“Africa’s critical minerals sector is experiencing a surge in foreign direct investment (“FDI”), driven by the global race to secure the raw materials essential for the energy transition.”

In this second article of our series looking at key trends in African critical minerals projects, we consider the role of foreign direct investment and geopolitical dynamics. The rest of the series is available here.

Africa’s critical minerals sector is experiencing a surge in foreign direct investment (“FDI”), driven by the global race to secure the raw materials essential for the energy transition. In 2024, FDI into Africa reached a record US$97bn, a 75% increase from the previous year.¹ Whilst this figure was boosted by mega-deals in Egypt, core investments in mining, infrastructure and renewables also rose significantly, reflecting growing investor confidence in the continent’s strategic relevance.

Diversifying Investment Sources

Historically, China has dominated Africa’s mining landscape through bilateral deals and state-owned enterprise expansion, particularly in cobalt, copper and lithium. Chinese firms control or hold stakes in 15 of the 19 cobalt-producing mines in the DRC and have invested over US$21bn in African mineral projects under the Belt and Road Initiative.² However, this dominance is now being challenged by a wave of counter-investments from the United States and European Union via multilateral frameworks, and increasingly, the Gulf States:

the US Minerals Security Partnership (“MSP”) and Critical Minerals Task Force aim to de-risk investments and promote ESG-aligned supply chains. The US DFC has committed over US$1bn to projects like the Lobito Corridor;³
the EU is leveraging its Critical Raw Materials Act to forge strategic partnerships with African countries, focussing on traceability, sustainability and local beneficiation;⁴ and
Gulf States part of the Gulf Cooperation Council (“GCC”) – namely the UAE, Saudi Arabia, Qatar, Oman, Bahrain and Kuwait – have emerged as major players in the critical minerals sector. In 2023, GCC countries invested over US$53bn in African energy projects.⁵ Their strategies include infrastructure-for-minerals swaps, corridor development and equity stakes in copper and cobalt mines. Much of this investment is channelled through sovereign wealth funds, such as Saudi Arabia’s Public Investment Fund and the UAE’s Mubadala, which favour long-term partnerships and joint ventures over extractive models, positioning Gulf states as pragmatic, commercially driven partners with fewer political conditions.⁶

Strategic Leverage and Policy Shifts