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The Green Energy Revolution's Colonization of Africa
If capitalist interests continue to drive this crucial transition, which is all too likely, while global energy consumption isn’t scaled back radically, the amount of critical minerals needed to power the global future remains unfathomable.
Oct 12, 2024
Considered Angola’s crown jewel by many, Lobito is a colorful port city on the country’s scenic Atlantic coast where a nearly five-kilometer strip of land creates a natural harbor. Its white sand beaches, vibrant blue waters, and mild tropical climate have made Lobito a tourist destination in recent years. Yet under its shiny new facade is a history fraught with colonial violence and exploitation.
The Portuguese were the first Europeans to lay claim to Angola in the late sixteenth century. For nearly four centuries, they didn’t relent until a bloody, 27-year civil war with anticolonial guerillas (aided by the Cuban Revolutionary Armed Forces) and bolstered by a leftist coup in distant Lisbon, Portugal’s capital, overthrew that colonial regime in 1974.
Lobito’s port was the economic heart of Portugal’s reign in Angola, along with the meandering 1,866-kilometer Benguela Railway, which first became operational in the early 1900s. For much of the twentieth century, Lobito was the hub for exporting to Europe agricultural goods and metals mined in Africa’s Copperbelt. Today, the Copperbelt remains a resource-rich region encompassing much of the Democratic Republic of Congo and northern Zambia.
Perhaps it won’t shock you to learn that, half a century after Portugal’s colonial control of Angola ended, neocolonialism is now sinking its hooks into Lobito. Its port and the Benguela Railway, which travels along what’s known as the Lobito Corridor, have become a key nucleus of China’s and the Western world’s efforts to transition from fossil fuels to renewable energy sources in our hot new world. If capitalist interests continue to drive this crucial transition, which is all too likely, while global energy consumption isn’t scaled back radically, the amount of critical minerals needed to power the global future remains unfathomable. The World Economic Forum estimates that three billion tons of metals will be required. The International Energy Forum estimates that to meet the global goals of radically reducing carbon emissions, we’ll also need between 35 and 194 massive copper mines by 2050.
It should come as no surprise that most of the minerals from copper to cobalt needed for that transition’s machinery (including electric batteries, wind turbines, and solar panels) are located in Latin America and Africa. Worse yet, more than half (54%) of the critical minerals needed are on or near Indigenous lands, which means the most vulnerable populations in the world are at the most significant risk of being impacted in a deeply negative fashion by future mining and related operations.
Having lagged behind that country’s investments in Africa for years, the U.S. is now looking to make up ground.
When you want to understand what the future holds for a country in the “developing” world, as economists still like to call such regions, look no further than the International Monetary Fund (IMF). “With growing demand, proceeds from critical minerals are poised to rise significantly over the next two decades,” reports the IMF. “Global revenues from the extraction of just four key minerals — copper, nickel, cobalt, and lithium — are estimated to total $16 trillion over the next 25 years. Sub-Saharan Africa stands to reap over 10 percent of these accumulated revenues, which could correspond to an increase in the region’s GDP by 12 percent or more by 2050.”
Sub-Saharan Africa alone is believed to contain 30% of the world’s total critical mineral reserves. It’s estimated that the Congo is responsible for 70% of global cobalt output and approximately 50% of the globe’s reserves. In fact, the demand for cobalt, a key ingredient in most lithium-ion batteries, is rapidly increasing because of its use in everything from cell phones to electric vehicles. As for copper, Africa has two of the world’s top producers, with Zambia accounting for 70% of the continent’s output. “This transition,” adds the IMF, “if managed properly, has the potential to transform the region.” And, of course, it won’t be pretty.
While such critical minerals might be mined in rural areas of the Congo and Zambia, they must reach the international marketplace to become profitable, which makes Angola and the Lobito Corridor key to Africa’s booming mining industry.
In 2024, China committed $4.5 billion to African lithium mines alone and another $7 billion to investments in copper and cobalt mining infrastructure. In the Congo, for example, China controls 70% of the mining sector.
Having lagged behind that country’s investments in Africa for years, the U.S. is now looking to make up ground.
