JOHANNESBURG—In 2016, several U.S. companies made what technology experts agree was one of the most serious strategic errors ever made by the United States in Africa.
Concerned about ongoing conflict and human rights abuses, and a failure to maintain their cobalt mines in the Democratic Republic of Congo (DRC), the companies sold them to China.
The ball began rolling when U.S. firm Freeport-McMoRan accepted $2.65 billion from China Molybdenum for a controlling stake in Tenke Fungurume, a massive copper-and-cobalt mine near Kolwezi, southern DRC.
In 2019, China Molybdenum bought another stake, for $1.14 billion.
“This gave the United States’ biggest enemy on the global front almost total control of one of the world’s most important strategic minerals,” Arthur Goldstuck, head of the World Wide Worx technology research organization in Johannesburg, said.
The leading use of cobalt is in rechargeable battery electrodes, and the metal is indispensable to the manufacture of electric vehicle batteries, the products set to power road travel in the future.
Cobalt has become essential to the manufacture of computers and cellphones.
It’s also used in “superalloys” and “high-speed steels”—the metals often used in vehicle parts, modern-day weapons systems, and gas turbine engines—and in catalysts for the petroleum and chemical industries, according to the USGS.
“One can certainly understand American concerns about all the violence in the DRC, and human rights violations within the local mining sector, especially because many cobalt miners are children,” Mr. Goldstuck told The Epoch Times.
“But how the United States surrendered a measure of control over cobalt, and the lack of foresight involved in allowing this loss, and putting cobalt almost entirely in the hands of Beijing, is difficult to fathom.”
Part of Mr. Gulley’s abstract reads: “From 2000 through 2020, demand for cobalt to manufacture batteries grew 26-fold. Eighty-two percent of this growth occurred in China, and China’s cobalt refinery production increased 78-fold.
“Diminished industrial cobalt mine production in the early-to-mid-2000s led many Chinese companies to purchase ores from artisanal cobalt miners in the Democratic Republic of Congo (DRC), many of whom have been found to be children.”
During a recent Atlantic Council webinar, Shirley Hargis, a nonresident fellow at the Council’s Digital Forensic Research Lab, said the failure by the United States to hold onto its stake in the cobalt sector caused it to lose “decades of financial and diplomatic investments in the DRC.”
“Demand for metals and minerals like cobalt is shooting through the roof, and obviously China and Russia are smiling. They have unfettered access to minerals and cheap labor,” Ms. Hargis said.
“They hold political leverage over many African governments. There are huge governance problems in Africa. They use all of this to their benefit.”
Moscow has employed thousands of Wagner Group mercenaries across the continent to guard mineral resources, including illegal mining operations.
The DRC case highlighted “decades of U.S. neglect of just how important Africa and its minerals and materials will be” in the future, Toby Shapshak, another South African technology expert, said.
“The Biden administration has realized what a massive strategic mistake this was, and is trying to rectify things and making strong overtures to Africa. But it may be too late because much of Africa already seems dedicated to Beijing and Moscow,” he said. “The United States is playing a desperate game of catch-up.”
Speaking during the webinar, Nii Simmonds, a senior fellow at the GeoTech Center in Washington, said:
“The next industrial revolution will be based on critical and rare-earth minerals.
“Many of these minerals, like coltan, are strategic materials, because most modern technologies are defense-related.
“Current technologies such as satellites, semiconductors, fiber optics, CAT scan equipment, electric vehicle batteries, and smartphones wouldn’t exist without these minerals.
“And these technologies wouldn’t exist in the numbers they do today without countries such as the DRC, South Africa, Zimbabwe, Ghana, Nigeria and Namibia.”
The center uses experts to examine the broader societal, economic, and geopolitical implications of new and emerging technologies. It works to leverage technology to solve global challenges and develop good tech policy, partnerships, and programs.
“The African continent is already essential for critical and rare-earth minerals for the industrial, consumer, and defense sectors,” Mr. Simmonds, who’s also an expert in emerging and frontier markets, told The Epoch Times.
“The United States must act now to form collaborative partnerships with African countries, to ensure it has sufficient access to these minerals and the technologies they allow.”
Semiconductors and flash memory products have become “essential to modern civil and defense technology,” powering “everything from smartphones to self-driving cars, and their importance is growing daily,” said Ms. Hargis, an expert in national security who has spent more than a decade studying the domestic politics and foreign affairs of China and Taiwan.
“The fighter jet actually needs an enormous quantity of strategic materials. Once quantum computing comes online, it will also require substantial amounts of gold and other critical minerals,” Ms. Hargis said.
Semiconductors and quantum computers can only be produced with critical and rare-earth minerals, found in large quantities in Africa, Mr. Shapshak said.
“We’re talking here about minerals such as cerium, scandium, and lanthanum. No one’s heard of them, but they’ve become essential in the modern world. They’re all used in computers, smart TVs, high-grade weapons of war, electric vehicles, clean energy systems, communications systems—you name it,” he said.
“Take these minerals away, and you collapse most consumer electronics supply chains.”
China and to a lesser extent Russia currently have a “near-monopoly of control” over these critical materials, however, Mr. Shapshak said.
