Intensifying US-China Supply Chain Competition Over Africa's Critical Minerals

Executive Summary

The convergence of the Nigerien military junta's nationalization of uranium and the announcement of a large-scale U.S. mineral investment program has pushed US-China competition over Africa's critical minerals into a new phase. A scenario of entrenched parallel competition—characterized by prolonged international arbitration in Niger, delays in the implementation of the U.S. program relative to its announcements, and China's continued pragmatic expansion—is assessed as the most likely, with a 55% probability. China's structural advantage, consolidated in the refining and processing stages, is not expected to be significantly challenged in the next 3-5 years, while the U.S. subsidy-focused policy fails to address the structural limitations in attracting private capital. South Korean companies should adopt a dual strategy of utilizing China's refining networks while also entering U.S. security-linked supply chains, rather than betting early on a single side. It is rational to first build a track record in commercial projects with lower nationalization risks, such as cobalt, copper, and lithium, rather than uranium. A selective approach is required, using the outcome of the Nigerien international arbitration and the actual timing of U.S. capital deployment as leading indicators to calibrate market entry.

I. Situational Analysis

Intensifying US-China Supply Chain Competition Over Africa's Critical Minerals: A Situational Analysis

1. Background and Developments

The African continent holds approximately one-third of the mineral resources essential for the energy transition, semiconductors, and defense industries [8]. Cobalt, manganese, lithium, and uranium are prime examples [8]. For a long time, Africa remained a bystander in the great power competition over these resources [8]. Recently, however, various African governments have begun to leverage their resources to recalibrate their geopolitical bargaining power [8].

Niger is a case in point. Since the 2023 coup, the military junta led by General Abdourahamane Tchiani has progressively tightened state control over the uranium industry. On August 21, Niger's Council of Ministers granted the operating rights for the In-Azaoua mining site near Arlit in the Agadez region to the state-owned Téloua Safety and Uranium Mining Company (Tsumco) [1]. This site had previously been operated by Somaïr, a company in which France's Orano held a 63.4% stake and Niger's state-owned Sopamin held 36.6% [1]. The Niamey government is accelerating its mining sovereignty policy by successively reassigning mining permits previously held by Orano and GoviEx to state-owned enterprises [14]. The problem is that these actions are being taken while several international arbitration proceedings are underway [14]. In effect, Orano's monopoly structure over Nigerien uranium, which dates back to the French colonial era, is being directly challenged under the military junta.

The U.S. response has taken more concrete shape since the start of the Trump administration. On July 23, the Trump administration launched a $500 million program to support strategic mineral projects in sub-Saharan Africa [5]. The program's key pillars are exploration, refining, infrastructure, geological data, and local capacity building [5]. Subsequently, on August 20, the U.S. Department of Energy announced a separate allocation of $500 million to seven projects aimed at expanding critical mineral and battery supply chains [4]. Although the two programs have different names and are managed by different departments, their timing overlaps, reflecting a broader trend of the U.S. government defining Africa's resources as national security assets.

2. Current Situation

The Brazzaville-based media outlet Adiac commented on the U.S. program, stating that "the global battle for critical minerals has entered a new phase" [5]. From a local African perspective, this announcement is perceived as a belated U.S. response to China's existing dominance. Indeed, a previous EAI analysis pointed out that in the Democratic Republic of Congo's (DRC) cobalt supply chain, "the United States has announced investments totaling $3 billion through separate initiatives by the Departments of State, Defense, and Energy to counter China's dominance in refining, but the actual pace of private capital deployment has not matched these announcements" [2]. A similar pattern is likely to repeat across the African continent. The time lag between announced funding and actual disbursement remains a structural weakness of U.S. programs.

In Tanzania, the uranium industry is entering a new phase. The Dar es Salaam-based Daily News noted that while Tanzania has possessed significant uranium reserves for decades, it has not yet reached industrial-scale production, reporting that 2026 is becoming a turning point in this trend [10]. The Citizen also reported that alongside progress in exploration, trial processing runs, and advancements in major projects, nuclear power is gaining prominence in Tanzania's long-term energy plan [12]. For the Tanzanian government, uranium is emerging as a strategic asset linked to the introduction of its own nuclear power plants, not just a raw material for export.

In Morocco, the U.S. Trade and Development Agency (USTDA) has identified energy, critical minerals, digital infrastructure, and transportation as four priority areas for cooperation [15]. Gretchen Krantz-Evans, USTDA's Regional Director for the Middle East and North Africa, stated that these sectors will be the future pillars of U.S.-Morocco cooperation [15]. As a country with its own resource base, including phosphates, Morocco appears to be positioning itself as a relatively stable partner in the U.S. supply chain diversification strategy.

