SOUTH Africa hosted the world’s biggest mining investment conference last week, with industry experts in attendance saying the US and China are in a race for the critical minerals — such as cobalt and lithium — that will likely power the projected transition to clean energy.
African countries like the Democratic Republic of Congo have some of the largest deposits of these resources, but China currently dominates the supply chain as well as their refinement and the US wants to reduce its reliance on the Asian giant.
In his remarks at the mining conference in Cape Town, US Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez hinted at this saying, ‘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 — who did not mention China by name — noted that electric vehicles are expected to command half the global market by 2030 and that demand for lithium is expected to increase 42-fold by 2040. China is responsible for some 80 percent of the world’s lithium refining.
Tony Carroll, the director of Acorus Capital and an international adviser to the conference known as the Africa Mining Indaba, told VOA the session came at a critical time for the West.
The Chinese made it a ‘priority to corner the market for critical minerals about two decades ago and supported that strategy with massive public diplomacy and infrastructure investments into Africa — most of which [came] via long-term debt. The West woke up to this strategy too late and have been scrambling ever since,’ he said.
Rare earth minerals are essential for electric vehicle production and expanding the production of green technologies. However, their extraction can come at an environmental or social cost to African countries that have big deposits.
Fernandez echoed remarks made by Pope Francis on his recent trip to Congo denouncing ‘economic colonialism’ in Africa, which could be seen as a swipe at Beijing. He also assured African countries the United States would respect ‘environmental, social, and governance standards.’
‘While late to the game, the US has awakened with more ambition in mining and processing and building alliances with like-minded partners,’ said Carroll, who is also an adjunct professor in the African studies program at Johns Hopkins University.
A first-time sponsor of the Mining Indaba this year was Chinese company Zijin, one of the largest mining groups in the world with interests in lithium, copper and other metals.
Asked for comment by VOA on whether China is now in a race for rare earth metals with the US, as well as other questions about Chinese mining interests in Africa, the PR manager of South Africa Zijin Platinum said the CEO was unable to respond before the deadline for this article.
African governments are now trying to get the best deals for their people. Namibia’s Mines Minister Tom Alweendo told Reuters at the Cape Town conference that his country is insisting that all lithium mined in Namibia has to be processed in the country.
Similarly, DRC President Felix Tshisekedi, who was one of the key speakers at the mining conference, has been demanding better terms from China for several years. China sources the majority of its cobalt from DRC, which produces some 70 percent of the world’s total.
Despite its vast mineral resources, Congo is one of the world’s least developed countries and Tshisekedi said in January it hadn’t benefited from a $6.2bn minerals-for-infrastructure contract with China signed by his predecessor.
‘The Chinese, they’ve made a lot of money and made a lot of profit from this contract,’ Tshisekedi told Bloomberg at the World Economic Forum in Davos. ‘The Democratic Republic of Congo has derived no benefit from it. There’s nothing tangible, no positive impact, I’d say, for our population.’
‘Now our need is simply to re-balance things in a way that it becomes win-win,’ he added.
There are signs Tshisekedi could be moving toward the West.
The administration of US President Joe Biden organised the Minerals Security Partnership last year as a way of diversifying supply chains. Partners include Australia, Canada, Finland, France, Japan, the Republic of Korea, Norway, Sweden, the United Kingdom and the European Union. At its first meeting last year, the DRC was one of the non-partner nations in attendance.
Then at Biden’s US-Africa Summit in December, the DRC and Zambia inked a deal with the US to jointly develop the supply chain for electric vehicle batteries.
‘Dependency on China for rare earths is viewed with alarm,’ said Jay Truesdale, CEO of the risk advisory firm Veracity Worldwide, and a speaker at the Indaba. ‘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.’
Besides the rising tensions between China and the West in Africa, Russia’s invasion of Ukraine will also force mining companies to make hard decisions, Truesdale said.
‘The war in Ukraine has placed greater scrutiny on Russian mining activities across the continent. Russia benefits from a lack of transparency and weak governance where its mining companies operate. African governments are now more closely observing how Moscow trades promises of greater security for deeper access to mineral resources and the state capture that can result,’ he told VOA.
