CETRI
On the sidelines of the UN General Assembly in September 2024, a significant meeting took place. Under the Minerals Security Partnership (MSP) a group of 14 countries and the European Union (EU), joined forces to finance the Kabanga Nickel Project in Tanzania, one of the world’s largest untapped nickel deposits. As nations push to secure the critical minerals needed for clean energy technologies like electric vehicles, batteries and renewable energy systems, Africa’s vast resources are being thrust into the spotlight. However, while these partnerships promise investment, they also raise concerns about who truly benefits from Africa’s mineral wealth.
The MSP members include the USA, Australia, Canada, Finland, France, Germany, India, Italy, Japan, the Republic of Korea, Norway, Sweden, the UK and the EU. There is no African country in the grouping, which is alarming. There is concern that Africa’s rich deposits of critical minerals will lead to a new wave of exploitation of the continent and green-neo-colonialism.
Countries such as Tanzania, South Africa, and the Democratic Republic of Congo hold a large share of the world’s cobalt, manganese, and nickel reserves. There is a growing fear that unequal partnerships could fuel environmental damage and deepen economic inequalities. There must be fair trade agreements, local benefits, and a departure from the historic patterns of extraction, where external powers profit while African communities bear the brunt of the costs.
The EU’s regulatory power
The EU holds considerable regulatory power, shaping the global economic rules that countries, including those in Africa, must follow. Through policies like the Green Industrial Plan, the Carbon Border Adjustment Mechanism (CBAM), and the Critical Minerals Act, the EU exerts influence on how African nations can participate in global trade, especially in green industries. While these policies aim to promote sustainability, they inadvertently create significant barriers for African countries pursuing green industrialization and integration into the global economy.
The CBAM imposes tariffs on imports into the EU based on their carbon emissions. This disproportionately affects African exporters who may struggle to meet the EU’s stringent environmental standards due to a lack of resources or infrastructure. South Africa, where coal remains a major energy source, is a key example. The CBAM penalises such countries, making it harder for them to access the EU market, thus stifling their economic potential. Instead of providing support to help African countries transition to cleaner energy, the EU’s policies risk reinforcing unequal trade dynamics, where African nations and other developing countries face barriers to developing their own green economies.
The Critical Minerals Act further highlights this issue. Its goal is to help the EU secure a stable supply of essential minerals like cobalt, which are crucial for clean energy technologies like electric vehicles and renewable energy storage. However, this act prioritizes securing raw materials from African countries and does little to foster value addition or industrial development within these nations.
Countries like the Democratic Republic of Congo (DRC) are relegated to the initial stages of mineral production – mining and exporting raw materials – while higher-value processes like refining and manufacturing occur elsewhere, primarily in Europe. This setup mirrors colonial economic structures, where raw materials are extracted from Africa and the economic benefits are reaped in Europe, reinforcing dependency and preventing African nations from moving up the value chain.
This regulatory framework locks African countries into a cycle where they supply essential resources for Europe’s green transition but are denied the opportunity to build local industries around those same resources. The result is a modern form of “green neo-colonialism,” where Africa’s role in the global green economy is reduced to resource extraction, benefiting wealthier nations while limiting Africa’s own development prospects.
The US takes advantage of its market power
The US leverages its significant market power to gain strategic advantages in the global race for critical minerals, particularly through laws like the Inflation Reduction Act. This legislation not only incentivizes domestic production of critical minerals but also encourages ‘re-shoring’ and ‘friend-shoring’ supply chains, which involve bringing manufacturing and supply chains closer to home or to allied nations. This strategy is designed to reduce dependency on geopolitical rivals like China, which currently dominates the global critical minerals market.
However, this approach can also be seen as a form of ‘green neo-colonialism’ because it reinforces global power imbalances. By securing its access to critical minerals through corridors like the Lobito Corridor in Angola – an essential route for transporting minerals from the Democratic Republic of Congo (DRC) to the Atlantic Ocean – the US bypasses traditional trade routes now dominated by China. In doing so, the US is not only ensuring a stable supply of these essential resources for its own green transition but is also sidelining African nations from the more lucrative parts of the value chain, such as refining and manufacturing, which could drive local industrialisation and economic growth.
The US is taking advantage of its market position in a way that mirrors traditional colonial patterns, where resource-rich regions are exploited for the benefit of more powerful nations, without equitable participation or shared benefits.
China leading them all
The EU and US policies are broadly viewed as responses to China’s leadership in the renewable energy industries. By 2030, China’s renewable energy is expected to equal the capacity of the US, EU and India combined. China currently performs more than two-thirds of global critical mineral processing and has become the global leader in green technology.
A strong reason for China’s success in renewable energy is its effective long-standing relationship with African countries like Guinea and DRC where they have secured long term critical mineral supplies for minerals such as Bauxite and cobalt which are predominantly in those nations. In exchange, China has invested heavily in Africa’s infrastructure development with near term plans to support Africa’s mineral value addition and industrialisation plans.
Africa could leverage its relationship with China to benefit more from it, but even so, the Africa-China relationship has been one of the most advantageous for most African nations since 2000.
African energy
Africa holds immense energy generation potential. Africa could generate, from existing technologies, 1,000 times its expected demand by 2040 which would radically change global energy flows.
However, this potential can only be achieved if the continent is allowed to develop their own local industries. The main challenge is an unwillingness from developed countries to transfer technology and pay their climate debt that can be used to finance Africa’s adaptation goals.
Africa has the capability to supply its own energy needs but that can only occur if its political, financial and social resources are prioritised to develop green industries, moving away from being the global supplier of raw materials and eventually buying back finished products from the global North and China.
There is an African proverb which says that “when elephants fight, it is the grass that suffers.” The EU, USA and China in this global green industrialisation economic war are convinced that there must be winners and losers during this fundamental economic shift towards renewable energies. They are determined to be the winners and don’t care who loses, as long as it is not them. In this duel, it seems as if Africa is once again the grass that is suffering.
However, if it learns from its previous strategic mistakes, Africa can enter this battle not as another elephant fighting but as a climate steward using its resources as negotiating tools to remind the world that no one global power owns or controls the sun, wind and earth. The climate crisis has shown us that more needs to be done in harmony to effectively and quickly mitigate the crises at hand.
