Introduction
Africa stands at the forefront of a transformative era as the world pivots towards sustainable energy sources, with the continent’s rich mineral reserves emerging as a prerequisite in the global green technology revolution. The minerals essential for batteries, solar panels, and other components crucial to the energy transition are abundant across the African landscape. However, despite this wealth, Africa’s mining industry remains predominantly structured around a traditional “pit-toport” model, where raw mineral ores are extracted but often processed elsewhere, limiting the continent’s role in the value chain.
The imperative for change is evident. Africa holds a unique opportunity to transition from being a mere supplier of raw materials to becoming a strategic production hub for these critical minerals. This potential transformation is poised to intensify competition among global players eager to secure their positions in the emerging green technology supply chain.
Key to this dynamic shift is Africa’s substantial source of rare earth elements, particularly concentrated in Eastern and Southern nations such as South Africa, Madagascar, Malawi, Kenya, Namibia, Mozambique, Tanzania, Zambia, and Burundi. The significance of these rare earth deposits extends beyond the continent, resonating globally as they underpin technologies crucial for the transition from fossil fuels to renewable energy.
However, as Africa navigates this transformative landscape, geopolitical concerns loom large, primarily driven by the dominant position of China in both the production and processing of many of these critical minerals. China’s strategic stronghold has spurred apprehensions among other global powers, especially the United States. Eager to minimize vulnerability to supply chain disruptions, the U.S. Department of Defense engaged in negotiations with African nations like Malawi and Burundi, seeking to secure future rare earth supplies directly from the continent.
The European Union, too, has recognized the strategic importance of securing a stable supply of critical minerals. While pursuing strategies for developing domestic rare earth deposits and recycling, the EU has also expressed its willingness to forge new strategic partnerships with African countries. This signals a potential shift in the global dynamics of rare earth element supply, with Africa emerging as a key player.
Beyond the U.S. and the EU, other global actors, including Australia and Japan, are actively seeking to enhance their presence in Africa’s burgeoning rare earth market. Australian companies have initiated projects in Tanzania and Malawi, while Japan, through entities like the Japan Oil, Gas and Metals National Corporation, has been supporting rare earth projects in Namibia and South Africa since 2010.
As the global competition for critical minerals accelerates, Africa finds itself at a pivotal crossroads. The choices made in the coming years will not only shape the continent’s economic landscape but also influence the geopolitics of global resource competition, marking a significant chapter in Africa’s role in the new energy era. This research paper delves into the intricate dynamics of this evolving landscape, exploring the strategies of major global players, the geopolitical implications for Africa, and the potential ramifications for the world’s energy transition.
Research Problem/Gap
- What are the specific challenges associated with the pit-to-port model in Africa?
- How are African nations diversifying their partnerships in the mineral sector to reduce dependence on a single global power, and what geopolitical consequences arise from these diversified relationships?
Hypothesis
Africa’s shift to a strategic production hub is poised to reshape global rare earth dynamics, fueling geopolitical competition and influencing the world’s transition to renewable energy.
Literature Review:
In the dynamic geopolitical landscape, Southern Africa emerges as a focal point for the global quest for strategic minerals, critical not only for industrial applications but also for sustaining and advancing military capabilities. The multifaceted dimensions surrounding the presence and utilization of strategic minerals in Southern Africa elucidate their profound impact on the strategic interests of major global powers and the evolving dynamics of resource security.
For over four decades, the United States has maintained a consistent concern regarding the secure and uninterrupted supply of these strategic minerals. This extended period of apprehension underscores the enduring importance attached to the region’s mineral wealth, necessitating a nuanced examination of the factors contributing to this concern and their implications for U.S. strategic interests.
Amidst the broader discourse on global economic shifts, a significant narrative has focused on
China’s meteoric rise as an industrial powerhouse. While much attention has been directed towards
China’s remarkable trade surpluses, a growing body of literature is now probing the depths of Beijing’s interest in Africa’s abundant natural resources, particularly the strategic minerals found in Southern Africa.
Furthermore, to contextualize Southern Africa’s role in the global supply chain of strategic minerals, the review explores how the extraction and export of these resources impact not only the regional economy but also the broader dynamics of international trade. The intricate interplay between the demand for these minerals, driven by industrial and the geopolitical strategies employed by major powers forms a central focus.
STRUGGLE OVER RESOURCES
The exploration of the struggle over African mineral resources within the historical context of the European Union (EU), the United States (US), and China is deeply embedded in the intricate tapestry of colonial legacies, post-independence economic policies, Cold War dynamics, and the evolving global landscape. Researchers have meticulously examined how historical events, such as colonial resource extraction and the subsequent quest for economic development, have laid the groundwork for the complex contemporary competition.
