North Africa and the race for “new oil”
As technology becomes ever more central to our lives and economies, demand for rare earth elements and other critical mineral resources—key raw materials that underpin the global transition to the low-carbon economies of the future—has grown exponentially. These critical minerals are the lifeblood of technologies ranging from semiconductors, flash memory and optical fibers to electric vehicle batteries and smartphones. As a result, the competition for these assets is reshaping the geopolitical and geoeconomic landscape, far offsetting the conventional hegemony of oil and shaping the contours of the next global resource race.
To meet the goals set out in the Paris Agreement, it is believed that 80 percent of proven fossil fuel reserves will need to remain in the ground. However, as we transition from these traditional energy sources to more sustainable alternatives such as solar, wind and geothermal energy, demand for certain minerals and metals is increasing, which will likely turn Africa into a battleground for competing hegemonies that they seek to monopolize the life force of future economies. By 2050, we could need nearly 3 billion tons of metals like lithium, cobalt, and vanadium, which are useful for energy storage. Minerals such as manganese and graphite, which are essential for these new technologies, are found in abundance on the African continent, in addition to copper and other materials such as indium, selenium and neodymium used in the manufacture of wind turbines and solar panels.
For optimists, such conditions could set Africa up for success as the world accelerates the move towards environmentally friendly energy solutions. It won’t be a new phenomenon either, as the continent’s vast deposits of gold, silver and other metals remain a source of raw materials that fuel current manufacturing processes around the world. The mining and export of these materials continues to play an important role in Africa’s economic life, driving exports, earning revenue and contributing heavily to gross domestic product. To date, fossils and fossil fuels have accounted for over a third of all exports for most African countries. In addition, 42 of the 54 African countries are heavily dependent on these resources, with minerals providing a significant amount of revenue, foreign currency and jobs.
However, despite possessing such abundant natural wealth, Africa remains at a disadvantage on a global scale and struggles to fully utilize its resources. This is mainly because, while its abundance is amazing, Africa still lacks the capacity and technology to develop these raw materials into more valuable end products. This has limited the continent’s opportunities to grow economically and carve out a more meaningful place for itself in global supply chains. However, the global thirst for climate-friendly technologies and the will to transition from energy sources that contribute to climate change present a golden opportunity.
The continent could tap into its near-limitless potential and become a hub for manufacturing everything from solar panels to batteries for electric vehicles. The development of these clean energy industries holds a promise of industrial and employment expansion, which will then ensure unprecedented levels of socio-economic development and prosperity. Countries that are well endowed with these vital minerals could attract significant investment not only in the extraction of these resources, but also in advanced sectors based on them. Africa’s natural wealth therefore offers an opportunity to play a leading role in driving investment and spearheading domestic and regional industrial development and growth. To take full advantage of this opportunity, African countries need to strengthen their productive capacity, increase production and encourage exports by strengthening domestic and cross-border partnerships and supply chain linkages.
Major global and regional powers are strengthening their footprints in Africa, staking claims in strategic areas.
Hafed Al-Ghwell
Simply put, the African continent is increasingly indispensable, and supply chain risks arising from the monopolization of these resources by a few countries such as China and Russia pose a significant threat of disruption to global semiconductor and electric vehicle markets. China currently holds the lion’s share of the global market for critical minerals – mining 60 percent and processing around 80 percent of them – in addition to investing billions in Africa to fuel its ambitious Digital China strategy. Beijing’s practices occasionally raise concerns about capitalizing on growing demand, political leverage, governance challenges and exploitation of cheap labor. Russia is not far behind, its traces are evident in the deployment of thousands of Wagner Group mercenaries to guard the mineral resources.
Even the USA, mostly a distant “partner” of the continent, cannot escape the wave of interest and attention in Africa, since its countries have the minerals that will feed the modern world. Recognizing Africa, specifically North Africa, as a critical strategic partner can help Western economies reduce their dependencies on a single nation or region. The Maghreb countries are well positioned to serve as a gateway to Africa, even though they lack vast reserves of these critical minerals. They already act as critical gateways, both for the inflow and outflow of people and resources. In the future, their position will be critical in facilitating investment, talent development, technological advancement and enabling the all-important trade markets for Africa’s vast, untapped mineral wealth.
To unlock the potential of these resources, the US and Western countries should incentivize and strengthen collaborative private sector partnerships with African nations that share democratic and rule of law values. For example, Africa’s landmark African Continental Free Trade Area can be leveraged to support semiconductor, flash memory and consumer electronics supply chains.
The far-reaching efforts of Western multinationals in the 1970s and 1980s offer valuable lessons for today’s context. By establishing production hubs and research and development centers in ASEAN countries, they started the development of these economies. Encouraging a similar approach by encouraging multinationals to invest in Africa can have the dual benefit of developing local economies while reducing dependence on eastern powers. For example, Google, Microsoft and IBM have already started making inroads by opening R&D labs in various African countries. Inherent in this strategic equation is the clear message that critical minerals have not just evolved as the new oil but also as critical geopolitical pivot points. Traditional oil-based geopolitics is rapidly giving way to geostrategic competition for these precious resources.
Thus, the international spotlight on Africa’s potential is not just a reflection of its soaring promise, but a smoking gun that points to the growing political and economic dynamics shaping the world. Major global and regional powers are strengthening their footprints in Africa, staking claims in strategic areas, increasing their soft power and going all-in to compete for influence and projects. Maghreb countries are not immune to these global dynamics and, in many ways, are in the thick of the action. Seeking to act as a continental gateway, they will constantly be at the center of an escalating global struggle for Africa’s future riches.
Increasingly, foreign powers, from China, Russia and the Gulf states, see Morocco and its sub-Saharan neighbors as a strategic playground between the West and Africa, making these nations increasingly important players in these geopolitical and financial games. Just as Morocco and others struggle to become Africa’s gateway, the wider North African region itself could also become highly contested territory, especially if its countries try to facilitate Africa’s rise to the world stage. Being the conduits for Africa’s potential should be seen not only as an opportunity, but also as a great responsibility.
Africa is no longer on the fringes of the global system, but rather at the center of attention. The old label, “the forgotten continent” no longer applies. Instead, it is sought with such intensity that this renewed attention threatens to overwhelm the continent’s capacity to absorb and use it effectively. This is where the Maghreb’s strategic geographic advantage can be leveraged, leveraging the sub-region as an entry point, intermediate market and channel for investment and technology transfer, opening up unexplored opportunities. Ambitious but strategic planning, investment and cooperation could lead these countries to become the custodians of Africa’s resource map, while serving their important role in clean energy transformations around the world.
• Hafed Al-Ghwell is a senior fellow and executive director of the North Africa Initiative at the Foreign Policy Institute at the Johns Hopkins University School of Advanced International Studies in Washington, DC, and a former adviser to the chancellor of the World Bank Group.
X: @HafedAlGhwell
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