Geopolitical Competition Archives

Authors: Dan Ziebarth, Ingrid Heggstad, Miguel Jiménez Admetlla, Michele Mignogna - Political Economy, development & Energy Security Team

Introduction

The need for critical minerals to achieve the energy transition cannot be stressed enough. According to the International Energy Agency, demand for these minerals will increase by a factor of four to sixfold. Just as with many other trends that begin to unfold, Africa holds the key since it sits on a vast supply of these resources. Yet, the way the continent approaches this matter could determine whether its history is rewritten or if there is a perpetuation of an uneven distribution of resource gains.

Several key indicators highlight Africa's importance in this context. More than half of African countries possess green minerals essential for the energy transition. Notably, the Democratic Republic of Congo boasts half of the world's cobalt reserves, crucial for batteries and electric vehicles. To fully leverage these resources, Africa must integrate its supply chain processes, capitalizing on value addition at every stage, from extraction to transportation.

Balancing a Just Transition for Africa: Challenges and Imperatives

Mineral supply chains typically involve four stages, which can broadly be divided into extraction, refining, production, and recycling. Currently, the vast majority of African countries export critical minerals in their primary form, trapping the continent in a cycle known as the primary commodity trap.

Accordingly, Africa perceives a tiny percentage of the overall benefits, with forecasts suggesting that this situation is unlikely to improve shortly. Out of the projected $8.8 trillion market value of global batteries and the supply chain of EVs, only $55 billion is expected to flow to Africa. Thus, there is an urgent need for substantial reforms. However, this goal conflicts with the interests of countries aspiring to lead in renewable energy transitions. Indeed, to maintain sustainable growth without compromising inputs, these nations are eyeing the continent’s supply of rare earths.

While ensuring that necessary minerals reach global markets is crucial for meeting climate agreements, the pioneers in energy transition such as the EU, the US and China ought to design climate policies which hold high standards. At the same time, even though some sort of protectionism has been put in place in the continent, this may be rather ineffective if ownership along the supply chain remains foreign. If the opposite occurs, it could turn out to be a Berlin Conference of the 21st century.

Co-opetition for Resources in Africa: The EU & China

Thus far, the EU has adopted the Critical Raw Materials Act (CRM Act) which sets ambitious targets for mineral processing, emphasizing reduced reliance on third countries. Precisely, it establishes targets for critical raw materials of meeting 10% of annual needs mined materials, 15% recycled materials, and 40% of materials processed in Europe by 2030 for minerals, while simultaneously not relying on a single third country for more than 65% for any material. Remarkably, two major roadblocks should be noted for the EU to achieve these targets.

The first involves intensifying global competition for resources in Africa, particularly about China. As the green transition progresses, states are increasingly reliant on critical minerals from Africa, fueling competition for influence over these strategic resources. Aware of the risks associated with overreliance on a single supply chain, African countries have strategically prioritised diversifying their mineral partnerships. This strategic recalibration has added another layer of complexity to the geopolitical landscape, as access to the supply chains of critical minerals becomes yet another arena for the intricate dynamics of great power rivalry to unfold.

International competition for access to critical minerals navigates through alliances and rivalry alike. Geopolitical manoeuvring by influential players such as the US, China, and the EU is intricately tied to securing and managing critical minerals' supply chains. China possesses a dominant position in producing and refining African critical minerals, giving it significant influence over supply chain dynamics and sparking concern among other key stakeholders such as the EU and the US. This influence is evident in regions like the Horn of Africa, where the evolving engagement of China and the EU reveals intersecting interests and potential for both competition and collaboration.

While China's growing economic presence in the region, driven by access to critical minerals and infrastructural projects, contrasts with the EU's emphasis on security initiatives and governance reforms, Chinese involvement has nonetheless produced benefits for infrastructural and economic development. Additionally, their security operations, including peacekeeping and anti-piracy efforts, have contributed to increased regional stability. These positive outcomes challenge prevalent negative narratives in the West regarding China's involvement in the region, offering the potential for cooperative influence and increased opportunity for strengthened stability in the region. Although it would require thorough preparation and collaborative endeavours, Chinese and European involvement in the Horn of Africa holds the potential for a mutually beneficial outcome.

