Europe, US racing to challenge China’s dominance over vital African minerals market, but will they succeed?

Now both countries are being courted by the EU and America.

On the margins of the Global Gateway Forum, the EU signed a memorandum of understanding (MOU) with the DRC and Zambia to develop the critical and strategic raw materials value chains. A similar deal was struck with the US last year.

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China-built hydropower station in Angola enters main construction phase

At the October 25-26 forum, the US and the EU also agreed to help Angola, the DRC and Zambia develop the “Lobito Corridor” – a transport link that will connect southern DRC and northwest Zambia to regional and global trade markets via the Angolan port city of Lobito.

The US had initially pledged US$250 million for a study of the corridor.

Analysts said the aim was to establish a supply chain with less of a Chinese imprint. The West could then play catch-up later by cementing economic and political influence through trade agreements.

But questions remain over just how willing the private sector would be to fund such projects.

One of the main segments of the Lobito Corridor is Angola’s Benguela railway, a 1,344km (835 mile) track that connects Lobito port to the eastern Angolan city of Luau on the border with the DRC.

The railway was the primary mineral transport link before it was shut down during the 1975-2002 Angolan civil war.

As the world transitions to green energy, more countries want to control the minerals market vital to the production of electric vehicles. Photo: AFP

After the war, Angola rebuilt the railway using a US$1.8 billion oil-backed credit line from China Eximbank. The reconstruction by China Railway 20 Bureau Group Corporation was completed in 2014.

But across the border in the DRC, the track is in bad shape and Zambia does not have a rail link to the corridor. The deal with the EU and the US includes the building of the Zambia-Lobito railway link.

Chinese companies are also making infrastructure upgrades to enable them to move minerals to port easily. In March, subsidiaries of Jiayou International Logistics and Zijin Mining Group announced a US$363 million joint investment to improve roads and infrastructure between the DRC and Lobito.

Meanwhile the EU and US continue to talk up the transport corridor.

“The Lobito transport corridor will also be a game changer to boost regional and global trade,” European Commission president Ursula von der Leyen said after the signing of the MOU in Brussels on October 26.

The US Department of State said: “The new rail line, connecting northwest Zambia to the Lobito Atlantic Railway and the Port of Lobito, represents the most significant transport infrastructure that the United States has helped develop on the African continent.”

At the forum, the EU also signed another deal – this time with Namibia on raw materials value chains and renewable hydrogen, supported by €1 billion in investments.

The 27-nation bloc will also support a study for the development of the port of Walvis Bay, halfway down the Namibian coastline, into an industrial and logistics hub for the region.

US sees chance to challenge China’s grip on key African trade corridor

But China is in no way taking its eyes off Africa. At the belt and road forum in Beijing last month, China announced it would invest in the second phase of the Kamoa copper and cobalt mine in the DRC, and the Kururi potash mine project in Eritrea – as potash salt has become a key value-added material for lithium-metal batteries.

Christian-Geraud Neema, a Congolese mining and policy analyst, said the US and EU are working on building and developing new supply chains and routes to serve their markets.

“The goal would be to have a supply chain with less Chinese imprint or influence on it,” Neema said of the Lobito Corridor deal. But that corridor would only make sense if they first find cobalt and copper suppliers in the DRC and Zambia, he added.

Since the DRC is refining copper, currently listed as a critical mineral by the EU and the US, the Lobito Corridor would be useful to deliver supplies directly to Europe.

That usefulness would increase significantly if the DRC developed a robust cobalt processing industry, as Europe does not have this capacity.

Hence, the funding of the corridor can be seen as a global approach from the EU and the US to create and develop their own alternative supply chain of critical minerals out of that region, according to Neema, who is also the francophone editor at the China Africa Project.

A buyer from China watches as sacks of cobalt are weighed near the city of Kolwezi in the DRC. Photo: Corbis via Getty

Gyude Moore, a senior policy fellow at the Washington-based Centre for Global Development and a former minister in Liberia, said China’s dominance in both the mining and transport sectors in the region means that the West is playing catch-up – so the Lobito Corridor provides a substantive stake for the West.

“Fundamentally, this is about a race to lead the transition to net zero and the new economy it will engender. Access to these minerals will determine winning and losing, and in this context it goes beyond simply opposition to the Belt and Road Initiative.”

Poorva Karkare, a policy officer on African Economic Integration at the European Centre for Development Policy Management (ECDPM), said the EU’s dependence on China for inputs such as solar panels or batteries further highlights Europe’s vulnerability in the energy transition.

“To avoid supply chain disruptions, whether due to external shocks as we saw during the Covid-19 pandemic or due to weaponisation of the EU’s dependence as we learned in the case of Russia, the EU is actively investing in third countries, including in Africa, to secure access to critical raw materials,” she said.

Carlos Lopes, a professor at the University of Cape Town’s Nelson Mandela School of Public Governance, said China’s early and comprehensive involvement in Africa had enabled it to not only secure critical minerals but also establish economic and political influence through trade agreements, investments and infrastructure development.

This strategic advantage puts the United States at risk of continued dependency on China as an intermediary in the critical minerals supply chain, he said.

“The Lobito Corridor could play a pivotal role in providing a more direct route for mineral transportation from the DRC to the Angolan coast, reducing reliance on what is perceived as Chinese-controlled routes,” Lopes said.

“Collectively, these initiatives to counter China’s Belt and Road Initiative ignore the African desire for value addition and reduction of commodities dependency.”

South China Morning Post