Chinese companies scouring for strategic minerals in South America and Africa
Chinese companies are looking for lithium, cobalt and nickel, key for batteries for electric vehicles. As a result of restrictions imposed by the United States and its allies, China is looking for new markets; however, its investments are hampered by political instability in South America and Africa. Pope Francis warned against the exploitation of Africa.
Beijing (AsiaNews) – Chinese companies are scouring the world for strategic minerals to support their country’s booming demand for electric and hybrid vehicles.
The batteries that power cars use minerals such as lithium, cobalt, and nickel, which are widely available in South America and Africa.
China depends heavily on imports of these precious minerals, which Chinese authorities view as crucial for national security.
Growing geopolitical tensions with the United States is forcing China to look for new suppliers.
Recently, the United States and its allies have adopted policies that limit foreign ownership of their own mining assets, a measure in fact directed at Chinese competitors.
Above all, Canada has imposed restrictions on Chinese companies that have harmed Chinese interests. As Caixin notes, 1,400 out of 2,400 mining companies operating in the world are under Canadian control.
South America is of great interest to China because Argentina, Bolivia and Chile hold 53 per cent of the world's lithium reserves (about 98 million tonnes).
South American countries are open to Chinese investment in this sector because they hope to obtain capital and technology to develop their own industries.
However, political instability, strong trade unions, low productivity, and strict environmental rules make it hard to invest in the region.
That is not the case in Africa, which holds two thirds of the world's cobalt and 10 per cent of its copper. And exploration for lithium has begun.
Chinese companies have been investing in Africa for years, but their interest in the continent’s mines has grown a lot since the second half of 2021.
Africans are attracted to Chinese capital for the same reasons that South Americans are; but they also have the same problems, especially regarding political instability and widespread corruption.
Conversely, for Chinese mining companies and multinational firms from other countries, exploiting the local African populations does not seem to be a problem.
Pope Francis's warning during his recent trip to the Democratic Republic of Congo still resonates; on that occasion, he reminded world powers that Africa is not a mine to be exploited or a land to be plundered.
The Democratic Republic of Congo supplies 70 per cent of the world's cobalt with 80 per cent going to China. Of the 19 top companies in the sector, 15 are wholly or partly owned by Chinese firms.