While the U.S., India, and countries in the Persian Gulf are all moving quickly to establish new critical mineral supply chains, the European Union is struggling to follow suit, particularly in Africa. The EU currently lacks a cohesive policy framework that would bolster mining companies, support partner countries, and encourage the development of a mineral processing sector that can lessen Europe’s current dependence on China.
To do this, the EU should follow China’s model in Africa, where it paired extraction with the development of vital infrastructure, according to a new commentary from the European Centre for Development Policy Management (ECDPM).
The authors, Poorva Karkare and Karim Karaki, join Eric & Géraud from Brussels to explain why the EU should strive for strategic complementarity rather competition with China in Africa.
Show Notes:
- ECDPM: The EU’s playbook for African minerals amid China’s dominance by Poorva Karkare and Karim Karaki
- AFRICA POLICY RESEARCH INSTITUTE: The tumultuous path toward EU-China-Africa trilateral cooperation on Critical Raw Materials in Africa by C. Géraud Neema
- European Council on Foreign Relations: Material world: How Europe can compete with China in the race for Africa’s critical minerals by Sarah Logan
About Karim Karaki and Poorva Karkare:
Karim Karaki is the head of ECDPM’s economic recovery and transformation team. Prior to joining ECDPM, Karim worked as a senior advisor for PwC Luxembourg’s public sector advisory practice, providing advice to multilateral and EU institutions and specialising in public policy analysis and evaluation, with a focus on EU funding. He also previously worked as a policy analyst for various organisations, including the European Investment Bank. From 2015-2018, Karim also worked as a policy officer for ECDPM. Passionate about social entrepreneurship as a way to foster inclusive and sustainable growth, Karim worked as a volunteer consultant for the social enterprise platform MakeSense, and for the Fondation Bridderlech Deele. Karim holds a master’s degree in business and development studies from the Copenhagen Business School.
Poorva Karkare is a senior policy analyst at ECDPM working on issues of industrialisation and regional integration in Africa with a political economy lens. Increasingly, this also involves understanding the intersections with green and digital transformation. Along with the geopolitics around these megatrends, she also looks at the effect of the EU’s external regime in these domains on the prospects of economic development and structural transformation in Africa. Poorva has a master’s degree in development economics from SOAS. Before joining ECDPM, Poorva worked in Mozambique at the World Bank. She also worked at the Ministry of Economic Planning and Development in eSwatini as an ODI fellow.
Transcript:
ERIC OLANDER: Hello, and welcome to another edition of the China in Africa podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander, and as always, I’m joined by CGSP’s Africa editor, Geraud Neema, joining us from the beautiful island of Mauritius. A very good afternoon to you, Jeroen.
GERAUD NEEMA: Good evening to you, Eric.
ERIC OLANDER: Good evening. And we’re going to be talking today about your favorite topic, which is great power competition and critical minerals, and we’re going to focus a lot on your home country of the Democratic Republic of the Congo.
Just a quick update, everybody, that the price of cobalt, and this is an important topic, and I know a lot of people think to themselves, oh gosh, here they go again talking about critical minerals, but this topic is at the center of everything, as I’m going to lay out for you today. And let’s just quickly talk about cobalt prices. They are up a lot now, in part because the Congolese government has extended a four-month ban on the export of cobalt.
And cobalt is one of these metals that forms the ingredient to make a lot of the EV batteries. It’s also in fighter jets, in a lot of the electronics that we use. It’s used everywhere.
The problem was the price was hovering near 20-year lows for many years, and so the Congolese government decided to follow the move of what OPEC does, and when there is a glut of supply in the market, they try to pull back supply to force the price up. The initial suspension that came into effect back in February was when the price dropped below $10 a pound for the first time in 21 years. Now today, that price is up almost 60%, and the price of cobalt hydroxide, which is the main export from the Congo, has doubled.
The question is, once the ban is lifted, and the Chinese start producing a lot, and exporting a lot, and flooding the market again, will the price stay high? We’re also going to focus on the great power competition related to cobalt and critical minerals and everything that kind of powers this new energy world that we’re in. Indian Prime Minister Narendra Modi, he arrived on Wednesday in Ghana to kick off a five-nation tour that will culminate in Brazil for the BRIC Summit, and critical minerals is going to be high on the agenda, both in his discussions in West Africa and in Brazil.
Let’s take a listen now to how Economic Times Television set up his trip. Cobalt was also on the minds of a lot of people in Washington this week, where the U.S. brokered a settlement between the Democratic Republic of Congo and Rwanda to end fighting that has killed thousands of people and displaced hundreds of thousands of people. The foreign ministers from both countries were in Washington at the White House in the Oval Office with Donald Trump, and as we’ve heard a lot from the Americans, critical minerals was very much top of mind for the president.
SOUNDBITE: So we’re here today to celebrate a glorious triumph, and that’s what it is for the cause of peace. And this is a long time waiting, the signing of a historic peace agreement between the Democratic Republic of the Congo and the Democratic Republic of Rwanda. But we’re going to bring it to an end.
I want to express my gratitude and congratulations to the representatives of the Democrat Republic of the Congo and the Republic of Rwanda, who signed this pivotal agreement a short time ago. They just signed right in front. And let me also thank Secretary of State Marco Rubio, who has worked very hard on this subject, and we’ve worked on it together, for his outstanding leadership as well as senior advisor for African and Africa Affairs, Mossad, Boulos, African Union.
We just spoke about that, and I look forward to having them, representatives here when we do the official meeting, and that’ll be sometime in July.
In addition to this, which will become known as the Washington Accord, with regards to the Great Lakes region.
That’s great. Why not the Trump Accord? If you wish.
And there will be some bilateral agreements. We’re negotiating a minerals deal with the DRC for critical minerals. Many American companies have shown interest in investing in the DRC, and this we’re talking about long-term investments.
