As the demand for electric vehicles continues to soar, China has turned its attention to Africa in search of the lithium needed for the production of EV batteries. However, as China’s presence in African mines grows, is it possible for the continent to fully seize this momentous opportunity?
While this influx of Chinese investment could bring much-needed capital and jobs to African nations, it also raises concerns about the continent’s ability to control its own mineral resources. However, some African countries are taking steps to protect their resources, with Zimbabwe passing the Base Mineral Export Control Act in December to ban the export of raw lithium (though Chinese firms already invested in mines or processing plants in the country are exempt from this ban).
Companies like Zhejiang Huayou Cobalt, Sinomine Resource Group, and Chengxin Lithium Group have already invested $678 million into lithium projects in Zimbabwe, and have acquired controlling shareholdings in Zimbabwean lithium mines over the past few months. China’s reach extends beyond Zimbabwe too, with Chinese companies gaining control of a sizeable share of the Democratic Republic of Congo’s mining sector, including key cobalt and lithium resources.
Just as investing in Africa’s lithium sector is beneficial to China, African countries stand to benefit from Chinese investment through job creation, taxes, the transfer of technology, and significant funding, which all help to develop Africa’s mining industry. However, there are several potential disadvantages of China monopolising African resources, some of which include:
Exploitation of resources
There is a risk that China’s dominance in African resource markets could lead to exploitation of these resources, without consideration for the environmental and social impacts on the local population.
Unequal trade relationships
China’s large-scale investments in Africa have raised concerns about unequal trade relationships, where African countries may be left with little bargaining power and be at the mercy of Chinese economic policies and practices.
Limited access for other countries
China’s dominance in African resources could also limit access to these resources for other countries, potentially leading to geopolitical tensions and economic imbalances.
Impact on local industries
China’s large-scale investment in African industries could also impact local industries and businesses, as they may not be able to compete with the low-cost products and services offered by Chinese firms.
As the EV market continues to grow, it’s essential for African nations to ensure they are maximising the opportunities presented by their mineral resources while also protecting their interests. By working to build their own mining and processing capabilities, partnering with responsible companies, and investing in education and research, Zimbabwe can take an active role in shaping the global supply chains for these critical resources.
Mining Review Africa