Africa is a highly rich source of raw materials, including lithium, rare earth elements, cobalt, and tungsten.
These resources are used in a wide range of applications, from electric vehicles to AI data centers and weapons systems.
For this reason, the world’s two major powers, China and the US, are fiercely competing to dominate this market.
CHINA’S POWER IN AFRICA AND THE US RESPONSE
For a long time, China has been the largest player in the global critical minerals and metals market in Africa.
Thanks to extensive foreign mining investments, it has had easy access to these resources. Additionally, China holds a strong position in processing global supplies, and its threat to restrict exports has raised alarms in the US.
As a result, the US has increased its investments in Africa. According to official data from the China-Africa Research Initiative at Johns Hopkins University, the US invested $7.8 billion in Africa in 2023, overtaking China for the first time since 2012.
US INVESTMENTS LED BY: DFC
US investments are managed by the US International Development Finance Corporation (DFC). This fund was established by President Trump with the goal of “countering China’s presence in strategic regions.”
Last year, investments continued, and Rwanda-based mining company Trinity Metals received a $3.9 million grant from the DFC to develop its three mines across the country.
AFRICA’S NATIONAL INTERESTS MUST COME FIRST
While this competition has increased the flow of capital into Africa, economist Sepo Haihambo emphasizes that African countries must safeguard their national interests when negotiating with US entities:
“Expecting Americans to come and offer the best terms on behalf of Africa is unrealistic. Therefore, Africa needs to prepare well for these negotiations and be clear about the outcomes it wants.”
Haihambo also recommends moving beyond simple “cash-for-minerals” deals:
“Different frameworks can be considered, such as production sharing agreements, joint ventures, or local equity participation. This way, African countries could create sovereign wealth funds to invest in developmental areas.”
She further notes that processing minerals on the continent, rather than exporting them raw, would generate greater revenue for Africa.