Though the tale of China in Africa is becoming more well-known, its complexity cannot be understated. China was obliged to search for markets overseas as its domestic economy began to soar at the end of the 20th century due to the need for natural resources and the development of jobs. Africa was a ready partner because of its need for infrastructure development and its availability of commodities.
In January 2024, South Africa played host to the largest mining investment conference in the world. According to industry insiders, China and the United States are vying for vital minerals like cobalt and lithium, which are expected to be essential for driving the anticipated shift to sustainable energy.
Some of the largest reserves of these materials are found in African nations like the Congo, but China now controls the supply chain and refines them, and the United States wants to lessen its reliance on the massive Asian nation.
“I don’t need to remind you of what happens when the supply chain breaks down or when we depend on a single supplier,” United States Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez alluded to this during his remarks at the recent mining conference in Cape Town.
Fernandez stated that by 2030, electric cars should account for half of the world market, and by 2040, the need for lithium should have increased 42 times. Approximately 80% of the world’s lithium refining is done in China.
The Africa Mining Indaba conference’s international adviser, Tony Carroll, the director of Acorus Capital, told Voice of America (VOA) that the session was timely for the West.
“About 20 years ago, the Chinese made it their priority to corner the market for critical minerals, and they backed up that approach with significant infrastructure expenditures and public diplomacy in Africa, the majority of which came from long-term loans. The West has been scurrying ever since they discovered this tactic too late,” Carroll claimed further.
The production of electric vehicles and the expansion of green technology production depend on “Rare Earth Minerals”. However, African nations with large resources may have to pay a social or environmental price for its exploitation.
In what could be interpreted as a jab at Beijing, Fernandez repeated comments made by Pope Francis during a recent visit to the Congo criticising “economic colonialism” in Africa. Additionally, he gave assurances to African nations that the US will uphold “environmental, social, and governance standards.”
In 2024, the Chinese business Zijin, one of the biggest mining corporations globally with holdings in copper, lithium, and other metals, sponsored the Mining Indaba for the first time.
As it increased production at its new Kisanfu mine in the Democratic Republic of the Congo in 2023, China’s CMOC Group surpassed Glencore to take the top spot in the world’s cobalt production rankings.
The company’s production increased by 174% year over year to 55,526 metric tons, more than 25% of the 213,000 tons of global demand.
The cobalt market has been overtaken by Kisanfu, in which the massive Chinese battery company CATL holds a minority stake. According to the Cobalt Institute, one of the “biggest surpluses in recent years” occurred in 2023 when global production surpassed demand by 12,500 tons.
CMOC is not worried. Despite the decline in the price of cobalt from USD 40 per pound in May 2022 to the present USD 13, the company intends to increase output and open more tabs this year.
Some cannot afford to be that optimistic. Project economics have been completely turned upside down by the price crash, and Western expectations of becoming less dependent on China for a metal that is essential to military gear and clean energy technologies have been dashed.
However, the West is currently opposing China’s firm hold on the mineral resources that are beneath the surface of Zambia and the Democratic Republic of the Congo.
With both nations hoping to play significant roles in the quest for key minerals, this new race for Africa has a post-colonial twist.
The PR manager of South Africa’s Zijin Platinum said the CEO was unable to react before the deadline for this piece when asked by VOA if China and the United States are currently in a race for rare earth metals, in addition to other queries regarding Chinese mining interests in Africa.
Nowadays, African countries are attempting to negotiate the finest terms for their citizens. At the Cape Town conference, Namibia’s Mines Minister Tom Alweendo informed reporters that his nation is certain that any lithium mined there must be processed domestically.
Likewise, DRC President Felix Tshisekedi, a prominent speaker at the mining conference, has been pressing China for improved conditions for several years. China gets most of its cobalt from the Democratic Republic of Congo (DRC), which provides about 70% of the global supply.
Congo is one of the least developed nations in the world despite having abundant mineral riches, and Tshisekedi claimed in January 2024 that the USD 6.2 billion minerals-for-infrastructure deal that his predecessor had struck with China had not helped the country.
“The Chinese, they’ve made a lot of money and profited greatly from this contract,” Tshisekedi remarked to Bloomberg at the Davos World Economic Forum, while adding, “It has not benefited the Democratic Republic of the Congo in any way. Nothing concrete or beneficial, in my opinion, for our population.”
“Now our need is simply to re-balance things in a way that it becomes win-win,” he stated.
There are indications that Tshisekedi may be heading west.
US Spices Up The Game
The Minerals Security Partnership was established by US President Joe Biden’s administration in 2023 to diversify supply chains. Australia, Canada, Finland, France, Japan, the Korean Republic, Norway, Sweden, the United Kingdom, and the European Union are among the partners. The DRC was present at the organisation’s inaugural conference last year as one of the non-partner countries.
The DRC and Zambia then signed an agreement with the United States to work together to improve the supply chain for electric vehicle batteries during Biden’s US-Africa Summit in December 2023.
Speaking at the Indaba, Jay Truesdale, CEO of risk advice firm Veracity Worldwide, said, “Dependency on China for rare earths is viewed with alarm. Given that Beijing has the means to severely restrict access to these minerals, in the event of a geopolitical crisis it could choose to use its market dominance to cripple non-Chinese manufacturers in such sectors as electronics, automotive manufacturing, aerospace, and renewable energy.”
In addition to the escalating hostilities in Africa between China and the West, Truesdale predicted that Russia’s invasion of Ukraine would compel mining firms to make difficult choices.
“Russian mining operations throughout the continent are coming under more scrutiny as a result of the conflict in Ukraine. Where its mining corporations operate, Russia benefits from a lack of transparency and lax governance,” he stated further.
“African governments are now paying closer attention to how Moscow exchanges assurances of increased security for a closer look at mineral wealth and the potential for state control,” Truesdale concluded.