What's Happening?
Saudi Arabia and the UAE are strategically shifting their focus from gold to critical minerals, particularly copper, sourced from the Democratic Republic of Congo (DRC). This move is facilitated through a joint venture between state miner Gécamines and commodity
trader Mercuria, which will supply 50,000 tons of copper cathode. This shift is part of a broader strategy by Gulf states to diversify their investments in Africa's mining sector, moving beyond traditional markets like China. The demand for copper and other strategic minerals is driven by the needs of AI, electrification, and energy transition goals. Gulf investors are increasingly involved in mining, processing, and logistics, aiming to create local value and infrastructure development in Africa.
Why It's Important?
The pivot from gold to critical minerals by Gulf states signifies a major shift in global industrial supply chains. By investing in Africa's mining sector, Saudi Arabia and the UAE are securing essential materials for future industries, reducing reliance on single markets, and supporting local industrial development. This move enhances Africa's pricing power and capital flows, potentially leading to more resilient mining companies. For the U.S., this development could impact its strategic interests in Africa, as it competes with China and now the Gulf states for influence over critical mineral resources.
What's Next?
The Gulf states are expected to continue expanding their investments in Africa's mining sector, focusing on localizing the critical minerals value chain. This includes developing infrastructure, trading, and processing capabilities. The UAE's NG9 Holding is already working on an integrated copper-cobalt refinery in the DRC, which will support local value addition. Additionally, strategic logistics investments, such as the AD Ports Group's operations in Angola, are set to facilitate the movement of minerals to global markets. These developments could lead to increased competition among global powers for Africa's mineral resources.