Additionally, a second major consideration regarding the CRM Act is ensuring that local communities in Africa are safeguarded, while also supplying enough critical minerals to achieve targets. A common concern locally is that extractive industries, such as mining, will place several negative consequences on the environmental and social conditions in mining communities in Africa. To ensure a just transition, the mineral supply chain process must provide sufficient protection for mining communities in Africa to not harm or exploit them over the long term. Within this geopolitical context, African countries emerge not solely as suppliers of the critical minerals for the green transition but also as significant influencers in shaping global power dynamics.

As these countries strive to break free from the primary commodity trap, their choices concerning trade agreements, alliances, policies for resource extraction, and infrastructure expansion resonate throughout the entire supply chain. African countries’ involvement introduces a new dimension to international competition, where countries and blocs vie not only for access to critical minerals but also for influence over their strategic decisions.

Africa's mineral wealth forms an essential bedrock for industries worldwide, as the supply chain of strategic minerals extends across multiple facets in the development towards sustainable solutions. Therefore, countries depend on a consistent and unbroken supply of these minerals, wherein the evolution and dynamics of this supply chain can send shockwaves throughout the global economy and geopolitical landscape.

Conclusion

In conclusion, the continent, and the whole world, stands at a crossroads. The approach to African resource management will determine whether it can break free from historical patterns of exploitation. The goal, as stated in the African Green Minerals Development Strategy Approach Paper, is to guide Africa to strategically exploit the continent’s green mineral resources for industrialisation and to assert control over its destiny to create an African presence in emerging green technologies. A shift towards integrated supply chain management, sustainable extraction practices, and prioritisation of local community welfare is imperative to harness the full benefits of Africa's mineral wealth while mitigating adverse consequences.

In this context, international cooperation and strategic partnerships are essential to navigate the complexities of the evolving geopolitical landscape surrounding critical minerals and to ensure that the global shift to clean technologies does not come to the detriment of African communities.

Long story short, Africa's pivotal role in the global supply chain of critical minerals underscores the continent's potential to shape the trajectory of the energy transition and influence global power dynamics. By making informed choices and fostering cooperation, African countries can not only unlock economic opportunities but also play a significant role in shaping a more equitable and sustainable global future.

However, this potential comes with significant challenges and considerations.

Authors: Miguel Jiménez Admetlla, Michele Mignogna, Dan Ziebarth - Political Economy, Development, & Energy Security Team

Introduction

Fight against global warming, on the one hand, and the necessity for exploring new sources of resources to feed renewable technologies, on the other hand, makes for an interesting paradox. Ongoing COP28, which is already a paradox as it takes place in the capital of one of the largest oil and gas producers, is regarded as one of the last chances to launch compelling measures to phase out fossil fuels for humanity to have a manageable future. According to NASA, the average global temperature on Earth has increased by at least 1.1º Celsius since 1880, not an optimistic trend if we consider the threshold set by the International Energy Agency at 1.5º Celsius to avoid catastrophic impacts on the global climate.

A direct solution for this is accelerating the transition towards renewable sources so that emissions are drastically reduced and growth and development are not compromised. However, for this to occur, critical minerals, such as copper, nickel, aluminium, manganese, zinc, lithium, and cobalt, are needed in vast amounts. More specifically, the World Bankestimates that production for some of these metals will need to soar by 500% by 2050. Yet, for this to occur, untapped sources have to be considered. In this context, deep-sea and Arctic ice mining is increasingly becoming plausible.

In this context, the tradeoffs, at least those that are known, for accessing the endowments of the seabed cannot be overlooked. On the one hand, besides being a new source for resource extraction, this activity presents other advantages worth mentioning. For instance, moving the extraction offshore might relieve terrestrial ecosystems from the damage that conventional mining brings. Furthermore, the economic opportunities that may blossom are considerable. On the other hand, even though terrestrial mining might be slowed down, mining offshore carries its risks, such as habitat destruction, biodiversity loss, and disturbances to ecosystems that are poorly understood. Indeed, 38% of the carbon dioxide generated by humanity is stored in the deep ocean, and the breakdown of even a tiny fraction of the marine sediments it stores could exacerbate climate disruptions. These are solely the consequences of what is known, as 75% of the seabed remains unexplored, and only 1% of the deep ocean has been researched.

In this current landscape, the Arctic has become a focal point of geopolitical competition, primarily due to its rich natural resources. Its vulnerability and crucial role in maintaining the current climate status quo make it an area of significant concern. In the following section, we will delve into the key international norms and behaviours exhibited by states that define this region.

