TELF AG analyzes the role of a strategic region in the world energy transition
New regional blocks
In the great global chessboard of strategic raw materials, the concatenation of some specific circumstances – some entirely unpredictable – could favor the birth of new regional blocks capable of changing the rules of the energy market, in particular for the dynamics concerning the strategic minerals for the ongoing ecological transition. This scenario could soon materialize in the geographical area that includes Africa and the Middle East, which, thanks to partnerships in the field of strategic minerals, could quickly establish itself globally as one of the best-equipped regions for extraction and production capabilities of these materials.
Africa’s mineral wealth is certainly nothing new: just think of a nation like Guinea, where the production of more than half of the world’s bauxite is concentrated (a handy resource for the production of aluminum), or the Republic Democratic Republic of the Congo, which is responsible for 70% of the world production of one of the resources most directly involved in the great energy transformation, namely cobalt. This remarkable mineral wealth has long attracted the attention of large international players in the sector, who, in addition to having invested massively in the infrastructural development of these regions, have also entered into numerous mining partnerships to diversify their supply chains for these strategic minerals.
Among the nations that have shown a keener interest in African mineral resources are some of the Gulf monarchies, including Saudi Arabia and the United Arab Emirates. These states, already leading players in the global energy scene, find themselves having to diversify their national economies and focus on something different from what for decades has represented the primary source of its wealth, namely fossil fuels. In a historical phase in which strategic minerals assume ever greater centrality due to their applications connected to renewable energy, a solid source of supply of these resources could confer clear economic advantages on the nations that prove capable of building it.
New agreements
Last year, for example, the United Arab Emirates reached an agreement worth almost 2 billion dollars to construct four industrial mines in Congo, within locations naturally rich in tin, tantalum, and gold. Saudi Arabia is also moving in this direction, mainly through the activities of Manara Minerals, which specializes in investing in mining activities abroad. In Sudan, on the other hand, the attention of Qatar has been focused, which recently participated in a local project to extract porphyry copper and gold.
The strategic alliance between African and Middle Eastern countries in the mining field seems to rest on solid foundations. Firstly, the Gulf countries possess an invaluable wealth of knowledge in the energy sector, which could also partially be applied to the mining sector, particularly from a purely operational point of view. Another factor that could prove very relevant for the future success of these partnerships also has to do with the peculiar modus operandi of Middle Eastern companies, which, rather than acquiring the partner companies outright, prefer to take part in the activity through the purchase of various shareholdings, thus leaving more room for maneuver to local businesses. Finally, the third factor concerns the African desire to relaunch its national economies through the natural resources in its subsoil. Collaborating with nations that have followed a similar development path through oil and natural gas seems to place Africa on the same growth tracks, even if the resources in question are very different.