3. Key Actors and Interests

The Nigerien military junta aims to simultaneously secure revenue through uranium and strengthen its political legitimacy. The Tchiani government is using the dismantlement of Orano's dominant structure, a legacy of French colonialism, as a narrative of restoring external sovereignty [1][14]. However, it faces legal risks as international arbitration proceedings are ongoing.

Orano (France) is in direct conflict with the Nigerien government, asserting the legal validity of its existing contracts based on its 63.4% stake in Somaïr [1]. GoviEx is a party to a similar dispute [1][14]. Both companies face a situation where the extent of their asset losses will be determined by the outcomes of future international arbitrations.

The U.S. government is employing a multi-department parallel strategy, with the Departments of State, Defense, and Energy each approaching African minerals with different budgets and justifications [2][4][5]. This approach is less a unified national strategy and more a manifestation of the Trump administration's security and trade agendas being implemented on a departmental basis. The problem of implementation speed failing to match the scale of announcements is a pattern already confirmed in the DRC case [2][6].

China has pursued a pragmatic expansion strategy at the level of provincial governments, such as Hunan, and state-owned or private enterprises, rather than making large-scale declarations at the central government level [2]. At copper and cobalt mining sites in Zambia, environmental controversies surrounding Chinese capital are persistent. This represents a structural vulnerability in China's approach to Africa and a potential factor that could shift local public opinion toward anti-China sentiment.

The Tanzanian government is formulating a strategy to utilize uranium dually as both an export commodity and fuel for its nuclear power plants [10][12]. This can be seen as a move to secure individual bargaining power with both the U.S. and China in the process of selecting international nuclear cooperation partners.

4. Key Issues

The first issue is whether the nationalization trend originating in Niger will spread to other resource-rich nations. The outcome of the international arbitration in Niamey could alter the incentives for resource nationalization in other junta-led countries like Mali and Burkina Faso.

The second issue is the practical implementation capacity of the U.S. program. As a previous EAI analysis pointed out, "U.S. and European policies to restructure critical mineral supply chains have proceeded by injecting subsidies and loans without resolving the structural factors that deter private capital" [6]. Whether the $500 million program can overcome this limitation will be a key point to watch over the next one to two years.

The third issue is whether China's provincial government and enterprise-level approach will remain effective. If local backlash, such as the environmental controversies in Zambia, accumulates, China's model of pragmatic expansion could incur political costs.

The fourth issue is the method by which African resource nations secure their bargaining power. Just as the DRC established its own negotiating leverage with an export ban on raw ore [2], countries like Niger, Tanzania, and Zambia may also seek a third way that avoids subordination to either the U.S. or China. For third-country companies, including those from South Korea, this could translate into a tangible opportunity to establish separate bilateral channels with these resource nations.

II. In-Depth Analysis

Intensifying US-China Supply Chain Competition Over Africa's Critical Minerals: An In-Depth Analysis

1. Analysis of Root Causes

The starting point of this competition is not a geological accident. It is the result of China preemptively dominating the refining and processing stages over the past two decades. The case of DRC cobalt serves as the prototype. This is illustrated by the fact that "the concentration of cobalt reserves and production networks in the hands of Chinese companies over the past two decades is the starting point for the U.S. mineral strategy toward Africa" [2]. The key point is that China has consolidated a structural advantage not at the mining stage, but at the refining stage.

The belated U.S. response has inherent flaws in policy execution. A previous EAI analysis points out that "U.S. and European policies to restructure critical mineral supply chains have proceeded by injecting subsidies and loans without resolving the structural factors that deter private capital" [6]. The fact that the $500 million program for sub-Saharan Africa [5] and the Department of Energy's $500 million allocation [4] were announced around the same time is an extension of this structure. The approach of having the Department of State, the Department of Energy, and the DFC announce funds through separate channels is more an accumulation of departmental responses than a coordinated national strategy.

Niger's nationalization has a different set of root causes. Since the 2023 coup, the Tchiani military junta has used a narrative of resource sovereignty to secure its legitimacy. The move to dismantle Orano's monopoly structure, a legacy of the French colonial era, is intertwined with the junta's internal political needs. The very structure of Somaïr's ownership, with Orano holding 63.4% and the state-owned Sopamin 36.6% [1], has been defined by the junta as a target for liquidation.