Introduction to the Arctic

To understand the geopolitics of the Arctic and the accompanying “race for resources”, it is essential to consider relevant bodies and treaties governing this region. The Arctic Council is one of the integral bodies governing the Arctic. The United Nations Convention on the Law of the Sea (UNCLOS) is an equally crucial international convention for governance in the Arctic region. There are numerous other meaningful international agreements relating to the Arctic, ranging from climate change and environmental protection to the rights of indigenous peoples and issues related to waterways.

The Arctic Council is an intergovernmental forum integral to policy-making and diplomacy in the Arctic region. The Arctic Council was formed in 1996, and its member states include Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States. There are also six permanent participants from Indigenous Populations, which include the Aleut International Association (AIA), the Arctic Athabaskan Council (AAC), the Gwich’in Council International (GCI), the Inuit Circumpolar Council (ICC), the Russian Association of Indigenous Peoples of the North (RAIPON), and the Saami Council. Additionally, there are thirty-eight international observers, comprising representatives from various states, intergovernmental and interparliamentary organizations, and non-governmental organizations. Their primary role involves engaging with and proposing projects in collaboration with the member states and/or permanent participants within the Arctic Council.

UNCLOS is a central international convention for the Arctic region and was adopted in 1982. It lays down a comprehensive regime of law and order in the world’s oceans and seas, establishing rules governing all uses of the oceans and their resources. All the Arctic states are parties to the Convention, except for the United States. Much of the discussion about the United Nations Convention on the Law of the Sea (UNCLOS) has centered on the United State’s refusal to ratify it, which, according to proponents of ratification, has left US interests unsecured in a rapidly warming and increasingly accessible Arctic.

*Source: https://foreignpolicy.com/2020/10/13/arctic-competition-resources-governance-critical-minerals-shipping-climate-change-power-map/*

The Loss of the Unknown

In recent years, it has become clear that countries seek the Arctic as an increasingly important area for accessing resources and a source of rising geopolitical tensions. In particular, mining and mineral extraction are becoming central issues of concern. Alongside this, attempts from rising powers such as China and India in the Arctic have raised new issues of competition and transnational relations in the region.

Despite international calls for a global moratorium, Norway is looking to become the first country to start commercial deep-sea mining. This is particularly significant, as Norway is a member of the Arctic Council and a powerful political and economic actor in the Arctic region. Thirty-one countries have pledged to stop all deep-sea mining in the polar areas at the One Planet Polar Summit. In June 2023, the Norwegian parliament approved a deep-sea mining project to explore 280,000 square kilometres of seabed around the Svalbard archipelago, an area spanning into the Arctic region. This ambitious project aims to secure a strategic advantage in accessing new minerals and metals. However, it poses potential risks of adverse environmental impacts.

Geopolitically, the growing presence of Chinese exploration and enterprise in the Arctic has led to rising competition. In its 14th Five Year Plan, China plans to “participate in practical cooperation in the Arctic and build the “Polar Silk Road” (PSR). China established the PSR program in 2017 as part of the larger Belt and Road Initiative (BRI). Simultaneously, India became a permanent observer of the Arctic Council in 2013 and has focused on developing an Arctic policy strategyto grow its regional influence.

The Future of Arctic Resources

In exploring the future trajectory of geopolitics and resource competition in the Arctic, it’s crucial to anticipate two key factors. Firstly, the role of critical materials will significantly reshape economic and political rivalries. With the renewable energy transition becoming increasingly reliant on these minerals, heightened mining and exploration activities in the Arctic are inevitable. These minerals, pivotal in energy-related technologies like batteries, semiconductors, and solar panels, are abundant in the Arctic, making it a focal point for extraction. However, this resource race is not merely about economic gain—it’s influencing international political decisions and raising pressing environmental concerns, especially in the face of climate change’s impact on the region’s ecology.

Secondly, the looming prospect of a multipolar geopolitical struggle implies that nations like China and potentially India seek more significant influence in the Arctic. This growing interest has repercussions for Arctic Council members’ actions and relationships with other global actors. The competition for control over vital waterways, notably the Northwest Passage, could escalate tensions among nations vying for supremacy in this strategically significant region.

These geopolitical dynamics, coupled with the relentless pursuit of critical minerals and economic opportunities in the Arctic, are poised to define the overarching “race for resources” on an international scale.

Africa’s Critical Minerals: Shaping the Future of the Energy Transition

The Arctic Race for Resources Amidst Climate Concerns