Europe Turns to Africa For Critical Raw Materials

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Union (EU) has announced a series of major investments worth billions of euros in a number of African nations in an effort to secure supply of critical and strategic raw materials.

It has signed memoranda of understanding (MOU) with the Democratic Republic of the Congo (DRC) and Zambia to develop critical raw materials value chains and boost transport connectivity. Along with the U.S., the Republic of Angola and the African Development Bank, it has also signed an agreement to develop the so-called "Lobito Corridor." This transport corridor will connect the southern part of the DRC and the northwestern part of the Republic of Zambia to regional and global trade markets via the Port of Lobito on Angola's Atlantic coast. The investment will extend the railway tracks 420 kilometers (km) across Angola, DRC and Zambia. The EU investment strategy is seen as a response to massive Chinese investment in Africa's mining sector.

Forming part of the EU's 317 billion-euro (US$336 billion) Global Gateway investment, the agreements will establish close cooperation in five areas:

• Integration of sustainable raw materials value chains;
• Mobilization of funding for development of infrastructure;
• Cooperation to achieve sustainable and responsible production;
• Cooperation on research and innovation;
• Capacity building to enforce relevant rules.

Europe is heavily reliant on third countries--especially China--with more than 90% of its supply of certain minerals coming from a single third country. For instance, 97% of the EU's magnesium supply is sourced from China, 100% of the rare earths used for permanent magnets globally are refined in China, and South Africa provides 71% of the EU's needs for platinum group metals. Earlier this year, Industrial Info reported on the EU's introduction of its Critical Minerals Act to urgently expand its base of suppliers. For additional information, see April 4, 2023, article - Europe Outlines Critical Minerals Act. Congo is ranked as the world's largest cobalt producer and one of the largest producers of copper. Zambia is also a major copper producer and has deposits of critical minerals such as cobalt, manganese, and nickel. The European Commission has already established six strategic partnerships on raw materials with Canada (June 2021), Ukraine (July 2021), Kazakhstan and Namibia (November 2022), Argentina (June 2023) and Chile (July 2023).

"Global Gateway provides the frame for ambitious and strategic partnerships driving structural transformation," said Ursula von der Leyen, President of the European Commission. "The new partnerships with the Democratic Republic of the Congo and Zambia will support the development of sustainable and resilient value chains of critical raw materials, while creating quality local jobs. The Lobito transport corridor will also be a game changer to boost regional and global trade."

Industrial Info is tracking more than 90 projects in DRC worth more than US$15 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

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