Same thing with Rwanda. Many American companies have shown interest, and not only in mining, but also in the midstream and downstream, which will be the processing of minerals. We’re also working and supporting the Lobito Corridor.
ERIC OLANDER: Okay, Geraud, there you have it. But the DRC also came up in an interview that Trump held with Fox News’ Marita Bartiromo, and this is where it comes relevant for us, is because he said that Congolese officials are telling him that they would prefer to work with the Americans and not the Chinese.
SOUNDBITE: I believe that half of the world’s cobalt is in the Congo. Are you going to be able to help develop that? Will the U.S. participate in developing that cobalt?
Yeah, they want me to. They actually want me to. The head, who’s a very respected guy, you know, look, I just stopped a war.
This war was going on for 30 years. Six million people were killed between Congo and Rwanda. And my people came to me, they say, they want you.
They don’t want China.
ERIC OLANDER: They don’t want Russia. Go, Geraud. They want Trump.
They don’t want China. So give me your take on all of that’s been happening this past week.
GERAUD NEEMA: I believe there have been a lot of misrepresentation, a lot of exaggeration about everything that’s happening in this DRC-Rwanda deal. Misrepresentation, forced misrepresentation and exaggeration is like when you talk about historical agreement between DRC and Rwanda. It’s not the first time the two countries are signing a peace agreement, and I can bet it’s not the last time they’re going to sign another one.
So this is the first element. The second element in terms of misrepresentation, also an element of exaggeration in a certain sense, is when it talks about, of course, the soundbite that you mentioned. I’m going to be prudent here because he’s referring what other people, he said that he’s referring of what other people have told him about what the DRC’s leaders are telling about him.
And of course, coming from me, I’m not expecting him to say that the Congolese are telling us that they want Chinese. He’s bound to say that the Congolese are telling us that they don’t want the Chinese. They want us.
That’s expected. That’s why I’ll tell people should be a bit of like prudent and, you know, before taking to face value what he said about that. And in terms of now, when it comes to the economic agreements, the peace agreement has been signed.
The economic agreement needs now to be talked and signed between the three parties, basically the DRC and Rwanda, the DRC and the United States, the United States and Rwanda, and having all of them work together. So we are really way far to get to that final deal to be made yet, even though Trump has said that, you know, we’re going to have a lot of mining this coming out of the DRC. When you ask the DRC officials, they’re not confirming it.
They’re avoiding to kind of confirm that, yes, we’re going to give a lot of mining right to the United States. But at the same time, they really try to maintain the good relationship in a way that they do not, you know, say we’re not going to do that because let’s face, let’s remember it. The United States find itself in this situation because the DRC called on the United States to come and broke peace because we wanted a kind of U.S. economic agreement with us. So Rwanda will not have incentive to kind of attacking the DRC through rebellions and in the eastern part of the DRC. So this is basically what’s happening right now. And I know I didn’t really give much.
I’m really happy to go into the details later on. But this is basically I think why people should be much more careful into giving a lot of values to what has been said so far, because nothing has been really concrete so far.
ERIC OLANDER: Well, one of the key takeaways from this week is that clearly critical minerals is on the mind of India and Prime Minister Narendra Modi. Obviously, it’s on the mind of Donald Trump and the Americans and even the Congolese and Rwandans are thinking a lot about it. But it raises the question of where are the Europeans in all of this?
And for that answer, we have a fascinating new commentary that came out of ECDPM. That’s the European Center for Development Policy Management. The EU’s playbook for African minerals amid China’s dominance.
Obviously, with a title like that, we had to have the two authors on the show to talk to us about it. And Poorva Karkare is the senior policy analyst at ECDPM working on issues of industrialization and regional integration in Africa. And her co-author, Karim Karaki, is the head of ECDPM’s economic recovery and transformation team.
Poorva, Karim, thank you both for taking the time out of your very busy schedules to join us today. We really appreciate it.
POORVA KARKARE: Thank you very much for having me.
KARIM KARAKI: And likewise, thank you for having us.
ERIC OLANDER: Yeah, Karim, we’re going to start with you because I know your time with us is very limited. But when you hear all of this activity going on among the Indians, among the Americans, among others, and you know, how does that kind of play into the urgency of the call to action that you made in this paper about kind of coming up with a playbook for the European Union?
KARIM KARAKI: I mean, taking a step back, so the CRM has been very high on the policy agenda of the EU. And I think the Commission in general has a tendency to go fairly slow on these processes. And I think what, you know, those recent episodes showed us is that if the EU doesn’t come in and try to invest and others will, whether it’s India, whether it’s the US and so on.
So I think that there, there is indeed like a call for being a bit more proactive, I think, on this agenda. But being proactive is one thing. And at the same time, you have to be pragmatic.
And I think that’s a bit the point that we’re raising in this commentary, meaning that the EU in terms of capacities related to CRM is quite limited. It’s not like the European Union has a lot of companies working in mining and being able to size these opportunities. So in addition to that, it’s not only about mining, it’s about processing, and then it’s about the uptake of the processing itself.
So all of these actually make it very difficult and challenging for Europe, because that requires really a value chain type of approach that is well-coordinated, that is part of a broader industrial policy endeavour. And that’s why I think in the commentary we’re referring also to China’s industrial policy and how effective they have been, in fact, in setting up targets and reaching them on some of the key value chains. I think that there, for Europe, it would be more difficult.
And if Europe cannot do it alone, then they should try to do it with others. And so it’s a bit the point of being pragmatic now. So working also with China and with other powers in CRM has become something that is unavoidable.
And I think that at the Commission level, there’s a sense of realisation around this issue. But politically, it remains very sensitive.
ERIC OLANDER: Poorva, Karim says the European Union doesn’t move fast. That’s something that we know. But here we are in 2025.
