Executive summary
- African governments are increasingly restricting raw mineral exports to build domestic processing industries, creating an urgent need for the EU to adapt its strategy
- Current EU policy prioritises processing within Europe and offers insufficient financial protection to companies undertaking projects in Africa
- The EU should establish a Critical Minerals Fund, jointly implemented by the European Investment Bank and the African Development Bank Group, to finance European and African joint ventures
Introduction
An increasing number of African countries have placed restrictions on the export of raw minerals, attempting to develop the ability to process them domestically and increase their value before they are shipped elsewhere. The European Union has not been able to adapt with promptness, and it is getting increasingly pushed out of a supply chain that it has struggled to break into. Its policies prioritise mining and processing within the EU, while European companies receive too little financial protection to undertake expensive and risky projects in African countries. This weakens Europe’s access to mineral supplies and sets itself up for failure vis-à-vis its main competitor, China, which devotes instead extensive state-backed financing to African projects.
Analysis
This February, Zimbabwe banned all lithium concentrate exports (concentrate being one of the first steps of mineral enrichment), following an earlier 2022 ban on the export of lithium ore. Zimbabwe holds among Africa’s largest reserves of this mineral (US Geological Survey, 2025). Similarly, the Democratic Republic of Congo, with the world’s largest reserves of cobalt and Africa’s largest of copper, banned the export of cobalt and copper concentrate (US Geological Survey, 2025). Guinea, the world’s largest producer of bauxite, has revoked foreign companies’ concessions after they failed to build local refineries (US Geological Survey, 2025). Alongside these, Mozambique, Gabon, Namibia, Tanzania, Uganda, Ghana and Nigeria have also imposed export controls (IEA, 2026).
At present, the European Union and African partners seem misaligned on their core strategic objectives. African countries are looking into increasing the value of their exports and derive more revenue from their natural wealth, while Europe aims at increasing mineral processing within its borders. The 2024 Critical Raw Materials Act (CRMA) established that by 2030 at least 40% of the EU’s strategic raw materials must be processed within the EU. While there is a clause in the Act which recognises the need for value addition in emerging partner countries, there is no specific mandate. The EU’s priorities therefore lie in enhancing its own capabilities in order to reduce dependency on any other partner (Hache & Normand, 2024), but this will prove very challenging given that its current capabilities are virtually nonexistent (Nobletz et al., 2024) and African countries are asking for refining to take place locally. With this in mind, the EU will soon have to deal with the fact that at present it cannot fully offer its African partners what they demand. This may be dangerous as many critical minerals essential for technological development and for the green transition, such as cobalt, lithium, graphite, copper and rare earths, are present in the continent. Additionally, the country that the EU considers as its biggest competitor, China, is proving considerably more flexible.
Despite the EU’s de-risking ambitions, acquiring considerable autonomy vis-à-vis China is not looking likely. Over the last decades, China has consolidated a near-monopoly on intermediate refining. Between 2000 and 2021 Chinese state-owned banks committed nearly $57 billion for overseas mineral extraction and processing in low- and middle-income countries (Escobar et al, 2025). The money has been overwhelmingly lent to Chinese-owned ventures or subsidiaries (Vlahčević Lisinski, 2025). The extent of public financing received makes Chinese companies highly risk-taking and allows them to sustain losses over many years or to absorb the risks of building heavy processing plants in unstable regions (Nantulya, 2025). Additionally, China is also building African infrastructure at a stunning pace, as one in three infrastructure projects are built by Chinese companies (Labuschagne & Marais, 2019). Additionally, chemical refining is a very energy-intense process, and Africa’s energy infrastructure is severely lacking. In response, China is now providing around 20% of Sub-Saharan Africa’s total generation capacity (Adjei, 2025). It is not surprising then that Chinese companies were able to adapt quickly to new raw materials export bans, committing hundreds of millions of dollars to expand existing facilities to take on more advanced refining (NTU-SBF Centre for African Studies, 2026). Chinese presence is prevalent in the African continent and it possesses such a large technological and manufacturing advantage in the critical minerals supply chain that, unless the EU drastically restructures its investment model, will make de-risking harder to achieve.