The post-independence era witnessed the formulation of economic policies by African nations as they grappled with the challenges of managing their abundant mineral resources. Against the backdrop of the Cold War, superpower rivalries influenced interventions, alliances, and geopolitical strategies in the region. China’s historical engagement with Africa, shaped by ideological considerations and geopolitical shifts, adds another layer to this historical narrative.
As the world transitioned to the post-Cold War era, economic liberalization became a defining feature, influencing the strategies of external actors— the EU, the US, and China—in their pursuit of African mineral resources. Globalization, changing alliances, and the intersection of economic interdependence and technological advancements further complicated the resource competition landscape.
Moreover, the development of resource nationalism in African nations reflects a trajectory shaped by experiences of exploitation, leading to the formulation of policies aimed at asserting greater control over mineral resources and safeguarding national sovereignty.
U.S dependence on Southern African strategic minerals
The intricate relationship between the United States (U.S.) and strategic minerals from Southern Africa is deeply embedded in historical ties and contemporary dynamics. This historical dependency, forged during the Cold War, has evolved into a critical facet of U.S. economic stability, national security, and global geopolitical strategies.
Southern African strategic minerals, including platinum, chromium, and manganese, hold pivotal roles in sustaining key U.S. industries and technological advancements. These minerals are integral components in aerospace, electronics, and defense systems, contributing significantly to the innovation and competitiveness of U.S. industries on the global stage .Beyond industry, the dependency on Southern African strategic minerals is closely entwined with U.S. national security imperatives. These minerals are essential for the production of military equipment, advanced technologies, and energy systems, shaping U.S. defense capabilities and overall national security resilience.
The global supply chain intricacies further underscore the vulnerability associated with U.S. dependencies on Southern African strategic minerals. Disruptions or fluctuations in the supply chain can have cascading effects, influencing U.S. industries and defense capabilities. Economically, U.S. dependence on these minerals significantly impacts economic stability, job creation, and overall resilience. Diplomatically and geopolitically, the U.S. engages in strategies to secure access to these minerals, shaping foreign policy and alliances in the region.
A Closer Look at China’s Dominance in African Resource Ventures
Another important factor that has driven geopolitical concerns over critical minerals is the dominant position of China in the production and processing of many of these minerals. While considerable attention has been directed towards China’s ascent as a global industrial powerhouse, particularly in the context of its substantial trade surpluses, Western observers examining Beijing’s engagement with Africa’s abundant natural resources have primarily focused on China’s seemingly unquenchable thirst for energy resources. Currently, Africa contributes 12 percent of the world’s liquid hydrocarbon (oil) production. Projections indicate that African oil production is expected to increase to 10.7-11.4 million barrels per day (bpd) in 2013 and further to 12.4-14.5 million bpd by 2018.
Mineral supply chains encompass four primary stages. The initial stage involves extraction, encompassing ore mining conducted in either underground or open-pit mines, and occasionally through less formalized artisanal mining methods. The second stage entails refining, where ores undergo further processing to yield industrially usable minerals. In the third stage, these industrially usable products are further processed and integrated into various end products. The fourth and concluding step involves recycling, wherein minerals are reclaimed through new processes, with the aim of facilitating their reuse.
| Extraction | Refining | Industrial Manufacturing | ||
| China 22.9USA 3.0EU 2.9Other 71.2 | China 44.8USA 7.3EU 2.7Others 45.2 | China 50.3USA 8.3EU 12.6Other 28.8 |
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Figure shows the share of extraction, refining and manufacturing of four selected base metals (aluminium, lead, nickel, tin and zinc) by China, the EU, the US, and other states. For other minerals, these shares might differ. But fundamentally, the selection reflects the geopolitics of mineral supply chains.[1]
China has broadened its collaboration with African nations significantly. According to the CLA (Chinese Loans to Africa) Database, between 2000 and 2017, Chinese state-owned banks, private financial institutions, and companies have extended loans amounting to at least $18 billion for mining projects in African countries, with a substantial portion, $17.6 billion, directed to Angola . In addition to this, China has strategically invested in infrastructure through its Belt and Road Initiative (BRI). Launched in 2013, the BRI aims to enhance infrastructure connectivity, foster free trade, and facilitate political communication. The project seeks to establish and expand economic cooperation across various sectors. As of March 2022, 148 countries worldwide had become partners in the BRI. Significantly, the expansion of mining infrastructure holds a central position in this cooperation. A key facet of this collaboration involves the enhancement of (African) transport infrastructure, including the development of roads, ports, and railway networks, facilitating the transportation of minerals from diverse regions to China. This physical connectivity is particularly crucial in the minerals sector, where the transportation of substantial quantities of ores, whether by land or sea, constitutes a fundamental element for ensuring a secure supply.
