Africa is seeing increased Chinese mining activity on the continent as rising geopolitical tension is driving the diversification of China’s commodity investment and trade flow from developed markets to emerging markets, including Africa.
This saw even further increased investment from the Asian country in 2021, as China’s total outbound foreign direct investment (FDI) increased to US$145.2 billion, representing 9.2% year-on-year growth.
Of the investment in Africa, at least a quarter of China’s FDI into Africa is directed towards the mining and metals sector with an increasing investment appetite focused on specific commodities in different jurisdictions.
This includes significant demand by Chinese companies for copper and cobalt exports out of the Zambia and the DRC. The total Chinese acquisition of lithium from Zimbabwe, DRC and Mali has now risen to U$1bn since 2021, and gold from South Africa and Ghana focused on the medium-sized targets shows encouraging upsize potentials.
In Namibia, Chinese investors operate the only two large uranium mines in the country to secure raw feeds for Chinese nuclear energy initiatives, and there is also significant investor and operator appetite for chrome assets in South Africa and Zimbabwe, as well as manganese assets in Ghana.
Mines are expected to continue adding future-ready energy transition minerals to their portfolios. The rise of electric vehicles, driven by consumer preferences for more environmentally friendly products, is boosting demand for minerals used in batteries and electric motors, such as lithium, nickel, copper, cobalt, manganese and vanadium.
PGMs and rare earth minerals are also expected to benefit, with the growing hydrogen economy providing an additional boost. The platinum industry, which is already involved in producing commodities important to the energy transition, is diversifying its portfolio to include battery minerals.
Other African countries look set to benefit from this global drive. The Democratic Republic of Congo (DRC) is a dominant world supplier of cobalt, while Zambia and the DRC are the dominant world suppliers of copper (with notable recent investments in the DRC). There is also growing interest in lithium resources in Zimbabwe, as well as graphite investments in Tanzania and Mozambique – HARARE