The Economist recently published an analysis showing that the US plans to use Africa as a supplier of important minerals to break China's dominance over these minerals.
China is the global leader in refining strategic minerals, refining 68% of the world's nickel, 40% of copper, 59% of lithium and 73% of cobalt, according to the Brookings Institution.
US officials are worried about China becoming “an OPEC (Organization of the Petroleum Exporting Countries) for one of the key minerals,” and are engaging in more active diplomacy in Africa.
America ready to act?
US Vice President Kamala Harris embarked on a week-long tour of Africa starting in late March. During a meeting with Tanzanian President Samia Suluhu Hassan on March 30, Harris said Tanzania is building a major mineral processing facility with US support that will supply battery-grade nickel to the US and global markets by 2026, according to the South China Morning Post (SCMP).
This is the latest move to reduce the US’s dependence on China for resources. Late last year, the US signed a memorandum of understanding with the Democratic Republic of Congo (DRC) and Zambia to help the two countries establish new supply chains for electric vehicle batteries.
US Vice President Kamala Harris and Tanzanian President Samia Suluhu Hassan at a press conference in Dar es Salaam, Tanzania on March 30.
In a recent commentary by the Center for Strategic and International Studies (CSIS, USA), Mr. Christian-Géraud Neema, senior associate of the Africa program at CSIS, said that the memorandum of understanding with the DRC and Zambia “signals the Biden administration’s willingness to act and reduce its dependence on China as much as possible.” He continued: “The US is taking a step towards a fairly concrete approach by addressing the economic and industrial needs of the DRC and Zambia.”
The DRC is by far the world’s largest exporter of cobalt, accounting for about 70% of global production. The country is also rich in diamonds, gold, copper, tin, tantalum and lithium, and is Africa’s largest copper producer. Zambia is also rich in copper and cobalt.
Chinese companies have made major investments in both countries and are sourcing 60% of their cobalt from the DRC, according to SCMP . In addition to the DRC, Chinese companies have also made inroads into Zimbabwe, which is estimated to have Africa’s largest untapped lithium reserves. Lithium is a key raw material in electric vehicle batteries.
“Important Battlefield”
Will McDonough, CEO of US asset management firm EMG Advisors, predicts the biggest global geopolitical and macro issue in the next 10 or 20 years will be control of critical minerals or battery metals, with Africa being a key battleground, according to SCMP .
“We cannot allow China to become the OPEC of lithium, copper, cobalt and nickel, otherwise any future development of this green energy will be entirely dependent on their permission and price setting. Dependency is not good for free trade or innovation, but it is the reality we face,” Mr. McDonough warned.
In addition, Mr. Chris Berry, President of commodity consulting firm House Mountain Partners (USA), predicts that it will take many years for the US to have the opportunity to achieve a mineral supply chain for batteries without "touching" China in any way.
Workers work near a waste dump at a Chinese company's mining site in the Democratic Republic of Congo on March 11, 2019.
Screenshot Xinhua News Agency
Meanwhile, David Shinn, an expert on China-Africa relations at the Elliott School of International Affairs at George Washington University (USA), commented that Chinese state-owned companies will take greater risks and even accept losses on investments that affect China's core security interests. "Chinese state-owned enterprises also have easier access to government finance than private US companies," commented Mr. Shinn.
However, US companies may offer higher environmental standards, an important consideration in mining and producing minerals, and may also be willing to transfer more skills to their African partners, according to Mr. Shinn.
Africa is home to about 30% of the world’s mineral resources, making it a key destination for meeting mineral demand, according to The Economist . The International Energy Agency predicts that clean energy technologies will require 40 times more lithium, 25 times more graphite, and about 20 times more nickel and cobalt by 2040 than they did in 2020.
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