Zambia’s Copper Colonialism
In September 2023, on the sidelines of the G20 meeting in India, Secretary of State Antony Blinken quietly signed an agreement with Angola, Zambia, the Democratic Republic of Congo, and the European Union to launch the Lobito Corridor project. There wasn’t much fanfare or news coverage, but the United States had made a significant move. Almost 50 years after Portugal was forced out of Angola, the West was back, offering a $4 billion commitment and assessing the need to update the infrastructure first built by European colonizers. With a growing need for critical minerals, Western countries are now setting their sights on Africa and its green energy treasures.
“We meet at a historic moment,” President Joe Biden said as he welcomed Angolan President João Lourenço to Washington last year. Biden then called the Lobito project the “biggest U.S. rail investment in Africa ever” and affirmed the West’s interest in what the region might have to offer in the future. “America,” he added, “is all in on Africa… We’re all in with you and Angola.”
BothAfrica and the U.S., Biden was careful to imply, would reap the benefits of such a coalition. Of course, that’s precisely the kind of rhetoric we can expect when Western (or Chinese) interests are intent on acquiring the resources of the Global South. If this were about oil or coal, questions and concerns would undoubtedly be raised regarding America’s regional intentions. Yet, with the fight against climate change providing cover, few are considering the geopolitical ramifications of such a position — and even fewer acknowledging the impacts of massively increased mining on the continent.
In his book Cobalt Red, Siddharth Kara exposes the bloody conditions cobalt miners in the Congo endure, many of them children laboring against their will for days on end, with little sleep and under excruciatingly abusive conditions. The dreadful story is much the same in Zambia, where copper exports account for more than 70% of the country’s total export revenue. A devastating 126-page report by Human Rights Watch (HRW) from 2011 exposed the wretchedness inside Zambia’s Chinese-owned mines: 18-hour work days, unsafe working environments, rampant anti-union activities, and fatal workplace accidents. There is little reason to believe it’s much different in the more recent Western-owned operations.
“Friends tell you that there’s a danger as they’re coming out of shift,” a miner who was injured while working for a Chinese company told HRW. “You’ll be fired if you refuse, they threaten this all the time… The main accidents are from rock falls, but you also have electrical shocks, people hit by mining trucks underground, people falling from platforms that aren’t stable… In my accident, I was in a loading box. The mine captain… didn’t put a platform. So when we were working, a rock fell down and hit my arm. It broke to the extent that the bone was coming out of the arm.”
An explosion at one mine killed 51 workers in 2005 and things have only devolved since then. Ten workers died in 2018 at an illegal copper extraction site. In 2019, three mineworkers were burned to death in an underground shaft fire and a landslide at an open-pit copper mine in Zambia killed more than 30 miners in 2023. Despite such horrors, there’s a rush to extract ever more copper in Zambia. As of 2022, five gigantic open-pit copper mines were operating in the country, and eight more underground mines were in production, many of which are to be further expanded in the years ahead. With new U.S.-backed mines in the works, Washington believes the Lobito Corridor may prove to be the missing link needed to ensure Zambian copper will end up in green energy goods consumed in the West.
AI Mining for AI Energy
The office of KoBold Metals in quaint downtown Berkeley, California, is about as far away from Zambia’s dirty mines as you can get. Yet, at KoBold’s nondescript headquarters, which sits above a row of trendy bars and restaurants, a team of tech entrepreneurs diligently work to locate the next big mine operation in Zambia using proprietary Artificial Intelligence (AI). Backed by billionaires Bill Gates and Jeff Bezos, KoBold bills itself as a green Silicon Valley machine, committed to the world’s green energy transition (while turning a nice profit).
It is in KoBold’s interest, of course, to secure the energy deposits of the future because it will take an immense amount of energy to support their artificially intelligent world. A recent report by the International Energy Agency estimates that, in the near future, electricity usage by AI data centers will increase significantly. As of 2022, such data centers were already utilizing 460 terawatt hours (TWh) but are on pace to increase to 1,050 TWh by the middle of the decade. To put that in perspective, Europe’s total energy consumption in 2023 was around 2,700 TWh.
