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US bid for battery metals has Africa in a tight spot

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Mining companies and governments in Africa are calling for stronger trade ties with the US after a new climate law set out incentives for US carmakers sourcing battery materials from trade partners.

The $430bn Inflation Reduction Act has been criticised by the EU and South Korea, who say it could hurt their car industries.The US has a free trade agreement in place with only one African country, Morocco. Yet the continent is a key copper producer and the Democratic Republic of the Congo produces most of the world's cobalt.

Under the IRA, US carmakers will get tax credits if they source at least 40% of battery materials domestically or from American free-trade partners. This risks carmakers replacing Congolese cobalt with Australian, Canadian, Moroccan or US cobalt. A spokesperson for the US Trade Representative said “we look forward to discussing ways to strengthen and deepen our trade and investment ties with our partners throughout Africa” during the summit.

 

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