Can Africa win the mineral race between China and the West? Russell

Two rail projects worth billions of dollars are underway in Africa. One project was aimed westward, and the other eastward. The one backed by Western nations, the other by China. Both aim to ship huge quantities of vital minerals. Welcome to the new race for Africa.

It is estimated that the Lobito rail line will cost $6 billion when it's completed in 2030. The track will cover 1,050 km (1,700 miles) of track, mainly carrying copper and cobalt, from the Democratic Republic of the Congo and Zambia to the Angolan Port of?Lobito.

The United States and Europe are providing the majority of funding to upgrade existing rail lines and to build new ones to increase the capacity to 4.6 millions metric tons annually.

TAZARA, the 1,860 km line, links the same mineral rich parts of Zambia and DRC with a port in the Indian Ocean that offers faster sailing times to China or other Asian markets.

It is similar to the Lobito Project in that it involves the rehabilitation of a colonial era railway. The Chinese are planning to spend $1.4 billion on upgrading its annual capacity from 2.4 million tons to 2.5 million tons.

These two projects represent the efforts of the world's major powers to control and source the minerals required to power industrial economies, and to drive the energy transition.

They also reveal the different ways in which Western countries and China try to achieve their goals of securing supply.

African countries are stuck in the middle, blessed with their natural resources but cursed with a lack coordinated policies to prevent them from being exploited. They are also hampered by poor governance, and inability to provide consistent and reliable investment schemes.

The African countries today have a much greater choice than they did during the colonial conquest two centuries ago.

If they choose the right partner, they can benefit from more investment, new jobs, and increased revenue through taxes and royalties.

Western countries prefer private operators and public funding to build mines and infrastructure.

U.S. WOOS

The United States changed its approach at the Mining Indaba Conference in Cape Town this week. They have eschewed the bombastic, combative language of President Donald Trump to promote trade and investment.

The U.S. government was out in full force to tout their investment capital and willingness to re-risk mine projects by guaranteeing prices and offtake.

There is a possibility that the United States will go down this road, and if African countries are willing to look past Trump's insults and the gutting of U.S. Aid, new mines and infrastructure could be built. The U.S. plan to build a "vault" containing critical minerals requires African resources. A meeting last week of over 50 countries shows that the Trump administration is serious about building metals and securing supply.

Will efforts made by the United States and, to a lesser extent, the European Union be sufficient to dissuade African states from Chinese investments, which have tended to be all-encompassing, as Chinese companies tend to explore, build and operate minerals.

A?example? is the massive Simandou?mine of iron ore in Guinea. It's currently ramping up its 120 million ton capacity per year.

The project languished for years as Western companies struggled with a viable plan to make it successful.

The project was brought to life by Chinese investment and technical expertise, even though Rio Tinto is a minor partner. As a result, the ore produced in Simandou will be shipped almost exclusively to China.

China has also been active in Africa for many decades, giving them a significant first-mover advantage.

The question is, has China's investment to extract minerals from Africa been mutually beneficial or has it been biased towards Beijing?

Follow-up question: Will Western countries, their mining and trading companies offer anything better?

It is almost certain that more investment will be made to exploit Africa's mineral resources, which in turn will increase competition and reduce risk.

Is the prize big enough for everyone to win? It will require considerable effort and collaboration, and Africa's track record is not good.

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These are the views of the columnist, who is also an author. (Editing by Stephen Coates).

(source: Reuters)