Mineral resources: blessing and curse of African States

As a war in the Eastern Congo unfolds - partly motivated by hidden interests in accessing strategic mineral resources necessary for the energy transition (so called “green minerals”) - a report from the African Policy Research Institute (APRI) titled “Mapping Africa's Green Mineral Partnerships” sheds light on the existing agreements in the field of the exploitation of such minerals that are in place among African countries and foreign industrial powers including the United States, China, the United Kingdom, Turkey, Saudi Arabia, the United Arab Emirates, Russia, India, South Korea, Japan, Indonesia and the European Union.

The report reveals that at present about thirty countries in the continent have concluded a total of 65 agreements with foreign powers for securing critical minerals supply chains. The problem, APRI notes, is that in most cases there is no way to understand their exact content, as most of them are not publicly accessible. Moreover, their conclusion is typically the result of opaque negotiations happening during state visits or international forums. This comes at a time when the African Development Bank is considering, based on a recommendation formulated by KPMG in a recent report, the development of a “non-circulating currency” alternative to dollars and euros, as an innovative financing mechanism for project investments in Africa, particularly in the energy sector. Aimed at overcoming foreign currency volatility and convertibility risks, the main characteristic of such currency is that its value will be pegged to a basket of critical minerals that are particularly stable in their value.

The need for foreign industrialized nations to access to the Africa’s immense green mineral resources was pointed out recently by the US Institute of Peace (USIP), an American think-tank tasked with promoting conflict resolution and prevention worldwide. In predicting future growth in demand for these minerals as a consequence of the growing “electrification” of industrialized economies, USIP published a study in April 2024 which highlighted the exposure of the mining sector in Africa to possible predatory behaviors on the part of various global actors worldwide. The global rush to mineral supplies, according to the study, bears the risk of undermining the African development and security, especially if investments in this sector are purely directed towards extractive activities, ignoring on-site value addition. The study also highlighted the possible risk of an increase in corruption and human rights abuses in mineral resources-rich African nations, including of child labor exploitation.

At the top of the list of foreign powers that have concluded cooperative agreements with African countries for green mineral exploitation there is China (11 agreements concluded predominantly with Southern Africa nations), followed by India (9 agreements), Turkey and Saudi Arabia (8 agreements each), Japan, Indonesia and Russia (5 each), the European Union (4), the United Kingdom and South Korea (3 agreements each), and the United States and the United Arab Emirates (2 agreements).

The APRI report highlights the need for greater transparency and better accessibility of these agreements. This is critical to better understand their implications in the fields of economic development, democracy and the protection of human rights. Even more important, in our opinion, is the need to verify that these agreements include adequate provisions aimed at ensuring a strict traceability of these minerals, so to mitigate the risk that their traffic will be channeled from the countries of extraction to neighbouring nations that have concluded the aforementioned agreements with a foreing partner. Indeed, this situation could lead to an intensification of cases of smuggling and fuel local conflicts for the control and exploitation of these resources.

Although it's important to remember that conflicts in Africa have multiple causes, the exploitation of natural resources is undoubtedly a major contributing factor, often intertwined with other issues like historical grievances, ethnic tensions, political instability and external pressures to supply ever-increasing quantities of such minerals. It is therefore urgent to open a debate between policymakers, experts and academics in Africa to evaluate the impact of these cooperation agreements that are being concluded by African countries with actors external to the continent. And the key condition for carrying out this exercise is to ensure a better transparency not only of the texts of such agreements, but also in their negotiations.