These advancements elucidate how China has successfully increased its prominence as the foremost nation in smelting and refining over the last two decades. China’s primary strategic edge in global markets lies in having established the production of essential critical metals’ smelting and refining within its own borders. Consequently, numerous mineral and metal supply chains traverse through China. By 2021, China held the position of the world’s largest producer of refined products with elevated sourcing risk, commanding an impressive 93% market share These advancements elucidate how China has successfully increased its prominence as the foremost nation in smelting and refining over the last two decades. China’s primary strategic edge in global markets lies in
having established the production of essential critical metals’ smelting and refining within its own borders. Consequently, numerous mineral and metal supply chains traverse through China. By 2021, China held the position of the world’s largest producer of refined products with elevated sourcing risk, commanding an impressive 93% market share.[2]
US-China competition
In 2016, China Molybdenum acquired the Tenke and Fungurume copper and cobalt mine in the Democratic Republic of Congo (DRC) from the U.S. Company Freeport-McMoRan for a sum of US$2.65 billion. As the demand for these essential minerals has surged, China Molybdenum, by 2021, commands over one-tenth of the global cobalt market. This significant presence stems from the strategic acquisition of an extensive deposit in the DRC, as highlighted by Hook and Sanderson in 2021. Domestically, China’s critical minerals industry has undergone consolidation across value chains. In December 2021, China’s primary mineral mining entity, China Minerals Rare Earth Co., announced a merger with two other companies, namely Chinalco Rare Earth & Metals Co. and China Southern Rare Earth Group Co., thereby establishing a formidable global entity in the strategic industry.
Jose Fernandez, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment speaks at investing in African Mining Indaba 2023 conference in Cape Town, South Africa, Feb. 6, 2023[3]. The United States and China are engaged in a competition to secure access to critical minerals, such as cobalt and lithium, crucial for the anticipated shift to clean energy. African nations, including the Democratic Republic of Congo, possess significant deposits of these resources. However, China currently dominates the entire supply chain, including refining. The U.S. is actively seeking to diminish its dependency on China in this regard. During a mining conference in Cape Town, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment, Jose Fernandez, alluded to this competition by stating, “I don’t need to remind you of what happens when the supply chain breaks down or when we depend on a single supplier. We lived it during the COVID pandemic, and this is a vulnerability that we need to solve together.” Fernandez, without explicitly mentioning China, highlighted the anticipation that electric vehicles will command half of the global market by 2030 and the projected 42-fold increase in demand for lithium by 2040, with China currently responsible for around 80 percent of the world’s lithium refining.
Zijin Mining chairman and founder Jinghe Chen speaks during the Investing in African Mining Indaba 2023 conference. China is currently engaged in a competition with the U.S. for rare earth metals, raising additional queries about Chinese mining endeavors in Africa. African governments are actively pursuing favorable agreements to ensure optimal benefits for their populations. Other Global Player
Other major players such as the EU and Japan,Australia are making strides through various bilateral and regional-multilateral initiatives, although their impact is notably less substantial. The Australia-Africa Minerals & Energy Group (AAMEG) serves as the premier organization facilitating Australian companies’ role as preferred partners in the advancement of Africa’s resource sector. Africa stands as Australia’s primary destination for resource investments, hosting over 200 ASX-listed companies engaged in more than 1,000 projects across 38 countries on the continent. Presently, AAMEG boasts a membership exceeding 70, encompassing explorers, mineral and energy firms, as well as providers of goods and services.[4]
The Japan Organization for Metals and Energy Security (JOGMEC),[5] a state-owned resource explorer, is currently in the finalization stages of crafting work plans in collaboration with Congo, Zambia, and Namibia. This initiative reflects the Japanese government’s strategic intent to work closely with these three African nations, aiming to establish robust supply chains for critical minerals such as cobalt, integral to the production of electric vehicle batteries. Particularly noteworthy is Japan’s focus on Namibia, where it seeks to forge a work plan in partnership with Epangelo, Namibia’s state-owned mining company. This collaboration is specifically designed to enhance the supply chain resilience for rare earths and other essential minerals. This move by Japan underscores the nation’s proactive approach to securing vital resources for emerging technologies and contributes to the broader discourse on global resource strategies and international collaborations in the mining sector.
Pit-Port Model
Africa, endowed with abundant mineral resources, has historically operated within the confines of the “pit-to-port” model in its mining sector. This model, characterized by the extraction of raw minerals from mining pits and subsequent transportation to ports for export and further processing, has been a longstanding practice. While this approach has contributed significantly to the global supply of essential minerals, it is not without its challenges.
