Middle Eastern Interest in Africa’s Minerals Sparks Global Investment Competition

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The growing interest of Saudi Arabia and the UAE in Africa’s mineral wealth, following China’s extensive investments over the past decade, is reshaping the dynamics of global mineral exploration. This shift has put major Western mining companies in a challenging position due to increased risk aversion among board members. The competition for attracting capital to advance crucial projects in copper, cobalt, nickel, and lithium across Africa will be a focal point at the annual African Mining Indaba in Cape Town.

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Unlike China and Middle Eastern state-backed funds, Western miners face hurdles in convincing boards concerned about shareholder alignment. Negotiations for potential deals, particularly in the Democratic Republic of Congo, a major cobalt and copper source, are encountering delays in the boardrooms of companies such as Rio Tinto and BHP Group. Board members are cautious, considering shareholder emphasis on ESG concerns and past scandals in high-risk countries.

While Africa’s mineral reserves are pivotal for transitioning to cleaner energy, challenges like political instability, corruption, and inadequate infrastructure add complexity. Western mining giants like Rio Tinto and BHP are exploring partnerships, such as with Ivanhoe Mines in Congo, to tap into rich copper deposits. However, smaller explorers in Angola, Malawi, Rwanda, Tanzania, and Zambia attract backing from these majors, who are avoiding larger deals to mitigate rising costs.

The increased demand for critical minerals essential for the green transition, particularly in Africa’s copperbelt, is inflating acquisition costs. Oil-rich nations like Saudi Arabia and the UAE, with robust financial capabilities, emerge as potential risk-takers. However, Western companies face additional challenges in jurisdictions previously considered safer, like Latin America, where adverse conditions and regulatory hurdles threaten mining projects.

Chinese miners, having strengthened their presence in Congo and expanded investments throughout Africa, pose formidable competition. The Middle East, especially Saudi Arabia and the UAE, is seen as a potential funding source for Africa’s mining projects. Notably, Saudi Arabia, characterized as a “neutral player with a big wallet,” and the UAE could play a pivotal role in shaping a comprehensive mineral strategy stretching from Asia to Southern Africa. The evolving landscape underscores the complex geopolitical dynamics influencing global mineral exploration and investment.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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