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OPINION AUGUST 01, 2025 | The Indian Eye 12

THE QUAD, AFRICA,

AND COMPETITION FOR

CRITICAL MINERALS

The Quad’s Critical Minerals Initiative is a timely response to the economic and strategic vulnerabilities
created by overdependence on dominant suppliers, most notably China

MOHANASAKTHIVEL J

n 1 July 2025, during the 10th
Quad Foreign Ministers’
OMeeting, the United States,
India, Japan and Australia jointly
announced the launch of the Quad
Critical Minerals Initiative, signalling
a commitment to securing and diver-
sifying global critical mineral supply
chains. As the initiative evolves, Af-
rica must be given due consideration.
Africa is home to nearly 30 per cent
of the world’s known lithium, co-
balt, graphite, and other rare earth
elements reserves. As the global de- Courtesy: IDSA
mand for these minerals is expected
to surge by more than 500 per cent by
2050, driven by the growth of electric global access. The resulting market dustrial and geopolitical strategy, ly turned to syndicated lending co-fi-
vehicles, renewable energy systems shock led to a steep price surge and with countries like the Democratic nancing arrangements involving mul-
and energy storage technologies, Af- triggered international concerns over Republic of Congo, Zambia, Zim- tiple international financial actors.
rica’s role becomes pivotal. China’s monopolistic control of the babwe, Guinea and Madagascar Approximately 80 per cent of China’s
The initiative also underscores rare earth supply chain. This episode forming key hubs in its global supply overseas mineral-related lending is
mounting anxiety over strategic vul- culminated in a legal challenge at the chain. What distinguishes China’s now syndicated, allowing risk-sharing
nerabilities stemming from excessive World Trade Organization (WTO), approach is the scale of its invest- and compliance with global environ-
dependence on China for mineral filed by the US, the European Union ments, the depth of financial integra- mental standards. A case in point is
processing and refining. In their joint (EU) and Japan. In 2014, the WTO tion and the long-term nature of its the Husab uranium mine in Namibia,
communiqué, the Quad members ruled against China, compelling it to mineral access mechanisms. where syndicated financing enabled
pointed to the threats of economic dismantle its export quotas and asso- China also employs legally bind- adherence to strict environmental
coercion, price manipulation and ciated taxes by 2015. ing offtake agreements to lock in regulations. While uranium is not
supply chain fragility, implicitly ref- Despite Africa’s vast geological predictable mineral flows. These classified as a critical mineral or rare
erencing Beijing’s prevailing domi- wealth, mining investment remains contracts commit buyers to purchase earth element, the project illustrates
nance in the critical minerals domain. limited due to high capital require- future mine production before ex- China’s broader risk diversification
These concerns are grounded ments, weak infrastructure, regula- traction, ensuring long-term access strategy in resource diplomacy.
in precedent. In 2010, China signifi- tory uncertainty and persistent per- to materials such as lithium, copper In addition to structural financ-
cantly tightened its rare earth min- ceptions of political risk. Africa only and graphite. In Zimbabwe, Huayou ing innovation, Chinese banks such
eral exports, slashing production by attracted 2.8 per cent of the US$ 17 Cobalt and Sinomine have embed- as the China Development Bank
25 per cent and export quotas by 37 billion in global specialist mining ded such clauses in lithium mining (CDB) and Export-Import Bank of
per cent. While these measures were capital. China, however, has system- deals, while similar provisions gov- China frequently offer concessional
justified on environmental grounds atically overcome these challenges ern graphite and nickel operations loans at below-market interest rates.
and as an effort to curb rampant through years of strategic engage- in Madagascar. These offtake agree- In Malawi and Guinea, these loans
illegal mining, they were widely in- ment, employing innovative financ- ments help China stabilise its indus- give Chinese firms a significant edge,
terpreted as strategic moves, partic- ing models such as limited-recourse trial input streams and limit compe- especially as Western financing re-
ularly against the backdrop of rising project finance, joint ventures and tition for key resources. mains risk-averse or is bogged down
tensions with Japan. The Chinese re- resource-for-infrastructure agree- Beijing has also moved to reduce in regulatory hurdles. Such loans are
stricted export permits only to firms ments. large-scale mineral projects’ financial usually bundled with Chinese con-
that met stringent environmental and Africa’s critical mineral reserves and environmental risks. Since 2020, tractors, engineers and equipment,
industrial standards, further limiting have become central to China’s in- Chinese institutions have increasing- Continued on next page... >>

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