2. Structural Context

At the political level, most governments of African resource nations are either military juntas or rest on fragile political legitimacy. Just as the Nigerien junta uses uranium nationalization as a means to secure legitimacy, the DRC government attempts to build "independent bargaining power not subordinate to either the U.S. or China" through a ban on raw ore exports [2]. This signals that resource nations are shifting from being objects of great power competition to active negotiating subjects. As Le Monde has pointed out, Africa is moving beyond its position as a "spectator in a structural confrontation" and entering a phase of recalibrating the geopolitical balance of power by leveraging its resources [8].

At the economic level, a structure exists where the gap in comparative advantage at the refining and processing stages is not easily closed. Even G7-level analysis concludes that "China's comparative advantage in the refining and processing stages is unlikely to be significantly shaken in the next 3-5 years" [13]. This is because despite years of subsidies from the U.S. and Europe, "the problem of capital outflow due to wage gaps and differences in environmental regulations has not been resolved" [13]. The ongoing environmental controversies surrounding Chinese capital in Zambia's copper and cobalt mining are one facet of this gap. The structure in which the party with lower environmental costs gains a profitability advantage remains intact.

At the security level, uranium operates under a separate logic. While cobalt and lithium are driven by demand for batteries and the energy transition, uranium is directly linked to demand for defense and nuclear fuel. The fact that Nigerien uranium was a key pillar of France's nuclear fuel supply chain makes it impossible to categorize this nationalization as simple resource nationalism. The fact that Tanzania's uranium industry is undergoing a complex transformation involving "progress in exploration, trial processing runs, advancements in major projects, and the rise of nuclear power within its long-term energy plan" [12] also shows that uranium is emerging as a separate axis for restructuring security-related supply chains.

3. Historical Precedents and Comparative Cases

The case of Niger follows a recurring pattern of resource nationalism. It is not fundamentally different from the wave of resource nationalizations in the 1970s. What is different this time is that the government is pressing ahead with unilateral action while international arbitration proceedings are ongoing. The French media outlet Jeune Afrique pointed out that Niamey is taking control of its uranium "despite the risks of international arbitration" [14]. The fact that the reassignment of permits held by Orano and GoviEx to two state-owned enterprises is happening "while several arbitration proceedings are still ongoing" shows that the move carries international legal risks [14].

A comparison with the case of Australia is also relevant. Australia has adopted a strategy to "expand the AUKUS-centered Indo-Pacific security network into critical minerals cooperation in response to China's rare earth export controls" [11]. However, this strategy has also run into the "structural constraint of rising costs associated with clean production" [11]. The program the U.S. is promoting in Africa is highly likely to face a similar cost structure problem. The question of who will bear the cost of building new refining infrastructure remains the same, whether in Australia or Africa.

The case of Brazil offers another cautionary tale. There are reports that two critical minerals cooperation proposals from the U.S. to Brazil have received no response from Brasília [17]. The fact that a U.S. diplomat noted Brazil's non-response "with China looming in the background" [17] shows that resource nations have little incentive to react urgently to U.S. proposals. African resource governments are also likely to adopt a similar wait-and-see attitude toward the U.S. $500 million program, as the precedent of announced funds not translating into actual disbursement has been repeated.

4. Key Variables Shaping Developments

The first variable is the outcome of the international arbitration in Niger. Depending on the results of the proceedings initiated by Orano and GoviEx, the incentive for nationalization in other African resource countries could be either strengthened or suppressed. If the arbitration outcome is unfavorable to the Nigerien government, the pace of resource nationalism's spread may slow. Conversely, if Niger successfully carries out nationalization without substantial losses, the possibility of similar measures spreading to other uranium and lithium producing countries cannot be ruled out.

The second variable is the actual pace of capital deployment for the U.S. program. The key is when and in which projects the $500 million from the State Department [5] and the $500 million from the Department of Energy [4] are actually disbursed. If the pattern from the DRC cobalt case, where "the actual pace of private capital deployment has not matched these announcements" [2], is repeated, the credibility of the U.S. among African resource governments will remain low.

The third variable is China's response. China has a history of increasing trade and mining investment in Africa through "pragmatic expansion at the level of provincial governments, such as Hunan, and state-owned or private enterprises," rather than through declarative responses at the central government level [2]. This approach is more effective at reducing friction with local governments in resource countries than the U.S. announcement-centric approach. A future point to observe is how much the environmental controversies arising in Zambia will increase the costs of this pragmatic expansion model.

The fourth variable is whether uranium and other minerals will follow separate trajectories. As uranium is directly linked to defense and nuclear supply chains, the U.S. and France have a greater incentive to intervene more actively than they do with cobalt and lithium. It is highly likely that the restructuring of the uranium industry in Niger and Tanzania will proceed at a different pace and with a different set of actors than the competition over cobalt and copper supply chains. This divergence will provide a basis for different African resource nations to differentiate their negotiating strategies.