We knew that critical minerals, we knew that new energy, we knew that green mobility was going to be a thing decades ago. How is it that the European Union and European countries are in the position that they’re in today, so far behind the Chinese and so far behind, even in many respects, even the Americans?
POORVA KARKARE: I think there may be the starting point is, yes, we knew that critical raw materials are going to be important. But I don’t think anyone knew the kind of world we are going to be in as of 2025, which is defined by…
ERIC OLANDER: That’s not true. The Chinese seem to have a good sense of what was going to happen. And that gave them a 15-year head start on all of this.
POORVA KARKARE: Not necessarily geopolitically. The Chinese did do it. They did have a long-term vision that these materials, these minerals are going to be important.
And that’s where definitely the West, I mean, many things have been written about this, but the famous analogy is that they were caught sleeping on the driver’s seat. And so that is definitely true. And that was more because we thought about it in a commercial sense.
We thought about it from the perspective of the private sector, for whom it wasn’t profitable enough to be mining these minerals. That’s why they were sold. These mines were sold on to the Chinese, whereas the Chinese had this longer-term perspective.
But what I’m saying is no one until maybe COVID or maybe a bit perhaps before that, no one thought we would be in this kind of world where you could have a conversation around the weaponization of dependence that countries have on each other. And that is something that really is setting a lot of countries into action as well. It has been more or less established, irrespective of the geopolitics, it does not make sense to depend on one specific country, irrespective of the geopolitics.
We know what happened with COVID. Something like that can happen and it’s just very dangerous. So that is one consideration that the EU has.
Another one is the fact, as Karim was saying, that things also move a bit slowly. So on the regulatory side, the EU has this CRM Act, the Critical Raw Materials Act, where they have set themselves soft targets in terms of mining, recycling and also refining how much of it is going to be done within the EU. To complement that, they also need to work with partner countries.
That is also a given because not all of these minerals will be found in the EU itself. The next question then becomes, well, how do you work with partner countries, especially in Africa? I will stick to Africa because that’s what I know most.
When you know that those partner countries are not interested in getting involved in any of the geopolitical rivalries or tensions. Maybe the EU is not approaching this in the sense as the US is. It’s not about the geopolitical blocks and who’s going to be on whose side.
But there are definitely some tensions with EU-China relations. And externalising these tensions does not necessarily help you get the partners that you want to be working with. So then how does the EU go about doing it?
That was the starting point of our blog basically. And there, what I would say is, we talk about working strategically with the Chinese, but it was also motivated by thinking about pragmatism. Before you can be strategic, you also have to be a bit tactical.
And what Karim was saying, if the EU does not have these capabilities to go and mine themselves, to go and refine themselves, well, they have to find other places where they have some kind of strengths and play to their strengths and make a niche case for themselves as to why the Chinese also would want to work with the Europeans in partner countries, third countries, which is in Africa, or it could also be Latin America.
ERIC OLANDER: Karim, let’s pick it up with you from what Poorva was talking about in terms of the Chinese. You talk about China’s dominance, that’s in the headline of the commentary. And you say, and I’m quoting here, drawing lessons from Beijing’s approach, the EU must refine both the substance and strategic positioning of its CRM offer, particularly in Africa.
Let’s talk about that in terms of what the influence of the Chinese is in terms of Europe’s perspective approach to African countries on critical minerals.
KARIM KARAKI: Yes, I mean, the point that we’re trying to make is, okay, Europe has to come with a clear value proposition on what it is they can bring on the table when it comes to the CRM sector. And I think that reflecting on that, basically, what we’re trying to do is also map some of the, where do they have a competitive advantage. And besides the strategic aspect, there’s an aspect relating more to the tools and the instruments that they have, I mean, and I think that there, what we try to compare, but in a very like a high level perspective is also in terms of the financing that comes with such an investment.
I mean, it’s like the financing is clearly one of the biggest issues, I think, in mining, especially when it comes to the discovery of the mines and assessing their potential and so on. And I think that there is where there is a need for project preparation type of financing that comes before then pre feasibility, then feasibility studies, then you have to have the instruments that can support the private sector directly. So through that equity guarantees and coming not only from development actors, but what we’re saying is that if you are serious in engaging as well better the European private sector, because it’s about geopolitics, it’s about also supporting your own economic interest, then you have to have the right type of factors involved in those deals.
And that includes, for example, export credit agencies. So that’s a bit what we were trying to say is that you need to come with more of an integrity package, a bit like China does when they come with the export credit agency, the development finance institutions, the policy support, but they manage that in one package, right. And I think that’s the thing that where the US has been struggling and where there’s ongoing progress as well, but we’re still far from having a really coordinated approach.
And just the last point I think is where the EU could be also different from the Chinese approach on financing is that by not mixing everything together, we are actually able to also distinguish what is development from what is actually serving the European economic interest. I think when we mix those two together, then the purpose and the sense of meaning of development just loses also some value. I think by keeping instruments separate, but better coordinated, we’re able to provide something that is hopefully of interest as well for partner countries.
POORVA KARKARE: If I can come in on that, I mean, especially on the point of the integrated package and how you can ensure coordination between private sector engagement, where the European private sector is involved and developing the private sector in partner countries. One point is on the integrated package, we also need to think about it from the partner country perspective. So if the Chinese come into my country, I am country X, I don’t have enough state capabilities to coordinate among different things.
And then the Chinese come in and say, we’re going to do a mining project, but here’s a road that we’re going to construct that leads us to the mines. And she has also an electricity or energy generation project, which again connects to the mine. That to me is a very attractive proposition.
Then if I’m working with the EU, where these things are going to be done by different actors. So trying to understand also that coordination side from the partner country perspective, I think would help the EU itself. And to the second point about Karim saying that the instruments need to be somewhat separate, even though they need to coordinate better.
The thinking there also is they need to be coordinated, but in a sense, they are also very intimately interlinked. So let me just give you an example. If the EU now wants to do refining, let’s say what we have argued in the blog, in order to do refining capacities that the EU does not necessarily have, the EU will have to work with the Chinese in African countries.
