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Biden’s Farewell To Africa: Strategic Motives Behind First And Solely Presidential Go to – Barrick Gold (NYSE:GOLD), First Quantum Minerals (OTC:FQVLF)



After a hurricane-related postponement, President Joe Biden will go to Angola in December, marking his first and final journey to the African continent within the closing week of his tenure. Angola, a rustic with a fancy historical past tied to america and its Chilly Battle adversaries, is now on the forefront of recent alternatives for collaboration, significantly in infrastructure improvement and important mineral provide chains.

A Shifting Overseas Coverage

In the course of the Chilly Battle, Angola was a hotspot for proxy battles between the Soviet Union and america. Angola’s civil conflict, which raged from 1975 to 2002, noticed the Soviet Union, Cuba, and China help the ruling MPLA (Individuals’s Motion for the Liberation of Angola), whereas the U.S. backed anti-communist insurgent teams. Regardless of being on reverse sides, U.S. oil firms continued working in Angola, exporting oil to Europe whereas geopolitical tensions endured.

Because the finish of the civil conflict, Angola has maintained a comparatively secure authorities below the MPLA, and the U.S. established formal diplomatic relations in 1993. Over time, the connection between the 2 nations has grown, though Angola’s major financial ties have shifted in direction of China and Russia.

Nonetheless, following Russia’s invasion of Ukraine, Angola’s abstention from the United Nations vote and subsequent vote in opposition to Russia signaled a extra unbiased overseas coverage—one that might align with Western pursuits and counterbalance China’s and Russia’s affect on the continent.

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The Lobito Hall

Lobito Hall is a important infrastructure venture and certain the focus of Biden’s go to. This hall, which incorporates the Benguela Railway, connects Angola’s Lobito port to the mineral-rich areas of the Democratic Republic of Congo (DRC) and Zambia. By upgrading this route, the U.S. sees a possibility to facilitate the export of important minerals, particularly copper and cobalt, important for the worldwide electrical automobile (EV) transition and renewable power applied sciences.

Moreover, Canadian Ivanhoe Mines IVAPF was granted a license to probe for copper in Angola only a yr in the past, exhibiting the rising Western curiosity on this nation wealthy in manganese, uranium, zinc, wolfram, and, significantly, diamonds.

The Wealthy Neighborhood

The Lobito Hall additionally advantages neighboring Zambia, which boasts 94 lively mining initiatives, together with KoBold Metalslargest copper discovery within the nation’s historical past. Copper is a important useful resource for electronics, renewable power, and EV batteries, and Zambians understand it. They plan to lift their medium-term copper manufacturing to a million tons per yr.

Traditionally, Zambia has confronted infrastructure bottlenecks which have constrained its mining potential. By leveraging the Lobito Hall, Zambia might considerably increase its copper exports to international markets, particularly as U.S. allies resembling Saudi Arabia have not too long ago invested in Zambian copper belongings, together with First Quantum’s FQVLF Kansanshi and Sentinel copper mines. Moreover, Barrick Gold’s GOLD Lumwana copper mine in Zambia is likely one of the nation’s main copper producers, additional highlighting the potential financial increase the Lobito Hall might present.

Countering China’s Affect

For Angola, which is closely indebted to China, this infrastructure venture represents a possibility to diversify its financial partnerships. China is Angola’s largest buying and selling accomplice, primarily pushed by oil exports. But, U.S. investments in initiatives just like the Lobito Hall might shift the nation’s financial focus towards the West, lowering its dependence on Chinese language loans and infrastructure improvement.

President Biden’s go to, subsequently, comes at a vital time. His journey opens a path to important African commodities, countering China’s Belt and Highway initiative by offering a sooner, extra environment friendly path to Europe and the U.S., bypassing the Indian Ocean, and strengthening commerce ties with Western markets.

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Picture: Shutterstock

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