China has significantly strengthened its control over African minerals through a combination of ownership, strategic investments, long-term contracts, infrastructure development, financial support, and vertical integration. While direct ownership of mines is often used as the primary measure of Chinese control, the reality is far more complex, with additional control mechanisms playing a crucial role.
Chinese mining companies have expanded their ownership of African mines over the past few decades. In 1995, Chinese firms had no recorded mining projects in Africa, but by 2018, they controlled over 60 mines and were involved in numerous projects. Despite this, Chinese companies only accounted for around 7% of the total value of African mine production. However, their control is much more pronounced in certain key minerals. For instance, Chinese companies such as China Moly and Zijin control around 30% of Africa’s copper production and a staggering 50% of its cobalt production, largely concentrated in the Democratic Republic of the Congo (DRC) and Zambia.
Chinese companies have secured long-term contracts with African mines, ensuring a steady supply of critical minerals. In the case of iron ore, several Australian joint ventures with Chinese minority ownership, such as Hunan Valin’s 14% stake in Fortescue, have leveraged long-term contracts to solidify supply chains. These contracts serve to reinforce Chinese influence over production, even in cases where full ownership is not involved.
China has played a major role in building transport infrastructure in Africa to facilitate mineral exports. Railways, ports, and roads are critical to mining operations, especially for bulk minerals such as iron ore, bauxite, and copper. Infrastructure investments, such as the Tazara railway linking Zambia to the Indian Ocean, have historically supported Chinese mineral interests. More recently, China has employed R4I swaps, where infrastructure investments are exchanged for access to mineral resources. This approach has been used in Angola, the DRC, and Gabon, allowing China to secure access to valuable minerals while simultaneously improving transport routes for their export.
Chinese financial institutions have played a crucial role in supporting Chinese mining companies and host African governments. Between 2000 and 2018, Chinese loans to African governments and state-owned enterprises totaled $152 billion. Notably, Angola received nearly 30% of these loans, while Ethiopia, Kenya, and Sudan collectively accounted for 20%. Mineral-rich countries such as Zambia and the DRC received nearly $14 billion, with a significant portion allocated to resource extraction. This financial backing has enabled Chinese companies to outcompete Western firms and secure valuable mining concessions.
Unlike Western financial institutions such as the International Monetary Fund (IMF) and World Bank, Chinese loans often come with fewer conditions regarding governance and transparency. This has made Chinese investments particularly attractive to African governments seeking development funding without stringent political or economic reforms.
Chinese control over African minerals extends beyond extraction. Vertical integration allows China to process raw materials domestically, increasing its overall control of the global supply chain. In the case of cobalt, Chinese firms not only own mines in the DRC but also dominate the refining process, further amplifying their influence. The lithium industry is following a similar trajectory, with Chinese firms increasing their presence in extraction and processing.
Market knowledge also plays a critical role. The presence of Chinese trading companies enhances China's ability to dictate pricing, logistics, and supply chain decisions, further strengthening its control over African minerals.
As China continues to expand its influence in African mining, the United States has several strategies it can employ to counterbalance this trend. One crucial approach is to strengthen diplomatic engagement and bolster multilateral alliances. By collaborating closely with African nations and international institutions, the US can promote transparency and equitable governance of resources. Leveraging platforms like the African Union and various international forums, the US can help establish standards that encourage competition among investors, which would diminish the disproportionate leverage held by any single foreign entity. Additionally, supporting initiatives that enhance the capacity of African governments to negotiate better investment terms can create a more balanced investment landscape.
Another key strategy involves investing in alternative financing and infrastructure development. By providing competitive financing through agencies such as the US International Development Finance Corporation (DFC) and fostering public-private partnerships, the US can offer an appealing alternative to Chinese loans. These financial packages could combine with technical assistance and investments in sustainable infrastructure projects, meeting international standards and thereby reducing reliance on Chinese-funded initiatives.
Moreover, the US can leverage its technological advantages to promote technology transfer and sustainable mining practices in Africa. Encouraging American mining firms to partner with local companies would facilitate the transfer of best practices concerning health, safety, and environmental protection areas where Chinese operations have faced criticism. This collaboration would not only enhance the quality of mining projects but also empower host countries with greater bargaining power.
Enhancing market access and refining trade policies represents another vital avenue for the US. By implementing targeted trade agreements, the US could secure market access for minerals sourced from African countries. By fostering an environment that diversifies African mineral exports, this strategy could diminish the pricing and logistical advantages that currently favor Chinese-controlled supply chains.
Furthermore, the US can utilize its influence within international regulatory bodies to advocate for greater transparency in foreign direct investment and stricter environmental standards. By exposing non-compliant practices and rallying international support behind these issues, the US can pressure Chinese companies to adhere to higher global standards, thus leveling the playing field for all competitors.
Finally, it is important for the US government to encourage private sector leadership in African mining. By offering tax incentives, risk mitigation tools, and regulatory support, the government can incentivize American companies to expand their investments in the region. This increased engagement from the private sector would provide host countries with more alternatives, sifting away the overreliance on Chinese investments and fostering a more balanced economic relationship.
China’s grip on African minerals is the result of a multifaceted strategy combining direct ownership, long-term contracts, infrastructure development, financial influence, vertical integration, and market knowledge. While its total share of African mine production remains relatively modest, China has established dominant positions in critical minerals such as cobalt and copper. However, the United States can fight back by strengthening its diplomatic, financial, and technological engagement in the region. Through a combination of multilateral alliances, alternative financing, technology transfer, improved trade policies, and strategic regulatory frameworks, the US can help ensure that African nations benefit from a competitive and balanced global mining landscape.