That’s what we are basically arguing for. But when you’re trying to do that, you’re also looking at private sector development in African countries, right? Because the ones who are going to be working with the Chinese are going to be African partners.
Linking this to the European interest will then mean looking at European operations further downstream. So not at refining, but further downstream. It could be about battery manufacturing or cell manufacturing, where again, the EU will have to work with the Chinese.
So by looking at private sector development in partner countries in Africa, you’re also going to help and engage your own private sector, European private sector. Only thing that we’re adding to this equation is that this will have to be done with the Chinese involved somehow. And that again goes back to my point, you need to be tactical before you can be strategic.
And again, we can draw a leaf from the Chinese playbook and say that, okay, this is only momentary, right? This is only temporary. Over time, we also work towards building those capabilities domestically, whether it’s about African countries building them for refining, or whether it’s EU firms building those capabilities to do cell manufacturing, so that you remove the participation of the Chinese in your operations.
If there is still this geopolitical concern of weaponization. But the assumption that we’ve made in all of this is that working this way creates strategic interdependence, which means that you are so interdependent rather than over dependent on only one actor that they can weaponize it. If you have that interdependence, it becomes that much more difficult for any one actor to wake up tomorrow and try to weaponize it.
Because you see, if you’re talking about refining and then connecting it with battery operations in the EU, where different Chinese players are going to be involved with the Europeans, and also different Chinese players with, let’s say, the Congolese, if you’re taking the example of Congo for refining. And it just becomes very difficult for any one player to say, right, I’m not going to do this. I mean, you could have natural disasters or anything external, but it’s going to be very difficult for any one player to try and just close the tap.
GERAUD NEEMA: And you are making a very good point, because when I was reading your commentary, some few ideas really came into my mind. And I’m going to get to the part of the African private sector. When we look into that space in Africa, most of the stakeholders in Africa in that space are not private sectors, are public companies, especially in the mining sector.
Most of them are public companies. So in your approach, do you see when we know how much the EU doesn’t really like much into cooperating with public companies, especially in the mining sector, where we want to have much more private sector liberalization happening there. But in Africa, you have a sense where there is a demand for much more public sector presence in that space.
How do you see that cooperation happening when you do have the main stakeholders in Africa being public companies?
POORVA KARKARE: I mean, there are examples. So let’s say there’s a general trend where you could say that the EU prefers to work with private companies rather than a strong belief in this state-owned enterprise. It’s also ideological.
But let’s say, even though that there are these exceptions, where in mining, it’s mostly SOEs that are more dominant in African countries, you do have examples of EU working together with SOEs. So Umicore did work with Deka Beans to start producing. So there are examples of this happening.
But again, given the environment you are in, you might see a difference in also the way the EU approaches these things. But it’s going to take time.
KARIM KARAKI: To complete maybe what you’re saying, Poova, I think, you know, from a more financing perspective, whether it’s a SOE or like a private sector actor, at the end of the day, I think one of the reasons why there’s been limited investment is because of the risks that are involved in those transactions. So I think those risks are more systemic. And indeed, the fact that some of the companies are state-owned enterprises could also add additional layers related to credit risk.
But I think essentially, the sectoral risks are also represent a big impediment for investments as such.
GERAUD NEEMA: I’m going to maybe throw you a curveball here, because when you mention risk, it reminds me of a commentary I heard a few weeks back when I was in conference. Someone mentioned the fact that when you talk about risk related to critical minerals and investment in Africa coming from Western countries, European and Americans, we realize that the risk element is quite high when you talk about those minerals. But it’s the same environment when you talk about hydrocarbon, oil and gas operation in Africa.
But somehow, when it comes to oil and gas, we hear less talk about risk because somehow, Europeans, you have total energy in Mozambique in this country where you have a very high instability. But still, they’re able to invest billions of dollars in those kinds of projects. But when it comes to critical minerals, we tend to put the risk higher as if those risks, they’re just new ones where actually we see them being present.
They’ve learned to manage risk when it comes to oil and gas. Why do you think that difference is taking place when it comes to critical minerals coming from Western countries?
POORVA KARKARE: If I can come in on that, I mean, my first observation would be, if you’re talking about hydrocarbons, you’re talking about some of the biggest firms and financialized firms in the world, right? They have their own access to capital markets. If you’re talking about critical minerals, these are not exactly the largest firms that you have out there.
So that will be my first observation.
KARIM KARAKI: Yeah. I mean, I think on this issue, I mean, I agree to some extent with you. I still believe that sectorally speaking, there are differences.
I mean, in terms of local communities, the potential impact and also the fact that a mine is just, it’s not just a mine, it’s a mine connecting to infra, connecting to energy infrastructure. So the impact is not exactly, I think, similar. But independently of that, I think you have a real point in terms of perceived risk versus actual risks.
And I do think that from a European perspective, we tend to perceive risks are really high. And that has been like a really a barrier for European companies to invest. And, you know, what we try to also share with the others, including our European counterparts, is that, okay, you do not invest, but some other for Chinese firms, for Turkish firms, those risks are not too high for them to invest.
I mean, they manage to invest. They maybe don’t do it the same, exactly the same way. And then there’s also the criteria on ESG, like European standards and blah, blah, blah.
And I think there we also have to have a reality check. I mean, I think this is still where European firms have a competitive advantage. I mean, we see that in the work that we’ve done.
I’m talking specifically in CRM, not on, for example, transport infrastructure, where I do think that Chinese companies can build just as good type of infra than European companies. But I think this is also an additional element to bear in mind.
ERIC OLANDER: You talk about in your recommendations that Europeans should enhance the role of European firms across the CRM value chain. Let’s talk about this processing question. Poorva, you mentioned the fact that, well, maybe African countries can start to move up the value chain.
