China’s increasing mining acquisitions in Africa and the Middle East have raised concerns among investors, policymakers, and environmental groups. The country aims to secure control over critical minerals like cobalt, lithium, and rare earth elements, which are essential for the green revolution.
China has doubled down on securing raw material supply chains through aggressive mergers and acquisitions (M&A) since 2023. Its investments in Africa alone total $8-10 billion annually, dwarfing Western rivals. The country’s strategy is to control the “upstream” mining sector to dictate the “downstream” manufacturing sector.
Key projects include China Molybdenum’s stake in the DRC’s Tenke Fungurume Mine, which secures 20% of global cobalt production, and Gangfeng Lithium’s $137 million investment in Mali’s Goulamina Project. The Middle East is also a strategic focus area for China, with infrastructure projects hinting at broader ambitions.
The U.S. and G7 are fighting back with the Minerals Security Partnership (MSP), aiming to diversify supply chains. However, China’s Belt and Road funding dwarfs Western efforts, making Africa a battleground for resource control.
Investors should focus on firms with Chinese-backed projects in Africa, balancing growth and risk. Gangfeng Lithium, China Molybdenum, and Zhejiang Huayou Cobalt are among the top picks. However, success hinges on navigating ESG risks and geopolitical turbulence.
The stakes are too high to ignore, and the rewards are too vast to miss. Allocating 5-10% of portfolios to miners with African/Middle Eastern projects, paired with hedging against commodity cycles, is a recommended strategy.
Source: https://www.ainvest.com/news/china-global-mineral-grab-geopolitical-gold-rush-critical-resources-2507