In recent months, Saudi Arabia and the United Arab Emirates (UAE) have intensified their efforts to establish a foothold in Africa’s critical mineral industry. This strategic push comes at a time when both Gulf states seek to diversify their economies away from oil dependence and into sectors like renewable energy and electric vehicle manufacturing. However, their ambitions also risk generating geopolitical tensions, particularly with China, which currently dominates the critical mineral landscape in Africa.
Strategic Moves in the Mineral Sector
On May 27, 2024, Abu Dhabi’s International Holding Company, a government-backed investment entity, revealed its negotiations with the Zambian government to acquire Konkola Copper Mines. This move underscores the UAE’s commitment to increasing its investments in critical minerals—essential for manufacturing electric vehicle batteries and renewable energy infrastructure. By tapping into these resources, Saudi Arabia and the UAE aim not only to secure lucrative returns but also to position themselves as key players in the clean energy sector.
The UAE has taken the lead in these endeavors. In July 2023, it signed a significant $1.9 billion deal with the Democratic Republic of Congo’s state-owned mining company, Sakima, to develop four critical mineral mines. Following that, in December, the UAE secured a $1.1 billion investment in Zambia by acquiring a 51% stake in Mopani Copper Mines. Furthermore, International Resources Holdings, a subsidiary of International Holding Company, has partnered with Jubilee Metals Group to recover an estimated 350 million metric tons of copper in Zambia.
In contrast, Saudi Arabia is making strides but has not yet finalized any significant deals. The Public Investment Fund has expressed interest in the Democratic Republic of Congo’s critical minerals, and at the Future Minerals Forum held in Riyadh, the kingdom signed memorandums of understanding for mining investments with several African countries. The recent establishment of Manara Minerals—a joint venture between the PIF and Maaden—highlights Saudi Arabia’s ambitions to invest in mineral resources globally.
Geopolitical Dynamics and China’s Influence
The growing interest of Saudi Arabia and the UAE in African critical minerals carries significant geopolitical ramifications. China currently maintains a dominant position in Africa’s mineral sector, controlling 72% of the cobalt and copper mines in the Democratic Republic of Congo alone. This monopoly presents a potential challenge for the Gulf states as they navigate the complexities of entering a market where China has long been entrenched.
Despite their current low levels of investment compared to China, recent bids from Emirati firms could signify a shift in the balance of power. Reports indicate that Abu Dhabi’s International Resources Holdings is interested in acquiring an 80% stake in Zambia’s Lubambe Copper Mine, complicating existing negotiations between Chinese firms and the Zambian government. If the bid is successful, it would mark the first significant challenge from Gulf nations against China’s mineral investments in Africa.
U.S.-Gulf Cooperation in the Minerals Sector
Amid the geopolitical landscape, the United States is also looking to leverage its relationships with the Gulf states to enhance its own strategic interests in African critical minerals. Talks are reportedly underway between U.S. officials and Gulf countries regarding potential economic partnerships that could provide U.S. companies with purchasing rights to Gulf mineral investments. This would indirectly grant the U.S. access to Africa’s critical minerals and help counter China’s dominance in the sector.
While such partnerships could strengthen economic ties between the Gulf states and the U.S., they also risk embroiling these countries deeper in the broader geopolitical competition between the two superpowers. Should the U.S.-Gulf collaborations flourish, China might view Saudi Arabia and the UAE as aligning with American interests, which could strain their bilateral relations with the Asian giant.
Conclusion
As Saudi Arabia and the UAE pursue their ambitions in Africa’s critical mineral industry, they face a landscape rife with economic opportunities and geopolitical complexities. While their investments could significantly impact the global clean energy sector, they must also navigate the established dominance of China and the emerging involvement of the United States. The coming years will reveal how these Gulf states adapt to the multifaceted geopolitics surrounding Africa’s rich mineral resources, and whether they can carve out a significant role in this burgeoning industry.