One notable challenge is the overland transportation of raw minerals to nearby ports. The logistical hurdles associated with this phase can impact the efficiency and competitiveness of the industry, especially in regions with insufficient transportation infrastructure. Moreover, a critical drawback of the pit-to-port model is the limited value addition within Africa. The bulk of processing and refinement activities occur outside the continent, hindering economic development, job creation, and the nurturing of local expertise.
Geopolitical considerations also come into play as minerals are exported to external locations for processing. External nations involved in these processing activities gain influence over critical mineral supply chains, raising concerns about the economic and strategic interests of African nations.
However, within these challenges lie opportunities for transformation. African nations can strategically invest in transportation infrastructure, enhancing the efficiency of transporting raw minerals. Simultaneously, there is an opportunity to move beyond mere extraction by investing in local processing capabilities. This shift fosters economic diversification and allows for greater value addition within the continent, contributing to sustained economic growth.
The envisioned transformation is not just about maximizing revenue from mineral exports; it extends to the creation of skilled jobs and the development of a robust and diversified economy. As African nations strategically invest in infrastructure and local processing, they can reshape the narrative of the mining sector. This transformation becomes a pathway to sustainable development, positioning Africa as a key player in the global mineral supply chain.
In essence, while the pit-to-port model has been a hallmark of Africa’s mineral industry, acknowledging its challenges and seizing the opportunities for change is imperative. Through a commitment to local processing and strategic infrastructure investments, African nations can redefine their role in the global mining landscape, fostering economic growth and sustainable development.
Diversifying Partnership: Curse or Cure
In the complex landscape of global mineral partnerships, African nations are tactically expanding their engagements to diminish dependence on a singular global power. This calculated move stems from aspirations for economic robustness, geopolitical equilibrium, and advantageous negotiation terms for resource extraction. The multifaceted consequences of this strategic diversification become apparent as African nations navigate these intricate relationships.
The diversification of partnerships serves as a shield against vulnerabilities arising from supply disruptions triggered by geopolitical tensions or shifts in policies from a dominant global power. Through negotiations with a diverse array of partners, African nations can secure advantageous terms for resource extraction, encompassing equitable pricing, technology transfer, and investments in local infrastructure. Beyond mere economic benefits, this diversification contributes significantly to the overall economic development of African nations. Collaboration with various global powers attracts investments, cutting-edge technology, and expertise, nurturing the expansion of the mining industry and its ancillary sectors. However, this endeavor necessitates a delicate geopolitical balancing act to foster positive relations with diverse partners. The strategic shift towards diversified partnerships intricately reshapes global power dynamics. As African nations position themselves as pivotal contributors to the resource supply chain, they instigate competition among global powers vying for access to critical minerals. Simultaneously, the pursuit of diversified partnerships sparks potential for increased regional cooperation among African nations, fostering stability and economic integration.
This strategic recalibration may also lead to the formation of strategic alliances and rivalries. Collaborative ventures for resource development could reinforce regional stability, while heightened competition among external powers for influence over strategic minerals introduces a layer of geopolitical complexities. In essence, the strategic diversification of mineral partnerships by African nations encapsulates a multifaceted strategy aimed at fortifying economic resilience,
securing favorable terms, and asserting influence on the global stage. This transformative shift introduces nuanced dynamics to global power relations, molding the geopolitical landscape surrounding critical mineral resources on the African continent.
Theoretical Framework
In the intricate web of supply chain dependencies on strategic minerals, the unfolding geopolitics in Africa reveals a nuanced tale of great power rivalry. The strategic minerals, essential for various industries, including renewable energy, batteries, and technology, have become focal points in a geopolitical chessboard where major global powers vie for dominance and influence.
Africa’s significance in the global supply chain of strategic minerals amplifies the geopolitical stakes. As nations diversify their partnerships to secure access to these critical resources, intricate dependencies emerge within the supply chain. The very foundation of global industries is intertwined with Africa’s mineral wealth, necessitating a closer examination of the geopolitical dynamics at play .Supply chain dependency on strategic minerals manifests in various dimensions. Nations, in their pursuit of energy transition and technological advancements, rely on a steady and uninterrupted flow of these minerals. Disruptions in the supply chain can reverberate globally, impacting industries that are pivotal for economic growth and sustainable development.
Great power rivalry intensifies this interdependence. The geopolitical maneuvering of major players, including the United States, China, the European Union, and others, unfolds against the backdrop of securing and controlling the supply chain of strategic minerals. The quest for resource security and dominance in the production and processing of these minerals shapes geopolitical strategies and alliances.
