals production is booming, and a couple of partners are working to develop battery materials and attract transparent investment and trade.

We are also looking at midstream processing in two key countries (one in Africa and the other in Latin America) that could revolutionize their workforce development.

MSP partners are also assembling a public-private consortium to develop a state-of-the-art processing facility in Latin America, to form a complete value chain in the region.  If we succeed, it will show how sustainability and the circular economy can be part of the project design from day one.

Another MSP partner has launched a strategy to incentivize the growth of battery recycling and create a closed-loop supply chain for battery manufacturing.  And recently, a transport company in that country announced that it is building a lithium-ion battery recycling plant for end-of-life EV batteries.

And finally, a couple of Nordic countries that have expertise in recycling have offered that expertise to interested partners.

In short, since our announcement over the summer, we’ve been hard at work, and for that I’d like to thank our partners, who have made the MSP a key piece of our common international agenda.  As a U.S. government official, let me close by quoting President Biden at the Africa Leaders Summit in December:  “we are all in on Africa.”

We are all in on mutually beneficial engagements.  We are all in, not only on critical minerals, but on supply chains, public health, food security, and sustainable development.  We are all in.

And so, I would be remiss if I didn’t mention that in 2023, we are marking the 20th anniversary of the President’s Emergency Plan for AIDS relief, or “PEPFAR.”  Started by President George W. Bush in 2003, PEPFAR has been the largest commitment by any nation to address a single disease in history.

Since PEPFAR’s inception in 2003, the U.S. government has invested over $100 billion in the global HIV/AIDS response in more than 50 countries, mostly in Sub-Saharan Africa, saving over 20 million lives, and preventing millions of HIV infections.  It continues to this day, and there is no achievement, no initiative, of which we are more proud.

What PEPFAR and the Minerals Security Partnership have in common is countries banding together to confront a global challenge – in this case the clean energy transition – in which we all have a part to play and all partners can benefit.

It has been less than a year since the United States launched the MSP, and I’m proud to acknowledge how far we have come.  But we are just getting started.  Our goal for 2023 is to build partnerships, finalize deals, and to engage more with all of you.

With MSP, we are placing a bet on our convictions that producing countries want partnerships that bring benefits, our companies will not race to the bottom, and consumers demand high ESG standards.  The MSP partners want to help companies realize that adherence to high standards will be good for business.

Next year, when we return to Cape Town, with your support, for the sake of our planet and our communities, let’s make sure we have something to celebrate.  Thank you.

U.S. Department of State

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