Sabi: US - China trade war could unlock opportunity for Africa's informal miners
The Co-Founder and President of Sabi, Ademola Adesina says the gap in the U.S critical mineral strategy is that it fails to address the long game of domestic production and the tariffs will exacerbate the problem, as China's retaliation through export controls will make it more complex for American buyers of African minerals. He further adds that this complexity creates an opportunity for informal African miners who have long been left out of the large corporate supply chains. Ademola Adesina joins CNBC Africa for this discussion.
Thu, 10 Apr 2025 11:51:00 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- African merchants, miners, and U.S. companies can benefit from U.S. policy shifts by reevaluating supply chains and moving closer to the source of production in Africa.
- The exclusion of critical minerals from U.S. tariffs will likely lead to increased processing capacity in Africa, enhancing value capture for local miners and suppliers.
- Efforts to organize and formalize Africa's informal miners can integrate them into secure global supply chains, opening up new opportunities for partnerships and market access.
The tensions between the United States and China have opened up a window of opportunity for Africa's informal miners. Ademola Adesina, the Co-Founder and President of Sabi, highlights how recent U.S. policy moves, including the new U.S. minerals strategy and the White House executive order on tariffs, could potentially benefit African merchants, miners, and U.S. companies. Adesina points out that American companies will now have to reevaluate their supply chains and move closer to the source of production in Africa to offset the financial and logistical impact of these new policies. This shift is expected to create new demand for transparent mining operations, increase mineral production on the continent, and encourage ethical partnerships for mineral sourcing.
Furthermore, China's response to the U.S. tariffs will likely lead to more processing of minerals on the African continent. Adesina predicts that the exclusion of critical minerals from the tariffs will necessitate additional processing capacity in Africa as American companies seek alternatives to Chinese supply chains. This move towards more local processing is expected to enhance value capture for African miners and suppliers. Adesina also emphasizes the importance of traceability in the supply chain, highlighting Sabi's efforts to centralize traceability processes and ensure transparency for buyers.
Despite the fact that a significant portion of Africa's mineral trade is still informal, Adesina believes that organization and formalization are key to integrating these informal miners into secure global supply chains. He cites examples of government initiatives in Nigeria and Zimbabwe that aim to organize informal miners into licensed cooperatives, enabling them to sell their minerals to global players. Adesina also notes the presence of big global players in African mining countries, signaling a structural shift in the control of value in the supply chain.
In conclusion, the U.S. - China trade tensions have inadvertently created an opportunity for Africa's informal miners to step into the spotlight and play a significant role in the global mineral supply chain. As the landscape of mineral production and trade continues to evolve, African miners stand to benefit from increased demand, closer partnerships with U.S. companies, and a growing emphasis on ethical and transparent practices.
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