China’s dominant position in the production and refinement of many strategic minerals accentuates the supply chain dependency. As a major player, China’s influence over the supply chain dynamics raises concerns among other global powers, particularly the United States and the European Union. The urgency to reduce dependency on a single global power becomes apparent as nations grapple with the strategic implications of a concentrated supply chain.
In this geopolitical landscape, Africa emerges not only as a source of these critical minerals but also as a key player influencing global power dynamics. The continent’s decisions regarding partnerships, resource extraction policies, and infrastructure development reverberate through the supply chain, shaping the geopolitical chessboard.
Unraveling great power rivalry in the context of supply chain dependencies on strategic minerals necessitates a comprehensive analysis of the economic, political, and security implications. The choices made by nations, the alliances formed, and the policies implemented have far-reaching consequences, underscoring the intricate interplay between geopolitics and the global supply chain of essential minerals in Africa.
Methodology
The research methodology employed in this study combines qualitative and quantitative research designs to comprehensively examine the changing approach of great powers. By utilizing both qualitative and quantitative methods, the study aims to provide a more holistic understanding of the dynamics at play. To achieve the primary objective, this analysis involves reviewing historical data, examining trade and investment patterns, and studying relations with African nations. Furthermore, the study incorporates quantitative analysis by examining relevant economic and geopolitical indicators, such as trade volumes and investment flows. To address the research problem, the study adopts the dependency theory of the supply chain.The qualitative analysis involves content analysis of speeches, official statements, and media coverage to identify the discursive strategies employed by the great powers for African mineral geopolitics.
Challenges to Unlocking Africa’s Mineral Wealth for Prosperity
Africa, despite its abundance of mineral resources, faces persistent challenges in translating this wealth into widespread prosperity. Historical factors, such as colonial exploitation, set the stage for ongoing economic struggles. Unequal trade relationships, where raw materials are exported at low prices and finished goods are imported at higher costs, contribute to economic dependency.
Corruption within governments and institutions further hinders effective resource management. Misuse of funds earmarked for development projects perpetuates economic stagnation. Additionally, inadequate infrastructure, encompassing transportation and energy, poses obstacles to efficient mineral extraction and export.
Geopolitical challenges, including conflicts and instability in certain regions, disrupt the development and utilization of mineral resources. Wars and political unrest discourage foreign investment and hinder economic progress. Environmental concerns also play a role, as the extraction of minerals can have detrimental effects, and adherence to international environmental standards may limit resource exploitation.
Global commodity prices heavily influence African economies, often dependent on the export of minerals. Fluctuations in these prices impact the revenue generated from exports, affecting economic stability. Furthermore, the lack of economic diversification leaves many African nations vulnerable to market shifts, as they heavily rely on one or a few key minerals.
Addressing these challenges requires collaborative efforts from African governments and the international community. Initiatives promoting transparent governance, infrastructure development, and sustainable resource management can contribute to unlocking the economic potential of Africa’s abundant mineral resources.
Conclusion
In conclusion, the examination of Africa’s mineral wealth and its geopolitical implications reveals a complex landscape marked by historical legacies, contemporary power dynamics, and economic challenges. The continent’s abundant resources, particularly rare earth elements crucial for modern technologies and renewable energy, position it as a key player in global geopolitics. However, persistent issues such as historical exploitation, unequal trade relationships, corruption, and geopolitical conflicts have hindered the realization of Africa’s economic potential .The global competition for strategic minerals has intensified, with major powers like China, the United States, and the European Union struggling for access and influence. Africa’s pivotal role in the supply chain of critical minerals underscores the importance of understanding the multifaceted challenges it faces in harnessing this wealth for sustainable development .Efforts to address these challenges require collaborative initiatives, both within African nations and through international partnerships. Transparent governance, sustainable resource management, and infrastructure development emerge as key pillars in unlocking Africa’s economic potential and reshaping its role in the evolving global geopolitical landscape. As the world transitions towards cleaner energy sources, the decisions made regarding Africa’s mineral resources will not only impact the continent’s economic future but also shape the trajectory of global energy transition and resource competition.
[1] https://www.tandfonline.com/doi/full/10.1080/10220461.2023.2226108
[2] https://www.tandfonline.com/doi/full/10.1080/10220461.2023.2226108
[3] https://www.voanews.com/a/us-china-compete-for-africa-s-rare-earth-minerals-/6957617.html
[4] https://au.linkedin.com/ company/australia-africa-minerals-energy-group
[5] https://asia.nikkei.com/Spotlight/Supply-Chain/Japan-builds-supply-chain-for-EV-battery-minerals-in-Africa