Cobalt from the Democratic Republic of the Congo powers your electric vehicle battery. Rare‑earth magnets from Inner Mongolia spin the offshore wind turbines that feed Europe’s clean‑energy grid. Gallium and germanium, refined almost exclusively in China, sit inside your phone’s semiconductors.
In less than two decades, China has emerged as a major player in critical mineral extraction and processing. Its long-term investments and infrastructure development strategies have helped secure access to key resources, with significant influence over supply chains that are now central to global energy and manufacturing policy.
In response, global governments have made efforts to diversify supply sources, but much of the groundwork for today’s mineral supply chains was laid years ago through strategic infrastructure agreements and political ideologies.
This article traces how that strategy works, why Europe and the United States are suddenly dependent, and what opportunities – and risks – it creates for African producers, especially South Africa.
Why Critical Minerals Became Strategic Assets
Modern life runs on tiny amounts of rare elements. Copper carries power through city grids; cobalt and nickel store it in batteries; rare‑earth metals help turbines and smartphones stay light and strong. Demand for these materials climbs each time a country sets a net‑zero carbon emission target or announces a new gigafactory.
Extraction matters, but processing matters more. Ore only turns into battery-grade metal after it is crushed, leached, roasted, and purified. In other words, control of the midstream step brings pricing power and significant commercial leverage. To illustrate, today China refines:
- 85-90% of rare earths
- 65% of nickel
- 68% of cobalt and a significant portion of South African manganese
This ore processing bottleneck worries Washington, Brussels, and Tokyo as their ambitious climate plans are limited by their refining capacity and supply of critical metals. China’s temporary export restrictions on gallium and germanium in 2023 also highlighted how supply decisions can carry geopolitical weight.
China’s Early‑Mover Play: Swap Railways and Airports for Rocks
How did China build such a strong position in the mining sector—and why are other countries now adopting similar strategies? Through resource-for-infrastructure agreements that supported economic development in African and Latin American countries.
- Asset‑for‑infrastructure loans: Case in point. The Sicomines joint venture in the DRC traded copper-cobalt rights for roads, hospitals, and a power plant—a textbook case of China’s mineral acquisition through infrastructure diplomacy. Governments received tangible infrastructure while Chinese firms secured long-term access to minerals.
- Equity, not just offtake: Chinese firms now hold the majority stakes in 15 of the 19 largest cobalt projects in the DRC, Uranium mines in Namibia and two flagship copper mines in Peru. Ownership guarantees influence long after a loan is repaid.
- Serial lending: Once a mine starts, Chinese banks return with expansion finance. Mines backed by Beijing receive, on average, three to four follow‑on loans.
- Integrated logistics: A railway in Angola ties iron‑ore pits to a port, which loads ships built in Chinese yards that, in turn, deliver the ore to Chinese smelters. Each link lowers Beijing’s costs and raises barriers to entry for the rest of the world.
That said, this approach is less about quarterly profit than about certainty. While some analysts questioned the increase in cobalt production despite price drops, others noted that this may reflect a long-term strategy aligned with China’s 2060 carbon neutrality target. In addition, China needs to secure a source for its internal consumption and with a strong manufacturing industry, will become a net exporter of refined metals and products.
Three New Forces Changing the Board
While China was laying track and pouring concrete, three broader trends gained strength. Together, they form the backdrop for the next phase of the contest.
1. Western Re‑Engagement - Late and Fragmented
Washington launched the Minerals Security Partnership, a response to years of China’s foreign mining investment across Latin America and Africa; Brussels adopted the Critical Raw Materials Act; while Canberra, Ottawa, and Tokyo announced exploration grants.
Western proposals often come in fragmented formats—technical assistance here, equity investment there, a retail methodology—whereas China tends to offer more integrated packages, which can be attractive for governments balancing infrastructure and development goals. The Chinese approach is to mine, refine, consume, manufacture, and export – they go in big, with commitment.
2. The “Just” Energy Transition
Investors and communities now demand that mining be cleaner, fairer, and more local. Extractive projects that replicate the old ‘dig-and-ship’ model face protests and financing risks. This creates space for producer countries to insist on local processing, skills transfer, and renewable power. Zimbabwe’s lithium ore export ban and Zambia’s push for cathode production are early signs.
3. The African Continental Free Trade Area (AfCFTA)
AfCFTA promises a single African market of 1.3 billion people that could tilt the critical minerals supply chain back toward local value addition. For miners, it could mean duty‑free and tariff-free movement of concentrates to regional refineries, shared standards for royalties, and collective bargaining with buyers. If implemented, the AfCFTA can amplify Africa’s voice in price talks; however, the policy groundwork is only just beginning.
Africa’s exploration pipeline signals the next bottleneck.
S&P Global Market Intelligence’s 2024 World Exploration Trends pegs the continent’s combined exploration budget at just US$1.27 billion, barely a third of Latin America’s US$3.38 billion and well behind Canada (US$2.44 billion), Australia (US$2.2 billion), and the United States (US$1.62 billion). Extremely low considering the metals market is US$1.4 trillion in value per annum.
Who writes the cheques?
Deloitte’s Technical Mining Advisory shows Canadian firms supply 29% of Africa’s annual exploration budgets, Australians 26%, and UK companies 18%. Chinese companies fund only 3%, and African outfits 7%. China is buying resources and not exploring Greenfields, a distinct advance in timing of the projects. Yet China is hardly retreating, as Griffith University records a 114% jump in Chinese mining investment into Africa in 2023 compared with 2022, signalling a pivot from Greenfields drilling to downstream infrastructure, mining and processing deals.
