African Rail Projects Become Battleground For US-China Competition In Strategic Mineral Supply Chains
(Benzinga, Detroit, 12 February 2024) A U.S. delegation to a major mining conference in South Africa last week included officials from the Treasury and State departments and the chair of EXIM. Mining and building infrastructure on the continent hasn't traditionally been a U.S. government priority but that is changing now that decarbonization of the economy has taken a front seat and Washington has grown worried about China's dominance of supply chains for strategic materials, including cobalt and copper, used in electric vehicles and renewable energy systems powered by wind turbines and solar panels. The Democratic Republic of Congo (DRC) and Zambia hold more than a 10th of the known copper deposits in the earth's crust. The DRC produces around 70% of the world's cobalt, which is generally a byproduct of copper mining. Most of that cobalt is exported to China, which is by far the world's biggest importer of copper ores and concentrates. So it's no surprise that China has been investing heavily in the African mining and transportation sector. Chinese entities own all or part of most of the producing mines in the DRC. China provided interest-free financing for a railway built in the 1970s linking Zambia's Copperbelt to a port in Tanzania on Africa's east coast. China this week announced a plan to revitalize that railway, providing direct competition to a U.S.-backed rail corridor from the mineral-rich area to Angola on the Atlantic side of the continent. The United States is ramping up its efforts to secure critical metals and in May said it was performing due diligence for a potential financing package to fund and upgrade a rail line from the DRC border to the Lobito Port in Angola on Africa's west coast, expected to greatly reduce the time and cost of trucking copper and cobalt to ports. Canadian company Ivanhoe Mines Ltd is the first mining customer for this Lobito corridor, having this week signed an agreement for the right to transport 120,000-240,000 metric tons a year along the line for five years starting in 2025