“China has 90 percent of the global market for critical minerals, a lot of which it imports from Africa. America had its eye off Africa for so long, and this allowed other actors to access the continent’s precious metals, rare earth minerals, and a long list of other critical resources,” he said.
“China, and to a lesser degree Russia, take these raw minerals from Africa and they process them, meaning the world has to access them via China and Russia in many cases.”
This monopoly has created “significant risks that could disrupt the global semiconductor and electric vehicle supply chains if not addressed now,” Mr. Simmonds warned.
China’s Belt and Road Initiative, by means of which it provides loans to Africa for big infrastructure projects, means that it already has a strong presence on the continent.
Recent research by the Center for Strategic and International Studies in Washington focused on prospects for the United States to engage more in Africa in minerals sectors.
“The continent holds about 85 percent of the world’s manganese, 80 percent of the world’s platinum and chromium, 47 percent of cobalt, 21 percent of graphite, and 6 percent of copper.”
In order to secure vital resources for Western supply chains and national security efforts, the United States should “incentivize and strengthen collaborative private-sector partnerships with African countries that share democratic and rule-of-law values,” Ms. Hargis said.
However, should the United States insist on doing business only with African countries that share these values, “it’ll be shutting an awful lot of doors,” Sizwe Mpofu-Walsh, a lecturer in international relations at Johannesburg’s Wits University, said.
“The DRC, for example, is certainly not the Democratic Republic of Congo. Zimbabwe, a country rich in many of the minerals the world needs, is under U.S. sanctions because the [President Emmerson] Mnangagwa regime is guilty of so much corruption and human rights abuses.
“The list of African countries that are mineral-rich and share the American version of democracy and rule-of-law is a short one.”
Nevertheless, Mr. Mpofu-Walsh said, the United States is making progress in securing access to African reserves of rare earth minerals.
“These will support U.S.-controlled manufacture of semiconductors and consumer electronics,” he told The Epoch Times.
“Western governments and private-sector players in the West have realized they must cooperate to identify diverse sources for their supply chains so they minimize dependency on single countries.”
Instead of exporting critical materials to China, Mr. Simmonds said, African countries can use these laws to support the development of their own legislation, framework, and supplier ecosystem networks required to process their own minerals and metals.
However, more robust and urgent action is needed to counter China’s dominance of Africa’s critical minerals, Ms. Hargis said.
She urged the U.S. government to “incentivize their multinationals” to use a strategy in Africa similar to the “ASEAN Model” of the 1970s and 1980s.
At that time, the development and production of consumer electronics in countries that comprised the Association of Southeast Asian Nations (ASEAN) was supported by multinationals (including Philips, JVC, Sony, Texas Instruments, Hewlett Packard, and Sharp) from Japan, the United States, and European nations.
They helped the ASEAN bloc to establish manufacturing hubs and research-and-development (R&D) centers.
Because of the rising cost of labor in the United States, U.S. semiconductor firms such as Texas Instruments and Hewlett Packard relocated some of their operations to Southeast Asia, notably to Singapore, in the late 1960s and early 1970s.
At this point in time, however, it isn’t feasible to attempt to implement the ASEAN Model in Africa, Tawanda Makondo, a business analyst at South Africa’s Center for Risk Analysis, said.
He told The Epoch Times: “In the late 1960s and throughout the 1970s, Southeast Asia attracted large amounts of foreign direct investment because its governments dedicated themselves to economic development by means of proactive economic policies, policies that were business-friendly. In Africa, we largely have socialist policies that are labor-friendly.
“Also, Southeast Asia had labor that was highly educated, the direct opposite of what we have in Africa. Another thing counting against Africa is the high cost of doing business here, because, for example, of poor infrastructure and generally poor communication networks.”
However, Ms. Hargis still believes that implementing a system similar to the ASEAN Model is possible in Africa.
“Western policymakers should support their multinationals to promote growth in Africa by focusing on manufacturing, chip design, quality control, and R&D,” she said.
“They can create incentives for U.S. and other Western companies to extend semiconductor, flash memory, or electric vehicle supply chains to African countries.”
Progress has already been made on this front, she said, noting that Google has an R&D lab in Ghana; Microsoft has two, in Kenya and Nigeria; and IBM has two, in Kenya and South Africa.
Mr. Simmonds pointed out that China doesn’t encourage its multinationals to invest where value-addition is possible or to open research or manufacturing centers in Africa.
“Beijing’s instead mainly focused on the extraction of minerals,“ he said. ”Western countries can gain the upper hand against competition from China by capitalizing on these shortcomings in Chinese investment and offering a more attractive partnership model.”
Western companies could also capitalize on growing “resentment” in Africa of the debt burden of China’s loans, Mr. Makondo said.
Top-level U.S. officials have been saying for the past few years that the United States wants to end its dependence on minerals, solar panels, and other modern goods that are currently processed and produced in China.
However, Mr. Makondo said, the United States isn’t moving fast enough.
“The U.S. government and private sector must act with speed to prevent a situation in the future where Beijing cuts it off from key supplies. It must work faster to begin to source rare earth minerals and metals directly from African countries,” he said.
“If it doesn’t quickly improve economic cooperation with African countries, it’ll be too late.”