“Anyone who’s in the renewable space in the western world… is looking for copper and cobalt, which are fundamental to making electric vehicles,” Mfikeyi Makayi, chief executive of KoBold in Zambia, explained to the Financial Times in 2024. “That is going to come from this part of the world and the shortest route to take them out is Lobito.”
Makayi wasn’t beating around the bush. The critical minerals in KoBold mines won’t end up in the possession of Zambia or any other African country. They are bound for Western consumers alone. KoBold’s CEO Kurt House is also honest about his intentions: “I don’t need to be reminded again that I’m a capitalist,” he’s been known to quip.
In July 2024, House rang his company’s investors with great news: KoBold had just hit the jackpot in Zambia. Its novel AI tech had located the largest copper find in more than a decade. Once running, it could produce upwards of 300,000 tons of copper annually — or, in the language investors understand, the cash will soon flow. As of late summer 2024, one ton of copper on the international market cost more than $9,600. Of course, KoBold has gone all in, spending $2.3 billion to get the Zambian mine operable by 2030. Surely, KoBold’s investors were excited by the prospect, but not everyone was as thrilled as them.
“The value of copper that has left Zambia is in the hundreds of billions of dollars. Hold that figure in your mind, and then look around yourself in Zambia,” says Zambian economist Grieve Chelwa. “The link between resource and benefit is severed.”
Not only has Zambia relinquished the benefits of such mineral exploitation, but — consider it a guarantee — its people will be left to suffer the local mess that will result.
The Poisoned River
Konkola Copper Mines (KCM) is today the largest ore producer in Zambia, ripping out a combined two million tons of copper a year. It’s one of the nation’s largest employers, with a brutally long record of worker and environmental abuses. KCM runs Zambia’s largest open-pit mine, which stretches for seven miles. In 2019, the British-based Vedanta Resources acquired an 80% stake in KCM by covering $250 million of that company’s debt. Vedanta has deep pockets and is run by Indian billionaire Anil Agarwal, affectionately known in the mining world as “the Metal King.”
One thing should be taken for granted: You don’t become the Metal King without leaving entrails of toxic waste on your coattails. In India, Agarwal’s alumina mines have polluted the lands of the Indigenous Kondh tribes in Orissa Province. In Zambia, his copper mines have wrecked farmlands and waterways that once supplied fish and drinking water to thousands of villagers.
The Kafue River runs for more than 1,500 kilometers, making it Zambia’s longest river and now probably its most polluted as well. Going north to south, its waters flow through the Copperbelt, carrying with them cadmium, lead, and mercury from KCM’s mine. In 2019, thousands of Zambian villagers sued Vedanta, claiming its subsidiary KCM had poisoned the Kafue River and caused insurmountable damage to their lands.
The British Supreme Court then found Vedanta liable, and the company was forced to pay an undisclosed settlement, likely in the millions of dollars. Such a landmark victory for those Zambian villagers couldn’t have happened without the work of Chilekwa Mumba, who organized communities and convinced an international law firm to take up the case. Mumba grew up in the Chingola region of Zambia, where his father worked in the mines.
“[T]here was some environmental degradation going on as a result of the mining activities. As we found, there were times when the acid levels of water was so high,” explained Mumba, the 2023 African recipient of the prestigious Goldman Environmental Prize. “So there were very specific complaints about stomach issues from children. Children just really wander around the villages and if they are thirsty, they don’t think about what’s happening, they’ll just get a cup and take their drink of water from the river. That’s how they live. So they’ll usually get diseases. It’s hard to quantify, but clearly the impact was there.”
Sadly enough, though, despite that important legal victory, little has changed in Zambia, where environmental regulations remain weak and nearly impossible to enforce, which leaves mining companies like KCM to regulate themselves. A 2024 Zambian legislative bill seeks to create a regulatory body to oversee mining operations, but the industry has pushed back, making it unclear if it will ever be signed into law. Even if the law does pass, it may have little real-world impact on mining practices there.
The warming climate, at least to the billionaire mine owners and their Western accomplices, will remain an afterthought, as well as a justification to exploit more of Africa’s critical minerals. Consider it a new type of colonialism, this time with a green capitalist veneer. There are just too many AI programs to run, too many tech gadgets to manufacture, and too much money to be made.