As a result of the CRMA’s emphasis on domestic processing, the majority of strategic projects designated in the Act are within the EU (Barata da Rocha, 2026). This is despite the fact that processing is very energy intensive, and energy prices in Europe are considerably higher than in other parts of the world. Additionally, domestic projects could also encounter environmental or social costs, as demonstrated by the large protests in Serbia over the environmental damages that a lithium mine would have inflicted on the territory. The mine is one of Europe’s largest reserves of lithium, and also a CRMA strategic project (Santos, 2024). Besides, a baseline structural factor of the critical minerals supply chain is concentrated supply, with a large share of global production coming from a small number of countries. This increases the risk for disruption and bottleneck formation (Vandome, 2024). Although the CRMA establishes only a 40% target for domestic processing, implicitly recognising that the majority will be processed abroad, the fact that there is no article that establishes benchmarks for non-EU activities highlights Europe’s misplacement of the bulk of its attention. By concentrating policy support on a costly domestic segment, the EU risks underinvesting in the overseas capacity on which most of its supply will continue to depend.
Another weak point is that critical minerals projects depend mainly on voluntary private sector engagement, which encourages a risk-averse behaviour on the side of companies and falls short of political expectations. Of the five African strategic projects with critical raw materials chapters, only one concerns refining, while the others focus on mineral extraction (Barata da Rocha, 2026). This imbalance reflects the absence of sufficient European finance for the capital-intensive processing facilities that African governments seek. The CRMA provides no dedicated funding, and the Global Gateway simply repackages existing instruments, much of whose funding had already been allocated when the Act entered into force (Schulze, 2026). Not only China, but Japan (Terazawa, 2023), Gulf countries (Schulze & Schrolle, 2024) and the United States (Baskaran & Schwartz, 2026) all deploy substantial public funds to secure critical raw materials and provide companies with protection against commercial risks. Private investors face volatile commodity prices, severe infrastructure deficits and politically unstable host countries (B20 South Africa, 2025), all of which discourage them from investing in Africa and place EU’s de-risking strategy at a disadvantage from the get-go. Its competitors, China above all, give companies some protection to absorb early risks through public guarantees. On the other hand, European companies make a different cost-benefit analysis and are more likely to avoid uncertain markets altogether rather than committing to long investment horizons.
Policy recommendations
Critical minerals are not only found in Africa, as Latin America and Central Asia are also very rich in these materials. This policy brief chose to focus on the African continent because it is a very promising partner, given the wealthy amount of critical minerals these countries hold and African governments’ need and desire for investment. However, the EU is at present misplacing its attention by prioritising domestic projects, and it is cutting itself out of the African critical minerals market with insufficient incentives and protections for its businesses.
To address these limitations, the EU should establish a dedicated Critical Minerals Fund for the creation of mineral industrial hubs in Africa. In order to coordinate European and African needs and priorities, the fund should support European and African joint ventures that invest in critical raw materials. African equity participation would give host countries the chance to tackle their industrial priorities and give local actors influence over investment and employment, as well as provide relationships with local authorities or suppliers. The fund would be established by the European Investment Bank, but a historic step would be for the fund to be implemented in partnership with the African Development Bank Group. The institutions would develop a common project pipeline and provide coordinated financing. Together, these arrangements would embed African participation both in the overall investment pipeline and within each venture. This would show that the EU takes its interlocutor seriously instead of superimposing its priorities onto others and give African partners a reason to choose the EU over its competitors.
Each mineral industrial hub would combine extraction, chemical processing and supporting infrastructure within one coordinated project. This could include a mine, a refinery and rail links, logistic facilities, electricity generation, etc. Bundling these elements together reduces the risk that a refinery is without sufficient power or transport capacity, and it would also lower unit costs and avoid several companies duplicating the same facilities. This would make selected projects more predictable and scalable.
This proposal is ambitious and departs from the EU’s current trajectory. Its scale should therefore be managed through phased implementation. The Fund could begin with one or two pilot hubs where mineral deposits, government support and transport links provide favourable conditions, including along the Lobito Corridor. The EIB and African Development Bank could pool resources for project preparation, while the next EU multiannual budget, coming up in 2028, creates a dedicated funding allocation. Financing should be released in stages against clear construction, governance and local value-addition milestones, limiting public exposure if a project underperforms.
Reference list
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