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Africa’s Strategic Mineral Deposits Now at the Center of an Increasingly Fraught Great Power Competition

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Iron ore, tantalum, cobalt, coltan, and a handful of other strategically important minerals and elements are at the center of an increasingly heated battle for the control of global supply chains among the world’s largest economies.

Leaders in Europe and the United States have worried for years about China’s growing dominance in the extraction and processing of certain vital raw materials like cobalt and tantalum. Reserves of these metals, which are important to many high-tech sectors, are located in the global south, most notably in the Democratic Republic of the Congo. Now, countries on both sides of the Atlantic are taking steps to shore up control.

The United States

Earlier this week, the United States Development Finance Corporation (DFC) announced a $25 million investment in an Irish company that will help to develop new nickel-cobalt mines in Brazil. DFC head Adam Bohler, a Trump administration insider, has been a vocal critic of China and said on many occasions that part of the mission of his agency is to use investments like this to challenge China’s control of strategic sectors.

Europe

There’s similar concern about China’s control of a large portion of the world’s rare earth minerals and other critical ingredients used to build batteries and components for electric vehicles, aerospace, defense technology, and other next-generation electronics.

“Europe’s “green recovery” will be based on industrial leadership in the production of computers, batteries, electric vehicles, and wind turbines,” said Anna-Michelle Asimakopoulou, a Greek MP in the European parliament. “But we are increasingly reliant on China and other regions for supplying the metals and minerals required by those technologies in higher volumes — from critical raw materials.”

Asimakopoulou isn’t just concerned about access to these mineral supply chains but also by the fact that China heavily subsidizes its resource extraction and processing firms, making it extremely difficult, if not impossible, for European mining companies to compete. “It is baffling that we are only just waking up to our reliance on what the European Commission calls ‘a systemic rival,’” she said about China in a column for the European news Euractiv.

Australia

In Australia, there’s mounting concern that China will use its massive iron ore purchases as a means to punish Canberra for its rapidly deteriorating ties with Beijing. Last year, according to former Prime Minister Tony Abbott, China bought tens of billions of dollars of iron ore from Australia, accounting for 62% of Beijing’s total iron ore purchases worldwide.

While a lot of analysts downplay the risk that China will be able to quickly diversify away from Aussie ore, Abbott isn’t so sure. He’s especially worried about the fact that the massive Simandou mine in Guinea is now operational and that four new Chinese deep-water ports have come online in the past year that are all capable of handling a new generation super-carriers known as Valemax or ChinaMax vessels, that are designed to transport massive amounts of ore.

These enormous ships are being used with greater frequency to transport iron ore both from Guinea and Brazil.

China

But even though the Chinese dominate large swathes of the global mining supply chain, especially in these strategic minerals/metals/elements, they too are becoming increasingly concerned about the impact that a worsening geopolitical environment could have on their access to these resources.

Recent U.S. sanctions that cut the telecom giant Huawei’s access to U.S.-made semiconductor chips was taken as a warning by Chinese corporate and political leaders and sparked an intense drive to lock down supply chains in other verticals, particularly strategic metals and minerals.

“If that day came (of sanctions being applied to the base metals sector) while China is still lagging behind [in terms of] mine exploration and development, the consequence would be too horrible to contemplate,” warned Cheng Jinghe, chairman of the large state-owned Zijin Mining company, also a major player in the Democratic Republic of the Congo, at a recent conference in Beijing.

So Where Does This Leave Africa?

There’s little discussion currently about the implications of these new geopolitical rivalries for control of strategically vital mineral/metal supply chains for either African stakeholders or the environment. African governments will hopefully recognize that this new geopolitical competition could give them new forms of leverage, but if/how they take advantage of their position still remains to be seen.

This could be an opportunity for African governments to extract more concessions from Chinese, European, and American players and provide badly-needed additional funds that can be used to help revive their ailing economies. Conversely, officials in those same governments can also follow the example of so many of their predecessors and exploit those resources for their personal benefit.

Although African leaders have said repeatedly they want to stay out of these great power struggles, that may not be an option given the heightened demand for their minerals and metals. Competition for these resources isn’t going away. Instead, African countries need to figure out how they’re going to position themselves in this new contest.

Written by

Managing Editor of The China Africa Project

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