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US overtakes China as top investor in Africa's critical minerals sector
The United States has quietly surpassed China as the largest foreign direct investor in Africa, pouring $7.8 billion into the continent in 2023 compared to China's $4 billion, according to data from the China Africa Research Initiative. This marks the first time since 2012 that the US has led in African investment, driven by a strategic push to secure critical minerals essential for technology, electric vehicles, and defense systems.
Strategic push to counter China's dominance
The US International Development Finance Corporation (DFC), established in 2019 under the Trump administration, has spearheaded this effort, explicitly framing its mission as a counter to China's influence in Africa. Beijing has long dominated the global supply chain for critical minerals-both through domestic reserves and foreign mining investments-while also controlling much of the processing infrastructure, raising concerns in Washington over potential export restrictions.
Africa's vast deposits of lithium, cobalt, rare earths, and tungsten have become a battleground in this economic rivalry. The US is now prioritizing partnerships with African firms to diversify its supply chains away from Chinese reliance.
Rwanda's Trinity Metals: A case study in US-backed supply chains
Rwandan mining company Trinity Metals exemplifies this shift. In 2023, it secured a $3.9 million DFC grant to expand its tin, tantalum, and tungsten mines. The company now exports tungsten and tin directly to Pennsylvania for processing, a move chairman Shawn McCormick insists was driven by market logic rather than US pressure.
"This was not the US government telling us to send tungsten to America. It's our decision as commercial players," McCormick said, emphasizing Trinity's adherence to ethical standards, including conflict-free sourcing and environmental responsibility.
Trinity, partly owned by the Rwandan government and Irish investor TechMet, highlights how African firms are navigating the US-China competition while aiming to meet global demand sustainably.
African nations urged to negotiate harder
Economists warn that African governments must assert their interests more aggressively. Sepo Haihambo, a former FNB Namibia executive, argues that countries should move beyond raw material exports, advocating for local processing, joint ventures, and sovereign wealth funds to reinvest mining revenues into education and healthcare.
"Africa needs to prepare for these engagements and be clear about what it wants," Haihambo said. "Expecting the US to negotiate on Africa's behalf is unrealistic."
US firm ReElement Africa is already acting on this vision, building a refinery in South Africa's Gauteng province to process minerals locally. CEO Ben Kincaid describes the project as a way to "capture more value, upskill labor, and lay the foundation for industrial development."
Trade tensions and missed opportunities
Critics argue the US has undermined its own position. Carnegie Mellon economist Lee Branstetter notes that Trump-era tariffs on African nations alienated potential partners at a time when dissatisfaction with Chinese investment-often accused of failing to benefit local populations-was growing.
"Indiscriminate tariffs hurt US leverage," Branstetter said. "Africa's frustration with China could have been an opening for the US."
Meanwhile, Sepo Haihambo predicts rising competition from Brazil, India, and Japan, further complicating Africa's balancing act between global powers.
What's next: A scramble for Africa's resources
The US-China rivalry in Africa is poised to intensify, with both nations vying for access to minerals critical to future technologies. For African countries, the challenge lies in leveraging this competition to secure better terms-whether through local processing, equity stakes, or reinvestment in domestic infrastructure-rather than remaining mere suppliers of raw materials.
