China is moving in on Africa and South America to strike alliances and lend money to mineral resource-rich African countries in a bid to position itself as leading source for minerals of the future.
Other countries like Russia is thought to be providing shadow “security services” in some African nations with a mercenary organization with links to the Kremlin in order to gain a foothold in the global race to secure critical minerals.
China and Russia are moving in African countries rich in mineral resources to gain access to their reserves in legislations with low environmental standards, cheap labour, and few regulations, Ariel Cohen, Senior Fellow at the Atlantic Council and founding principal of risk advisory International Market Analysis, notes in Forbes.
According to a report from energy website, OilPrice, China is lending money and working with African nations as part of its Belt and Road initiative, while Russia is reportedly moving in with the Wagner group, a private military group thought to have ties to the Kremlin. Russia denies any state involvement with the group or its activities in Africa, most recently in the Central African Republic and Mali.
Apart from looking to extract mineral resources at home, the U.S. and the West should develop strategic critical mineral reserves, similar to the U.S. Strategic Petroleum Reserve (SPR), to use in times of supply disruptions, Cohen says.
There are fears that shortfalls of rare earths and key minerals for the energy transition could trigger a global race. However, many African governments are yet to fully articulate a strategy to fully exploit their resources.
The minerals of the future will be used to produce car batteries and other clean energy technologies including Nickel, Aluminum, Phosphorus, Iron, Copper, Graphite, Lithium, Cobalt, Manganese and are present in Nigeria offering respite as climate concerns erodes oil’s future.
Read also: Why Nigeria needs to diversify economy through solid minerals development
Nigeria has vast deposits of some of these minerals such as Iron ore, Copper, Manganese and Graphite but they are not on the government’s priority lists of minerals to develop. Only Iron ore features due to the industrialization potential steel can offer the country.
Western countries are getting worried.
The United States for example imports more than half of its annual consumption of 31 of the 35 critical minerals, the Department of Energy said last year. America does not have domestic production for 14 of those critical minerals and is completely dependent on imports to supply its demand.
As of early 2021, the U.S. imported 80 percent of its rare earth elements (REEs) directly from China, with remaining portions indirectly sourced from China through other countries, the agency said.
In 2020, China accounted for 85 percent of global production of refined rare earth products, with other Asian countries (Malaysia, India, and Vietnam) and comparatively minor European operations accounting for the remainder, Wood Mackenzie said in an analysis of REEs in October 2021.
“China also consolidated its domestic rare earth industry into six state-owned enterprises, giving it greater control over the supply and pricing of rare earth exports globally,” WoodMac’s analyst Ross Embleton and David Merriman, Manager, Battery & Electric Vehicle Materials, said.
According to Roskill, a Wood Mackenzie commodity research business, China accounted for 54 percent of global rare earth elements mining in 2021 and for a massive 85 percent of refined REE supply in the world.
To compare, North America accounted for 18 percent of mining of REEs last year, and for ZERO refined supply of those elements.
“The geographic concentration of rare earth mining and refined production has long raised concerns over the potential for supply disruption and the wide-ranging end-use markets they serve,” WoodMac’s Embleton and Merriman said.
Some 90 percent of neodymium (NdFeB) magnet manufacturing currently takes place in China, despite efforts to diversify mined and refined supply.
