CHINA Chinese companies hunting for strategic minerals in South America and Africa

Especially lithium, cobalt and nickel, essential in the production of batteries for electric vehicles. New supply markets are needed in the face of restrictions imposed by the United States and its allies. Investments hampered by political instability in South American and African countries. Pope Francis’ warning against the exploitation of Africa resounds.

Beijing () – Chinese companies are hunting for strategic minerals to support the national boom in the production of electric and hybrid vehicles. The batteries that power these cars use metals such as lithium, cobalt and nickel, which are found in large quantities in South America and Africa.

China depends on imports of precious minerals: the Beijing authorities acknowledge that their acquisition is a matter of national security. The growing geopolitical tensions with the United States force the Asian giant to look for new markets. Lately, Washington and its allies have adopted policies limiting foreign purchases of its mining assets: a move actually aimed at Chinese competitors.

Above all, it is Canada’s restrictions on Chinese companies that have hurt Beijing’s interests. As he points out CaixinOf the 2,400 mining companies operating in the world, 1,400 are under Canadian control.

China is very interested in South America because Argentina, Bolivia and Chile host 53% of the world’s lithium reserves (some 98 million tons). South American countries are open to Chinese investment in the sector because they hope to obtain capital and technology to develop their industries. However, political instability, structured unions, low labor productivity and strict environmental policies make it difficult to invest in the region.

For its part, Africa is home to two thirds of the world’s cobalt, 10% of the copper, and lithium reserves are being explored. The Chinese have been investing there for years, but their interest in mainland mines has increased a lot since the second half of 2021. The dynamics that make Chinese capital attractive to Africans are similar to those in South America, as are the problems, especially as regards the precarious political balance in the States concerned and widespread corruption.

The exploitation of local populations in the extractive industry does not seem to be a problem for Chinese companies (as it is for multinationals from other countries). He still echoes Pope Francis’ admonition on the issue during his recent trip to the Democratic Republic of Congo, in which he reminded world powers that Africa is not a mine to be exploited or a land to be plundered.

70% of the world’s cobalt is extracted from the Democratic Republic of the Congo: 80% of the production ends up in China. Of the country’s 19 industries, 15 are wholly or partly owned by Chinese companies.