China and the West have taken their competition to secure critical minerals to a new battleground—central and southern Africa, where the race to secure critical routes to move the critical metals to demand markets is in full swing.
The United States, Japan, and China are backing three different railway corridors in Africa, where a large part of the global copper and cobalt supply is mined.
As the U.S. and its allies look to reduce their reliance on China in critical minerals supply, these three railway corridors – all starting in Zambia and planned to end at major ports for exports – have become key to who will be able to influence the direction of said exports. In other words, the race for railway projects now will shape where the copper and cobalt will end up in the future.
At the end of last year, the U.S. announced the commitment of a loan of up to $553 million to upgrade the Lobito Atlantic Railway in Angola.
“The project is expected to expand and protect critical mineral supply chains, increase rail transport capacity, and reduce freight transit times and costs,” the U.S. said as it looks to counter China’s presence in Africa.
China, for its part, will invest, via China Civil Engineering Construction Corporation (CCECC), more than $1.4 billion in Tanzania-Zambia Railway Authority (TAZARA) to revitalize the railway infrastructure and operations.
Japan last month announced it would support the Nacala Corridor, an international corridor in southeastern Africa connecting landlocked Zambia and Malawi to the Indian Ocean via Nacara port in Mozambique.
Japan expects the Nacala project to become a transportation route for mineral resources and other goods and strengthen Japan’s resource supply chains.
“By backing railways and ports, countries are locking in long-term influence over how minerals flow,” Shahrukh Wani, an economist at the International Growth Centre at the London School of Economics, told the South China Morning Post.
Currently, China is winning the global race for critical minerals and rare earths.
China holds a dominant global position in the supply of critical minerals and rare earths, but its grip on the value chain – minerals processing and magnet production – is even tighter.
China is currently unbeatable in scale after building refining capacities over the past three decades. Early in the game, Beijing realized that refined products – not the raw materials – are the key to holding a strategically and economically dominant position in critical minerals and rare earths.
The heavily concentrated supply of critical minerals in a handful of countries and China’s export controls are raising the risk of “painful disruptions” in the market, the International Energy Agency (IEA) warned in its new annual report, Global Critical Minerals Outlook.
Despite major deals and government support in the West for building domestic supply chains, China has raised its market share over the past few years, the IEA’s report found.
In the past five years to 2024, while the rest of the world was looking for ways to bolster domestic supply, growth in refined material production was heavily concentrated among the leading suppliers.
China dominates refining for 19 of the 20 minerals the agency has analyzed, holding an average market share of around 70%.
“Three-quarters of these minerals have shown greater price volatility than oil, and half have been more volatile than natural gas,” the IEA said, noting that major risk areas include high supply chain concentration, price volatility, and by-product dependency.
The market is well-supplied with critical minerals, whose prices have dropped off from the highs seen in 2021 and 2022. In this sector, the risk is not supply itself, but its concentration in a few producers, especially China, the IEA noted.
Now the critical minerals race has expanded from mining the raw materials to control over the routes of the materials to markets.