I bring a lot of cynicism to that and a lot of skepticism in part, because again, just as Giro brought up oil, let’s look at oil refining. There are fewer than 50 oil refineries on the entire African continent. Dangote in Nigeria just built the new one.
It’s a huge news. So if African countries have struggled to move up the value chain in the hydrocarbon sector, and the critical mineral sector is even more complex because the knowledge and the technology are concentrated in China, and China has made it pretty clear that it only wants to limit the type of technology and even limiting the people, as we’ve seen in India, that it gives access to travel and to set up these types of technologies.
It’s going to be even more difficult and even more costly. And I guess my question for Europe is that, you know, Kareem, you’ve brought up the question of European environmental regulations. And when people talk about critical resource mining, I think that they overlook just how violent it is.
I mean, there’s no other way to describe, when you look at the pictures from places like Indonesia, it’s traumatic what it does to the environment. And it’s hard for me to imagine that Belgium or France or Switzerland or Sweden would ever allow that level of pollution within its borders. And this is where Africa comes in, I think.
GERAUD NEEMA: Yeah, I know.
ERIC OLANDER: But what they’re going to do is outsource it to Africa. Exactly. So that they suffer the pollution cost.
And so I guess my question to Kareem is, if Africa is going to struggle to move up the value chain because it has struggled in many other sectors moving up the value chain, China is not inclined to let it move up the value chain, and Europe won’t allow it because of environmental regulations. How do you achieve that objective of moving European firms up the CRM value chain?
KARIM KARAKI: I think to me, you’re asking two different questions, which is like one, maybe more from the African side on what kind of opportunities there are really for them and their private sector. And the other is from like a European company’s perspective. So let me start with the first one.
I think that there on potential opportunities, we need a cold mind in a way, like what is actually doable and feasible in the given context. I mean, certainly, I do think that opportunities to move up the value chains will still be very, very difficult and very costly. Three weeks ago, there was an article published in the Financial Times on the need for the U.S. to build their processing and refining capacities in the U.S. and how costly it’s going to be so that accessing CRM is just not enough. So if we put that question at the African level, we’re going to have the same type of issues, even perhaps worsened. So there, I think that I also read some interesting analysis where they were basically suggesting why do we want necessarily like, so we could want the African private sector to come in and help position themselves in the more processing and refining levels. But do we really want that or do we want to use those investments to trigger other types of development?
So as I was saying, you know, for CRM, you invest in transport, you invest in energy, how you can better connect these to other types of endeavors and value chains as well. And there, there could be actually more opportunities to industrialize and transform economically than in the CRM sector. But you use the CRM sector to attract some of the investments, but then could be used for other sectors.
So that’s, I think, the way I see things on the way forward. On the European side, I think, I mean, I was saying that the commission has been slow and is generally tend to be a bit more reactive than proactive. They have launched a call for proposal recently for a CRM project, strategic CRM project, showing that at least they want to engage, you know, European companies in this endeavor.
And the idea for them is then to facilitate the access to finance that’s necessary to go in that sector. But more fundamentally, I mean, I think the day where we basically argue is, and I’m echoing Pova’s point earlier, is that, you know, you have to have a value proposition. What is it that Europe can sell, can offer to our partner countries in Africa, but also to China for collaboration to make sense and to have some degree of leverage.
And there, what we’re saying is that Europe is very much on at the peripheral level in CRM. So they’re not doing the mining, but they can provide services and products or machinery and equipment. So on geology, on the machinery, so that’s where they do have an added value.
On ESG, for now, it may disappear in the next five years, but they still have today an added value in terms of managing those risks and impacts. So there, the idea is that instead of being a single company that comes and provide that service for that mines and so on, is why don’t we try to have to bring those kind of factors together and offer like it would be a peripheral type of integrated offer, but yet one where there is a clear value proposition on the European side and that we can build on in order to do more diverse things on the way forward.
So I think that’s a big deal that we are trying to share through this blog.
POORVA KARKARE: If I can just quickly add to that, I mean, I will make maybe three points. One is, to your point, Eric, that yes, moving up the value chain in CRMs is very, very difficult. This is something that has been shown even from research, right, that these are called in economic terms forward linkages, where you move from mining to refining to yada yada yada.
Economic research has already shown that backward linkages, where you produce goods and services that will be required for mining, actually have a much greater development impact. But that’s just politically as well, not sexy enough. So that’s from an African perspective, that there is much more focus on those forward linkages.
From an EU perspective also, the point would be, the point with which I started, yes, at this point in time, China is the one country that produces these refined materials most competitively. But does it make sense for the entire world to depend on one source? Or should we be looking at other sources?
This does not necessarily address your question about ESG and refining being extremely polluting, and which is why they’re going maybe to African countries. On the other hand, it could be that if EU wants to work with partner countries, it can no longer think only about extractive relations. If it wants to show African partner countries that they are different to the Chinese, they need to pay some heed to these demands of greater value addition domestically.
So that’s all on the political and the framing and the conceptual side. Then in practice, what can the EU do? This is what Karim also laid out quite well.
So I’m not going to go into that. But then my third point was, what incentives would the Chinese have to actually work together, A, with the African countries to do refining and also with European countries to do more downstream activities? And there, I think, this is where you can also use the leverage of the EU’s own market.
ERIC OLANDER: Yeah, that was what I was thinking. If you want to sell a BYD car in Europe, you’re going to have to help us with refining and moving up the value chain. And that might be a deal that the Chinese take.
POORVA KARKARE: Exactly.
ERIC OLANDER: It’s very interesting.
POORVA KARKARE: Yeah. So it’s important to bring all these elements together and think about it a bit more constructively. And also, yeah.
GERAUD NEEMA: I’m just going to step back a bit on taking just the overall context of that debate taking place in Europe. When you wrote that, do you have the sense that there is a demand for it within the European Commission or European stakeholders? Because when you’re in Brussels, you have the feeling that when you bring those kinds of conversations, people are telling you, we want to try our own way first.