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The US Can Make Billions Available to Ukraine at No Cost to Itself
Indebted middle-income countries like Ukraine should not be expected to subsidize IMF lending when better alternatives exist. And the U.S. has more than enough influence to help the international lending body change course on these counterproductive policies.
Oct 04, 2024
The United States has a chance to save Ukraine billions of dollars, and at no cost to U.S. taxpayers, by pushing for an end to the unfair and harmful surcharge policy of the International Monetary Fund (IMF).
The IMF is currently reviewing this surcharge policy, which hits Ukraine—and other highly indebted borrowers like Kenya, Ecuador, Argentina, Barbados, and Egypt—with additional charges on top of standard interest and service fees. Human rights and development experts consider surcharges to be counterproductive and contrary to international human rights law. The IMF should take this opportunity to permanently end its surcharge policy for highly indebted borrowers.
Surcharges are penalty fees levied on middle-income countries with high levels of IMF debt. There are two types of surcharges exacted by the IMF: level-based surcharges and time-based surcharges. Level-based surcharges add 2 percentage points in fees to a country’s outstanding IMF credit when it surpasses 187.5% of a country’s quota to the Fund. Time-based surcharges add another percentage point of fees when a country’s IMF debt exceeds this threshold for over 36 or 51 months, depending on the lending facility. Some countries, including Ukraine, are paying both surcharges, amounting to an additional 3% points of fees.
In Ukraine’s case, surcharges will add nearly $3 billion to the war-ravaged country’s debt burden over the next decade even as it needs an estimated $9.5 billion in emergency financing for recovery and reconstruction just this year.
The IMF and Treasury Secretary Yellen have previously claimed that surcharges incentivize timely repayment to the IMF. However, countries are struggling to repay the IMF due to exogenous shocks, not a lack of appropriate incentives. Surcharges are counterproductive as they push countries facing crises—including war, the COVID-19 pandemic, and climate disaster —further into debt. It is no coincidence that, prior to the pandemic, only eight countries were paying IMF surcharges; today 23 countries are paying these fees.
In Ukraine’s case, surcharges will add nearly $3 billion to the war-ravaged country’s debt burden over the next decade even as it needs an estimated $9.5 billion in emergency financing for recovery and reconstruction just this year. Experts say efforts to relieve Ukraine’s debts could change the course of the war. Ukraine recently reached a much-needed deal to restructure its debts. Keeping surcharges in place would diminish the benefits of this restructuring, as it sends $3 billion that could be spent on recovery, reconstruction, and defense back to the IMF. Surcharges have already cost Ukraine $621 million between 2018 and 2023. Discontinuing surcharges would save Ukraine billions of dollars in its hour of need.
Following intense criticism of surcharges by leading economists, developing countries, and U.S. members of Congress, the IMF announced earlier this year that it would carry out a review of the controversial policy. Following consultations with IMF stakeholders— in particular, the US Treasury Department—the Fund is expected to announce the results of its review, and any recommendations of changes to the policy, before the IMF’s Annual Meetings in October. It’s worth noting that the IMF has previously recognized the profoundly harmful and counterproductive consequences of similar past policies, moving to discontinue them in 1974, 1981, and 1992.
Yet, among wealthy countries, there appears to be resistance to terminating, or even significantly reforming, the current surcharge policy. It is particularly troubling that much of this resistance appears to be rooted in the hope that the income from surcharges can supplement projected funding shortfalls for the IMF’s Poverty Reduction and Growth Trust (PRGT) facility, which offers low-income countries interest-free and concessional loans. The IMF, the US Treasury, and other observers have previously discussed surcharges as a source of income for IMF lending via the PRGT.
Among wealthy countries, there appears to be resistance to terminating, or even significantly reforming, the current surcharge policy.
Post-pandemic funding needs have depleted PRGT resources and the program is in need of replenishment. It may be necessary for the IMF to increase its lending through the PRGT in response to the growing needs of developing countries. However, squeezing highly indebted countries such as Ukraine to do so would be a perverse solution. These same middle-income countries have also largely been left out of pandemic-related debt relief initiatives and are struggling to recover under the weight of a failing international financial architecture. Funding for the PRGT shouldn’t come at the expense of these countries.