Logistics gaps still bite.
“The main challenge for mines in Africa is the lack of local sourcing. Lacking or inadequate infrastructure at ports and limited shipping capacity pose serious challenges in securing consistent and reliable supply to remote sites,” notes Gavin Erasmus, VP & Global Sector Head – Mining, DHL Global Forwarding Council.
Recent improvements in Southern Africa have already lured global majors back: BHP re-entered the region via two Botswana projects under its BHP Xplor accelerator and a strategic stake in Tanzania’s Kabanga Nickel, a Lifezone Metals subsidiary.
South Africa’s Fork in the Road
South Africa holds the world’s largest manganese reserves and rich seams of vanadium and platinum, which is exactly the type of green energy materials gigafactories need. Yet high electricity prices, ageing railways, and high fuel prices have seen all the manganese smelters close down.
Iron and manganese ore must travel 1,400 km to the coast, where it is shipped to Asia for smelting, and then returns as finished steel. In 2019, Saldanha Steel closed its operations, resulting in job losses and the collapse of local economic infrastructure. It is hard to rationalise how manganese is mined in South Africa, shipped across the world, used to create steel, and then the steel is simply imported into South Africa. The closure of alloy producers in RSA has seen a substantial increase in export tonnage from approximately 4 Mt per annum to over 13 Mt per annum.
A turnaround is possible:
- Power: Sourcing power from solar fields in the Northern Cape and hydropower wheeled from the Inga Dam could halve current smelting costs. The next step is to re-evaluate the Inga Dam scheme, specifically the framework proposed by the World Bank. Establishment of local, smaller manganese smelters in the Northern Cape can unlock value for the producer, increasing the value in use of the commodity.
- Skills: A proposal for a mandatory practical year for geology, mining and metallurgical students, offers a direct path to strengthening the industry. Graduates would enter the workforce with immediate, relevant experience, making them more effective staff. This injection of skilled talent would directly support the growth of new and entrepreneurial companies. The establishment of internal consumption through proper application of resource rent will promote sustainability and transform African countries from mere producers and consumers into consumers, manufacturers and exporters. .
- Logistics: Public-private rail concessions can drive new capital investment in logistics. This development would allow local smelters to restart processing raw materials, which in turn creates jobs, advances workforce skills, and stimulates the local mineral processing and manufacturing industries. Raw materials should be reworked in South Africa and not be exported.
Improved infrastructure and energy costs could position South Africa as a supplier of higher-value processed materials, helping diversify trade partnerships across the continent and beyond.
Guided Tour of the New Landscape - Link by Link
To understand how supply chains function, follow a tonne of cobalt from pit to plug:
| Supply‑chain step | Who leads today | What could change |
|---|---|---|
| Mining | DRC, Indonesia, Australia–hotspots in China and Africa mining partnerships. | More exploration in Zambia, Namibia, as Western finance returns. |
| Rail/port | China‐financed corridors | AfCFTA corridors funded by joint African–EU green bonds. |
| Refining | China (74%) | Planned plants in Indonesia, Finland, and Saudi Arabia. |
| Battery precursor | China and South Korea | US Inflation Reduction Act subsidies for local cathode plants. |
| Cell assembly | China (leading), EU catching up | EU gigafactories need non‑Chinese supply to qualify for green incentives. This is where Europe and the US need to ensure that supply is facilitated in these areas, supplying their factories. |
| Recycling | China and Belgium | Emerging startups in the US and South Africa. |
Each new refinery or rail spur can tilt the leverage. The question: who pays, and under what terms?
A Brief Detour: Why Western and African Goals Can Align
Western firms need diversified supply and must secure their own mineral supply. You have two options: either find and develop the resource, start mining it, beneficiate and rework it, or purchase finished goods. African governments want value added at home. Those aims join neatly if three things happen:
- Co‑investment in processing. A nickel sulphate plant in Tanzania or a cobalt refinery in Zambia can feed European gigafactories while keeping jobs local, manufacturing local, and value addition local.
- Transparent contracts. Public royalty dashboards and third-party audits help citizens trust deals, and they also help lenders lower risk premiums.
- Regional integration. If copper cathodes move tariff-free from Zambia to Kenyan cable plants, everyone saves money, and AfCFTA proves its worth.
China’s long-term strategy offers one model. A different approach—focused on shared processing, transparency, and regional collaboration—could support both African development goals and global supply resilience. There are two models, the first one is the extraction and export of raw materials, the second is the extraction, reworking and refining, and value addition.
Final Thoughts: The Quiet Power of Patient Strategy
Mineral riches and endowments are static, but strategic positioning is not. China acted early to link transport infrastructure with mineral access. Western governments and African leaders are now sketching counter‑moves, but success hinges on turning sketches into funded projects that communities welcome and governments support. A legacy that should be rewritten to Africa’s benefit.
If not, mineral flows will continue to follow existing infrastructure routes—many of which were financed years ago—and reflect the investment decisions of the past.
Resource rent is dear, a tax on a finite resource; if well spent, sustainable growth can be established and maintained—if not, Africa will cripple itself for centuries.
Author
Oscar van Antwerpen
