The Great Mineral Heist: How the US Overtakes China in Africa

In a shocking turn of events, the US has quietly overtaken China as the biggest foreign direct investor in Africa, with a focus on critical minerals and metals.

TL;DR
• The US has overtaken China as the biggest foreign direct investor in Africa.
• The focus is on critical minerals and metals, with the US seeking to increase its access to these resources.
• African nations must be careful to secure good deals with the US and consider alternative frameworks for investment.

Summary
The US has overtaken China as Africa's biggest foreign investor, with $7.8bn invested across Africa in 2023, compared to China's $4bn. This shift is driven by the US's desire to secure critical minerals and metals, such as lithium, rare earths, cobalt, and tungsten, which are essential for personal tech, electric vehicles, AI data centers, and weapon systems. The US International Development Finance Corporation (DFC) is leading this investment, with a mission to counter China's presence in strategic regions.

Key takeaways from this development include:
• The US is seeking to secure critical minerals and metals from Africa to reduce its dependence on China.
• The DFC is playing a crucial role in driving US investment in Africa, with a focus on responsible and sustainable mining practices.
• African countries must be assertive in negotiating with US entities to ensure that their national interests are protected.

The investment is expected to have a positive impact on African firms and countries, such as Rwanda's Trinity Metals, which secured a $3.9m grant from the DFC to develop its mines. However, some experts argue that the US has missed an opportunity to benefit from African disaffection with Chinese projects due to Trump's trade tariffs on African nations. As the competition between the US and China in Africa intensifies, other countries like Brazil, India, and Japan are also showing increased interest in the continent.

African nations are advised to be cautious in securing good deals with the US and to consider alternative frameworks, such as production sharing agreements and joint venture models, to create more value from their mineral resources. Additionally, there is a growing need for more processing of minerals and metals to be done in Africa, rather than simply exporting the ores overseas.

As the US and China engage in a high-stakes game of mineral diplomacy, African nations must navigate this complex landscape to secure their interests and benefit from the opportunities that arise.