There are better and more effective alternatives to relying on surcharges to fund the PRGT. These include: donations from the U.S. and other advanced economies, gold sales, and changes to the IMF’s internal accounting practices. Surcharges are infinitesimal compared to the IMF’s much-vaunted $1 trillion lending firepower. The IMF has vast reserves of gold that remain largely undervalued. These gold reserves are currently valued at the 1960s rate of approximately $47 per ounce. Valued at current market rates of approximately $2,556 per ounce, the IMF’s gold reserves would be worth $228 billion. The IMF could sell a portion of these reserves or adopt mark-to-market accounting practices to fund the PRGT.
Indebted middle-income countries like Ukraine should not be expected to subsidize PRGT lending when better alternatives exist. A permanent end to surcharges would eliminate an increasingly significant barrier to sustainable recovery in many developing countries. Given that the U.S. holds a de facto veto over IMF policy changes, the stance of the U.S. Treasury Department will be instrumental. Refusing to change the surcharge policy today would be a major missed opportunity for Secretary Yellen and the world.
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In Samoa, UN Chief Says Low-Lying Island Nations Face 'Annihilation' by Climate Chaos
"We need all countries to honor their promises on climate finance and a strong finance outcome from this year's COP where we will discuss the financial commitments after 2025."
Aug 22, 2024
United Nations Secretary-General António Guterres warned in Samoa on Thursday that low-lying Pacific island nations face the threat of "annihilation" from rising sea levels, cyclones, ocean heatwaves, and other dangers driven by human-caused climate chaos.
"High and rising sea levels pose an enormous threat to Samoa, to the Pacific, and to other small island developing states. These challenges demand resolute international action," Guterres said. "Sea levels are rising even faster than the global average, posing an existential threat to millions of Pacific Islanders."
"If we are not able to stop what is happening with climate change, this problem that we see in Samoa will not stay in Samoa."
Recalling the 2009 earthquake and tsunami that killed at least 192 people and devastated Samoa, Guterres said that "we have seen people that moved their houses inland, we have seen people that persisted coming back and rebuilding, we have seen an enormous determination of people to fight against, not only the impact of the tsunami, but the impacts of the rising sea levels and of the storms and the cyclones."
"I've seen a wall that is protecting a village from the sea; that wall in 20 years, because of the tsunami—because of the rising sea level, and because of the heavy storms—has already been built three times," he continued.
"People are suffering. Economies are being shattered. And entire territories face annihilation," Guterres stressed.
Guterres said Samoans' ambitious plans to tackle the "existential threat for millions" are being impeded by a lack of promised funding from rich nations. He pointed to the Loss and Damage Fund, agreed to in 2022 at the U.N. Climate Change Conference (COP27) in Egypt, as well as rich countries' 2021 pledge to double climate adaptation funding to $200 billion.
"We are fighting hard for climate justice," said Guterres, but "we are not seeing the money that is needed and that's why we ask for the reform and the international financial institutions in order for the funding needs of countries, like Pacific countries, to be met."
"We need all countries to honor their promises on climate finance and a strong finance outcome from this year's COP where we will discuss the financial commitments after 2025," he added.
COP29—which has been criticized by green groups for being chaired by a former oil executive—is set to take place in Baku, Azerbaijan in November.
Low-lying Pacific island nations are among the least responsible for the climate emergency but are among the most adversely affected by the crisis. To help address this, Guterres reiterated his call for small island nations like Samoa to have access to $80 billion in development from special drawing rights (SDRs), which are reserve assets controlled by the International Monetary Fund that can be exchanged for cash. Rich countries can also place SDRs in a fund for developing nations' use.
The secretary-general also said that new income streams are key to the survival of nations like Samoa whose tourism industries were devastated by the Covid-19 pandemic and which "have not received the support of the international community."
"If we are not able to stop what is happening with climate change, this problem that we see in Samoa will not stay in Samoa," Guterres warned. "It will be happening more and more everywhere in all coastal areas, from New York to Shanghai, from Lagos to Bangkok."
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