China’s Mineral Acquisition on a Global Scale: Strategic Race for Essential Resources

The competition for control over critical minerals such as lithium, cobalt, and rare earth elements has evolved into a pivotal geopolitical struggle in the modern era. It transcends the realm of batteries and smartphones, shaping the global power dynamics of the 21st century. China’s aggressive pursuit of mining acquisitions abroad, notably in regions like Africa and the Middle East, goes far beyond mere commercial transactions. These endeavors are strategic maneuvers aimed at solidifying its supremacy in the booming $12 trillion clean energy and tech industries. This unfolding scenario presents both a high-stakes opportunity and a cautionary signal for investors that cannot be ignored.

The significance of critical minerals in the context of the green revolution cannot be overstated. Lithium serves as the lifeblood of electric vehicle batteries, while cobalt plays a crucial role in high-capacity cathodes. Rare earth elements are indispensable in a wide array of applications, including semiconductors, wind turbines, and defense systems. With China already exercising control as the prime refinery for 85–90% of global rare earth elements and 59% of lithium production worldwide, the country has intensified its efforts to secure raw material supply chains through an aggressive approach to mergers and acquisitions. Since 2023, China’s annual acquisitions in Africa have surged to an estimated $8–10 billion, dwarfing the investment levels of its Western counterparts like the United States, which reached $300 million in 2023 through the DFC.

China’s strategic blueprint to dominate the critical minerals sector is crystal clear—to command the “upstream” domain of mining operations in order to dictate the “downstream” realm of manufacturing activities. Key projects emblematic of this strategy include the acquisition of a substantial stake in the DRC’s Tenke Fungurume Mine, securing 20% of the global cobalt production. In Mali, the Bougouni Lithium Mine venture, valued at $100 million, aims to produce 45,000 tons of lithium concentrate annually. Also, the acquisition of Zambia’s Lubambe Copper Mine for $1.875 billion serves to secure a significant supply of cobalt-rich copper. These moves are bolstered by the involvement of state-owned enterprises such as China Molybdenum (CMCO) and Gangfeng Lithium (GANFX), which draw support from an annual funding pool of $21.4 billion under the Belt and Road Initiative (BRI). Consequently, China now imports 72% of its cobalt from the DRC and 58% of its manganese from African sources.

Despite the extensive footprint China has established in Africa, its activities in the Middle East have largely remained underreported. While direct acquisitions of lithium and cobalt assets in the Middle East are limited, infrastructure initiatives proposed by China hint at broader ambitions. The Tanzania-Zambia Railway project, funded by China, facilitates the transportation of minerals to the Port of Dar Es Salaam—a conduit for trade with the Middle East. Moreover, with significant rare earth reserves in Iran and untapped lithium potential in Saudi Arabia, the region presents intriguing prospects for exploration and future partnerships. The stock of Gangfeng Lithium surged by 47% during 2023–2024, reflecting investor confidence in the company’s African lithium projects.

In response to China’s assertive stance in the critical minerals landscape, the United States and other G7 nations are stepping up efforts to counterbalance the growing influence of China through initiatives like the Minerals Security Partnership (MSP), which seeks to diversify global supply chains. Projects such as the Longonjo Rare Earths Project in Angola, supported by a $3.4 million DFC grant, and the Lobito Corridor in Zambia, a U.S.-backed rail infrastructure alternative, are examples of attempts to challenge China’s dominance. However, the sheer magnitude of China’s Belt and Road funding, estimated at $2–$3 trillion, eclipses the collective efforts of Western nations, turning Africa into a critical battleground for resource control.

For savvy investors, opportunities abound in companies engaged in Chinese-backed projects in Africa, offering a careful balance between growth potential and associated risks. Leading firms like Gangfeng Lithium (GANFX), driving the Mali-based Goulamina Project with a significant investment aimed at an annual lithium production of 45,000 tons, China Molybdenum (CMCO) overseeing the Tenke Fungurume mine—a multi-billion-dollar cobalt-copper venture, and Zhejiang Huayou Cobalt, operating the Goromonzi lithium plant in Zimbabwe, represent viable investment options riding the wave of the burgeoning critical minerals market. The stock of China Molybdenum surged by 31% during 2023–2024 following stabilization of cobalt prices in the wake of China’s market interventions.

While the investment landscape offers promising potential for significant returns, conscientious consideration of risks is essential. The concerns include the mounting backlash over environmental, social,