Following a financial setback for one of the world's leading copper producers, the Biden administration has started discussions with potential investors about acquiring a stake in the company’s Zambian mines, which could be worth up to $3 billion.
This effort is not limited to U.S. companies. Entities from the United Arab Emirates, Japan, and Saudi Arabia—countries considered allies of the U.S.—have shown interest in First Quantum Minerals' assets, according to sources familiar with the matter. The main objective is to prevent Chinese dominance and limit the Asian superpower's control over the global supply of essential metals and minerals.
The bidding process, expected to conclude later this year, is part of a global scramble to secure more copper, a vital resource for electric vehicles, power transmission lines, and data centers driving the AI revolution. BHP Group's nearly $43 billion takeover bid for Anglo American, which was rejected, underscores the high demand for copper. Although Anglo American produces various commodities, Australia’s BHP has highlighted its focus on the company’s copper assets. Despite BHP’s initial offer being turned down, other companies are reportedly considering competing bids.
On Tuesday, Anglo American unveiled its own strategy shift, announcing plans to divest from its platinum, diamond, and steelmaking coal businesses, thereby emphasizing copper's central role in the company’s future. CEO Duncan Wanblad stated that the company aims to expand its copper business through both organic growth and potential mergers and acquisitions.
“Copper is undoubtedly the focus,” Wanblad commented.
While the U.S. government does not directly oversee the proposed deal, officials have conveyed concerns to Anglo executives about how consolidation might limit the copper supply. There is also concern that China might pressure BHP to sell some assets or allocate more copper to Chinese markets to address anticompetitive issues. For the U.S., this rush highlights the significance of its ongoing efforts to secure metals and minerals critical to the green-energy transition.
The demand for copper is expected to rise even as some mines close or reduce production, with copper futures up 20% this year. The U.S. lacks a dedicated mining ministry, a sovereign wealth fund, or a significant domestic mining industry, putting it at a disadvantage compared to China, which can direct state-owned enterprises to invest heavily regardless of commodity prices.
Due to financial constraints, the U.S. government must collaborate with private companies domestically and internationally, as well as friendly countries with sovereign wealth funds, to attract investments in assets that support national interests.
For instance, the Wall Street Journal reported last year that the U.S. and Saudi Arabia were in talks about potential agreements in the Democratic Republic of Congo, where Saudi Arabia would invest in mines and U.S. companies would secure some production rights.
A key figure in this initiative is Amos Hochstein, a senior adviser to President Biden. Hochstein and a small team from the State Department have been traveling globally, meeting with government officials in sub-Saharan Africa and U.S. investors.
“We don’t have much new supply coming online globally,” Hochstein explained in an interview. “What worries me is that even after a discovery is made, it can take seven to fifteen years before the first copper is extracted.”
The U.S. has committed over $1 billion to the Lobito Corridor to develop local infrastructure, including clean power and a railroad connecting Angola, Congo, and Zambia for exporting critical minerals. In Zambia, the U.S. last year encouraged the U.A.E. to invest in Mopani Copper Mines.
“We are backing our words with action,” Hochstein affirmed.
A key element of the U.S. strategy is the International Development Finance Corp. (DFC), a federal agency that finances overseas projects. Last year, the DFC committed $740 million to the mining sector, significantly up from $245 million in previous years.
The DFC is currently negotiating to finance a multibillion-dollar copper mine in Pakistan, expected to be one of the world’s largest copper projects when it becomes operational in 2028. An Irish company, TechMet, is among its significant investments. Under both the Trump and Biden administrations, the agency has invested approximately $105 million in TechMet, making it the second-largest shareholder. An investment firm backed by a Walton family member also contributed to TechMet's recent fundraising, valuing the company at over $1 billion.
“We are in a new Cold War,” said TechMet CEO Brian Menell, a South African. “One has to choose sides increasingly. For me, it’s always been clear. It is a contest between Western values and dictatorship.”
TechMet holds stakes in lithium, cobalt, nickel, vanadium, and rare-earth miners.
Meanwhile, Chinese companies, with government backing, are rapidly acquiring assets. In Belt and Road countries, China spent over $19 billion on metals and mining investments last year, up 158% from 2022, the highest since 2013. A Chinese firm is currently in advanced talks to purchase Chemaf, a metals producer developing a cobalt and copper mine in Congo, according to insiders.
At least two Western bidders showed interest in Chemaf, including Chilean Cobalt Corp. (C3), a U.S. company with copper-cobalt operations in northern Chile. C3 CEO Duncan Blount said he discussed making a bid with the DFC and the State Department but found it too costly. However, he praised their support, noting, “They were incredibly helpful with this and other projects. They’re eager to see American businesses and entrepreneurs return to Congo.”