ACCRA: The United States is using offtake deals and state-backed funding to compete with China in the short term to secure supplies of African copper, cobalt and other critical minerals, diplomats, executives and analysts said ahead of this week’s Indaba. Washington is focused on Zambia, Guinea and the Democratic Republic of Congo. The latter accounts for more than 70% of global cobalt supplies and produced around 3.3 million tonnes of copper in 2024. But instead of placing American operators in high-risk countries, the United States is leaning toward offtake and other deal structures to drive output into monopolistic U.S.-aligned value chains, such as the deal with Mercuria and the arrangement with Congolese state-run mining company Gecumins. By Chinese refiners.
Offtake is when a country or company secures the rights to a portion of a mine’s output in exchange for a loan or other support.
“We’re already seeing mineral flows out of Africa reshaped with U.S. involvement,” Thomas Scarfield, a senior analyst at the nonprofit NRGI, said ahead of the South African event.
“The US is putting money behind its rhetoric, but it remains to be seen whether it can match China’s size and speed,” Scarfield added. The US and China are expected to seek new commitments at the Indaba mining event in Cape Town this week, where the US will sound out stakeholders in the mineral bloc. At the center of this change is Jecummins, which is preparing to ship around 100,000 tonnes of Tenke Fangourme copper allocation to US buyers this year after gaining broader marketing rights in a renegotiation with China’s CMOC in 2023.
“Economic firepower rather than industrial presence”
America’s strategy goes beyond copper. Xiao Wenhao, an analyst at Shanghai Metals Markets, said China’s cobalt supply chain also faces risks as Congo’s export restrictions clash with expanding cooperation between the United States and the Democratic Republic of Congo. London-based Pensana has scrapped plans to build a rare earths smelter in Britain to process feedstock from Angolan mines and moved the project to the United States, citing stronger American incentives and price guarantees.
“This is the US deploying financial firepower rather than industrial presence,” said Vincent Rougier, an analyst at Control Risks. “The offtake and trade route allows Washington to route Congolese copper to U.S. buyers without the political and operational risks of operating a mine in the Democratic Republic of the Congo.”
Chinese companies still control many of Congo’s biggest copper and cobalt assets, including Tenke Fangourmet and Kamoa Kakula, and have been sending most production to China for refining for more than a decade. Beyond copper and cobalt, Congo is emerging as a supplier of zinc, germanium and gallium.
The new offtake agreement establishes Gecumines as a major exporter of zinc and a major buyer of germanium and gallium concentrate, with the company recently recording its first export of locally processed germanium.
China vs. the West
The contrast in capital deployment remains stark.
Kobold Metals, which has stakes in more than 3,000 square kilometers of land in the lithium and copper belt, is underscoring governance standards and will not proceed with projects embroiled in conflict, Benjamin Kabuka, the company’s Congolese representative, told Reuters.
In contrast, Chinese carriers are forging ahead in a highly competitive field and strengthening their speed-to-market advantage. At Manono, one of the world’s largest undeveloped lithium deposits, KoBold said Zijin will not move until the ownership issue is resolved, even as Zijin continues to improve infrastructure in the northern block.
If the southern block can be secured, production could begin within three years, KoBold said. In Guinea, the winning Chinese-backed consortium Simandou pushed ahead with the construction of a railway and port in giant Simandou, despite ownership disputes, effectively bringing Rio Tinto into line. (Reporting by Maxwell Akaraale Adombila; Editing by Pratima Desai and Alexander Smith)