And if we fail, then we’re going to consider maybe a cooperation with China in Africa or with China itself. Do you have the sense now that given how Trump is moving? He said that, you know, America first, but not America alone.
But yet he’s trying to make his own deal. We saw France now trying to now being present, looking into how Americans are securing critical minerals in eastern part of the DRC. Do we have the sense now, given how the geopolitical shift is happening and how Trump is moving with the United States agenda first, do you have the sense that Europeans are much more sensitive and open to the idea that maybe we can walk into a trilateral cooperation with China in Africa, in the CRM?
POORVA KARKARE: I mean, if I can give my personal opinion here, I don’t think so. I don’t think it still is a long way away to think about this in a very longer term situation or trying to involve also third countries. Right now, the tensions in Europe, there is, to my mind, a geopolitical frenzy.
And again, it’s because of the world that we are in, where Europe is caught amongst several contradictions, whether you’re talking about Iran, whether you’re talking about how they deal with African partners, whether it’s about how dependent they are on China, whether it’s about how relations, transatlantic relations are breaking down. So there’s, Europe really feels from all sides, there are issues right now. So it’s not at the stage where they are thinking about, right, if we want to have stronger partnerships with third countries, for instance, in Africa, we will have to do it in such a way that we also work together with the Chinese, because at the end of the day, whether we like it or not in Europe, China is an important partner to African countries.
That kind of thinking is yet to come. And hopefully, blogs like this help kickstart the conversation. But I do think we are still further away from that kind of debate, precisely because all these other fronts on which Europe is trying to figure out how to react, and is taking up the entire bandwidth, right.
And right now, the CRM’s agenda is also seen much more from the perspective of, right, we want to reduce our dependence on China. Therefore, it means we cannot work with China under any circumstances. I mean, I’m wrong, but this is how it probably is going.
GERAUD NEEMA: Before Karim gets, because I see Karim wanted to add something, I just want to add another point to that. What needs to happen for that mindset to shift in Europe, to be open to that conversation? From your perspective, of course, what do you see that, what needs to happen?
POORVA KARKARE: To my mind, it’s a lot about trying to understand what partner countries themselves want. And for partner countries as well, to be much more assertive. So just to give you a small example of the ESG, where you have, I think it was one of the briefs that Kobus wrote, where it says that in Mozambique, they actually divided an infrastructure project for the Katembe Bridge in two parts, where the contracting side was given to the Chinese to build.
But then for the ESG, they actually wanted a European firm to do it. So if partner countries as well can be a bit more assertive, because it would be too simplistic to say that producer countries are not interested in ESG, they are interested in ESG. But they also struggle with figuring out how to make it work with the Chinese and bring all of these things in.
So if we can think also a bit more innovatively and outside of the box, maybe there is a way for the Europeans as well to show how niche their offer is and get the best of both worlds or all three worlds for all three partners involved. But I think it will have to start also by bringing in third country elements to it, and not simply thinking only about EU and China and the tensions therein, because there are genuine tensions there. I don’t want to belittle that.
But if we broaden it a bit, then maybe we can think of innovative solutions.
ERIC OLANDER: And Karim, we’re going to give you the last word, help us kind of shape all this, you know, put it all together.
KARIM KARAKI: I think it was an excellent question, maybe excellent way as well towards the end of this interview. I mean, fundamentally, I think these two things, the narrative has changed at the European level. So I think if you compare what the EU was saying back in 2022, and what is saying now about China, the language has softened.
So they show a bit more open-mindedness, at least in collaborating with China. At least that’s the words. In practice, I think at the political level, even not only at the EU level, but if you bring that at the member states level, then politically, it’s very difficult for politicians to sell that idea that they will work with China and, you know, work together in order to do something interesting, even on CRMs. But I think exactly the example that you were mentioning on BID. So if you say, if you want to access the market in Europe, then you need to also provide like small proteins for European firms. If you say that, you know, by basically working with China, you’re also able to leverage their financing power so that you don’t have to pay, for example, like for the wall refining activity, but just part of it because China is coming in as well. Then, you know, that makes it kind of a more concrete type of win-win type of situations.
And it’s not so much as a win-win, but the point is, if you want Europeans to change their mindset around working with China, you basically have to play not only the development card that I think Poova also explained very well, but how that fits within their own kind of competitiveness and strategic autonomy agenda, their security and value change agenda. So I think all of this needs to come together. And I think the argument will be much stronger if you start, well, as part of the European competitiveness compass, you want to achieve, you know, like this green transition on digital and green, that requires a lot of CRMs to do that.
And so we can help you do that by working with China, you’ll be more efficient, you’ll, you know, spend less and achieve more impacts and have at the end of the day, also a better relation with partner countries. I think that’s a point that Poova was also mentioning about them also being more assertive and saying what they want. But I think, you know, if you talk to Europeans, stakeholders, then I would really suggest to bringing this kind of geopolitical and economic interest narrative, which will be more powerful to sell and like this collaboration with China.
ERIC OLANDER: Yeah. And of course, if you talk about playbooks, the forced transfer or the conditionalities of market entry, of course, is what China did for decades, that if you wanted to get into the China market, you had to go into a joint venture, you had to transfer technology, you had to do skills transfer. So they know very well what it’s like to attach conditions on to market entry.
And it article is the EU’s Playbook for African Minerals Amid China’s Dominance. It’s over on the ECDPM website. We’re also going to put it in the show notes.
And I want to thank Poova Kakkari, Senior Policy Analyst at ECDPM. And also Karimi Karaki, who is the head of ECDPM’s Economic Recovery and Transformation Team, for taking the time today to join us to explain all of the complexities of this issue. Really appreciate your time.
Thanks very much, Neel.
POORVA KARKARE: Thank you very much.
