Lobito corridor: US-China investments crucial for Africa's growth

Endowed with vast reserves of critical green transition minerals, Angola, Zambia, and the Democratic Republic of Congo (DRC) have gained global investment attention. The US and EU focus on the Lobito Corridor to secure mineral supply chains, while China aims to strengthen its presence through the Belt and Road Initiative (BRI).

Geopolitical competition aside, these developments open new collaboration avenues between the US and China and opportunities for Africa to unlock economic potential. Aligning the Lobito Corridor strategies with Africa’s green industrialisation will be key, emphasizing ESG-driven mining investments.

US and China Overlapping Lobito Moves

With a global critical minerals race underway, competition intensifies along Africa’s Lobito Corridor. China, Zambia, and Tanzania recently signed a memorandum for the $1 billion TAZARA railway restoration, linking Zambia’s copper mines to Tanzania’s Dar es Salaam port.

This counters Washington’s G7-led expansion of the Lobito Corridor railway from DRC and Zambia mines to the Tanzanian coast. Helaina Matza, the US lead for the G7’s Partnership for Global Infrastructure and Investment, emphasized the extension’s importance for exporting cobalt and copper critical for the green transition.

President Biden highlighted that the Lobito Corridor project is about creating sustainable infrastructure for lasting growth. China’s approach reflects similar principles, with rising cooperation in green energy and industrialisation.

The Lobito Corridor, attracting Chinese and Western investment, presents a unique opportunity for Africa to foster economic cooperation with global powers.

Responsible Mining Laying Sustainable Growth Groundwork

In the DRC, CMOC leads by expanding cobalt and copper production, aligning with President Xi Jinping's pledge to bolster mineral processing cooperation. CMOC aims to double copper output by 2028, driving progress with investments in its Tenke Fungurume Mine and Kisanfu Mine.

CMOC’s ESG approach led TFM to become the first African mine with Copper Mark certification for responsible mining, also achieving an 'AA' ESG rating from MSCI. It has partnered with Lualaba Power for renewable hydropower, enhancing clean operations.

The US-led strategy emphasizes ESG-based mining to attract Western investments into Lobito countries. The Minerals Security Partnership, involving the EU and others, plays a significant role. The US and EU have agreements with Zambia and DRC to develop regional EV battery value chains.

Increased economic diplomacy under the Biden administration and von der Leyen Commission encourages private investment in the minerals value chain, pivotal for clean industries and sustainable growth along the Lobito Corridor.

Linking Up and Unlocking Economic Potential

The US-led coalition and China have the chance to link their Lobito and TAZARA investments, creating Africa’s first East-West railway. Research from CSIS suggests potential economic benefits from this transcontinental corridor, aiding Angola, DRC, Zambia, and Tanzania.

Despite skepticism, connecting Lobito to TAZARA could expedite development and foster regional support from key actors like the African Union. With this railway, the region can harness its young population and mineral reserves to develop green industry value chains, driving sustainable export growth.

The US and China face a choice: reinforce divisions or jointly support Africa’s green industrialisation. Cooperation with regional organizations can align strategies and investments, transforming Africa’s mineral wealth into a global energy transition cornerstone.