ERIC OLANDER: I have very mixed feelings after this conversation, because on the one hand, I do admire what Poova and Karimi are trying to do. I’m going to go back to my first question. It’s 2025 and they are struggling to get CRM on to the agenda in the way that it needs to be.
And the European Union’s biggest problem, as they’ve talked about, is the commission moves so slow. 27 countries have a very difficult time making decisions collectively. This is a space that is rapidly changing.
And one of the advantages that the Chinese have, which people don’t talk about as much, is their ability to move very fast. That is something that I’ve seen in the Congo. We’ve seen it in Chile.
We’ve seen it all over the world, everywhere. And so honestly, I don’t buy what Donald Trump is saying. I don’t think the Americans are going to get anything out of these Rwanda DRC deals.
I don’t think the Americans have the mining companies to do it. I don’t think they have the guts to do it. I think they’re too risk averse.
And also, how are you going to convince American companies that are bottom line driven to go into these markets when cobalt is still, even with the ban, is still hovering near low prices, lithium is at low prices, nickel is at low prices. There’s not a lot of money to be made in these markets right now.
GERAUD NEEMA: But so far, we’re not even talking about Americans being in the copper and cobalt industry right now in this deal. We are talking about Americans being present much more in the eastern part of the DRC where we don’t have copper and cobalt. We have other minerals like tin, tantalum.
ERIC OLANDER: We have gold, of course. You have a lot of gold over there, too.
GERAUD NEEMA: Yeah, tantalum, coltan, tin, cassiterite, all of that. It’s more about that. We even have conversations about American companies being interested to buy one of the largest DRC coltan mines and being there.
ERIC OLANDER: But let’s be just brutally direct here. Do you think that American companies, and I’m going to use, you know, have the balls to be in the eastern DRC? Yeah.
I mean, this is in the Kivus, this is one of the most volatile regions in the world for large scale mining, not small scale, large scale mining, industrial scale mining. Do you think today in 2025 that European and American companies, I mean, even the Chinese are reluctant to be in that part of the country? Yes, true.
GERAUD NEEMA: Even the Chinese are very much reluctant to be in that part of the country. But the reality is we also had an American company being present, Alpha Min BC. But interestingly, they already sold the operation.
ERIC OLANDER: Pretty small though, right?
GERAUD NEEMA: No, it’s quite large. It’s a very industrial large mining operation in the eastern DRC. It’s very large.
But interestingly enough, they sold the operation to Emirates company like two weeks ago, which was a kind of surprising move for many people. But yes, what you’re mentioning, that’s reality. When you take into account that the instability in the region, that it’s just going to take one gunfight happening in the region for like two or three days, and you’re going to have a CEO of an American company being in a position where it cannot convince its board of directors that we need to go in the eastern part of the DRC.
People are going to tell him, why are we going to go there? Why do we need to be present there? Because when you look into the context of the market, even when we are not there physically present, we still have access to those minerals through the different channels of the supply chain where we work with Chinese companies and other companies that are present there.
So we don’t really need to be physically present there because the connection within the supply chain makes us still have access to those minerals. So yes, to your point, when you look into the context, there’s still going to have a lot of incentive and work to be done to convince American companies to be there. Donald Trump signing, Marco Rubio signing, Paul Kagame, Felicitas Akedi signing the deals will not cut it, will just not change the whole situation from messy to be a very idealistic place where you can do large scale mining business in Africa.
ERIC OLANDER: This is the 2022 Zambia DRC US EV battery value chain MOU all over again, because at the end of the day, the United States is not willing to put resources behind these deals. They’re not going to put troops on the ground. They’re not going to put billions of dollars.
They’re not going to put state backed money into it in large commitments. It just doesn’t seem like they’re going to be able to do that. But let’s also just refresh everybody on what it’s like to operate in that part of the country.
Do you remember there was a video back when Alain Foucault, who is a very famous, I think, is he Cameroonian?
GERAUD NEEMA: He’s Cameroonian. Yes.
ERIC OLANDER: Yeah. He’s Cameroonian journalist. He did a report where he flew to the Eastern DRC, got off the plane and Congolese soldiers greet him at the plane and basically forced him back onto the plane out again.
And according to him, these Congolese soldiers were hired by Chinese mining companies to keep people like Alain Foucault out. The reality is that the Americans, for all their talk in the Europeans as well, I don’t see them hiring large quantities of Congolese soldiers to operate that way. And Alain Foucault was so shocked that Congolese in their own country couldn’t go to some parts of the country because these soldiers were under the direction or the hire of Chinese mining companies.
GERAUD NEEMA: I could make a comment on that documentary from Alain Foucault because a lot has not been said about his story, but that’s beside the point. I’m not going to mention that.
ERIC OLANDER: It’s the gray area. The point is just the gray area of how to operate in this part of the world where there’s very little governance, there’s no rule of law, and it is one of the most dangerous, difficult parts of the world where the Chinese have shown an inclination in Afghanistan, in Indonesia, in some of the more violent parts of the world. And again, parts of Indonesia is a very tough place to do this, Myanmar.
And there’s a certain culture of the Chinese mining sector that seems to do well in that environment. I don’t get the sense that Europeans and Americans have the stomach for that.
GERAUD NEEMA: And this is the part of the deal that was signed in D.C. where they believe that’s going to solve the situation because the mindset in D.C. was to say that the instability in the eastern part of the D.R.C. is caused mainly by Rwanda, which is a very reductive way to portray the situation on the ground. But Rwanda is a part of responsibility, but not the biggest part. So the idea is that Rwanda is the biggest responsible for the instability in the eastern part of the D.R.C. So having D.R.C. and Rwanda to sign an agreement in one hand will create less instability in the eastern part of the D.R.C. Second of all, having now America’s company, the United States signing with the D.R.C. will deter Rwanda to try to finance instability in the eastern part of the D.R.C. But the problem with that narrative is like it’s just not taking into account all the parts of the complex issue that’s creating instability in the eastern part of the D.R.C. And Rwanda is not the only problem. And frankly, some would say it’s not the largest problem that’s kind of creating instability in the eastern part of the D.R.C. And people need to understand that. And I do believe that the agreement is not taking that into account. And I’m expecting that many American companies will be surprised to notice that instability is still continuing with local armed groups and local business leaders when Rwanda is not even present there.
ERIC OLANDER: My forecast is that next year or the year after at this time, we’re not going to see American companies there. We’re not going to see European companies there. We may not even see Chinese companies that are there.
Oh no, Chinese companies are not there. I remember the Chinese embassy. Well, they said get out.
I mean, you see the small independent actors who are there. So a couple of years ago, the Chinese embassy in Kinshasa gave a warning and basically an ultimatum to their people in the eastern D.R.C. I think it was both the north and south Kivu and Ituri provinces where they basically said you have until December 5th to get out or else you’re on your own and we’re not going to help you because there were so many killings and kidnappings of Chinese nationals, which we cover quite regularly is still going on.
And it just it’s it’s just I mean, an amazing testament to the fact of that these people go to that part of the country. And I mean, it’s just really quite remarkable.
GERAUD NEEMA: And earlier this year, the Chinese embassy in Kinshasa said that formally there is no legal Chinese companies operating in the eastern part of the D.R.C. So if you do find a Chinese operating mining operation there, arrest them. Don’t hesitate. Arrest them.
So basically, they are ready to throw their own their own compatriots under the bus to say, you know what, we are not there. You cannot count on us being present in those spaces over there. So, yes, that eastern part of Kong is very unstable.
It’s a very volatile place. And I do believe that that deal does not address all the complexity that’s needed to be addressed to have real peace and stability in the eastern part of the D.R.C. So I just want to close very quickly on another aspect of all this.
ERIC OLANDER: We often talk about African countries moving up the value chain. And I was mentioning how difficult it is for African countries. And we don’t see it happening in a large scale.
However, we must focus on Morocco. And Morocco is a standout in this discussion. So the Chinese just opened a new EV battery plant that’s there.
And that again shows that the automotive supply chain in Morocco is, in my view, by far the most advanced in Africa. And it does show that it’s happening in Africa. You know, and again, this might be the place that we focus this conversation on instead of talking about refining in the Congo, where that’s hard to imagine because there’s not enough power alone to do that.
But in the industrial hubs of South Africa and Morocco, for example, and to some extent even in Egypt, where auto manufacturing is starting to gain momentum, that might be where we focus the attention on actually moving up the value chain. I am just very skeptical that the Chinese are going to offload large parts of the advanced part of the critical mineral refining processing supply chain to African countries or any other global south country. I think that’s going to be what they want to keep at home for themselves.
They might offload some of the lower end of the initial processing, as they’re doing in Nigeria and Zimbabwe. But I don’t see the advanced processing happening outside of China.
GERAUD NEEMA: The argument I’ve made a few weeks back in a paper that I’ve published with the European think tank when I’m talking about the complexity of the EU-Africa-China cooperation in the CRM, I was mentioning the fact that not every producing country in Africa is going to be in a position to win in terms of value addition. Because on a cross board, the debate on CRM value addition really takes place in a context where you need a very basic industrial hub to be present. You need a solid industrial hub to be there.
And the reality is most African countries do not have that. That’s what made Morocco more attractive to the Chinese, because they already had years of assembling cars coming from Europe, years of assembling Peugeots, Renault, all of those cars. So when China says, I want to have access to the European market, they realize that Morocco has access.
Morocco is easy. Morocco has an industrial hub. It has the know-how, the expertise, because they’re already there.
So it’s easy for us to transport large parts of our supply chain in Morocco because it makes sense economically. And second of all, because after Morocco, we have access to a larger market in Europe. This is much more easy for us because we tend also to forget that CRM value chain is also about economy of scale.
When you look into how many new cars African countries have sold last year, you’re going to see that it won’t be so evident for DRC to have local value chain and building all of that when you don’t have a market where all those batteries are going to go to. When you don’t have a market where people are going to buy new cars and all of that. Those are the complexities that we don’t always take into account in that debate.
Beyond the electricity, the waters, all of that, the know-how, the expertise, it’s also just the economic argument that it’s very fragile in many African countries to make a strong economic case to say, you know what, you can do it in my countries because I have all the conditions gathered here.
ERIC OLANDER: This is the one problem. Well, we’re going to put a link to Géraud’s article from the African Policy Research Institute also in the show notes. So we’ll have two stories for you to follow in the show notes about EU, China, Africa and the critical resources supply chain.
It’s a fascinating topic. Again, as you hear, it’s going on with the Indians, the Americans, the Europeans and many African countries. This is a hot topic and Géraud and our colleague Obert Borey are covering it over on the website at ChinaGlobalSouth.com.
Listen, the work that we’re doing over there, nobody else is doing at the pace and the volume that we are. And the team that Géraud has in place to cover these stories, again, unrivaled. Nobody’s covering the China angle the way we are on this.
And we’re actually digging deeper into what the Chinese discourse is saying, what’s happening in China, what are they saying? This is a part of the discussion that is very poorly understood outside of China. That’s the kind of insight that we’re bringing.
We’d love for you to support the work that Géraud and Obert and the rest of the team are doing. Go to ChinaGlobalSouth.com slash subscribe. Subscriptions are very affordable, $19 a month.
And if you are a student or teacher, remember half off, email me, Eric at ChinaGlobalSouth.com and I will send you links for a 50% discount. So let’s leave the conversation there. Géraud, Cobus, myself and the rest of the team will be back again next week with another edition of the China in Africa podcast for Géraud in Mauritius.
I’m Eric Olander. Thank you so much for listening and for watching.
