“Although mining is a long-term business, very few companies do prospective studies” deplores VIRCOULON

As global demand for critical minerals accelerates, Central Africa finds itself once again at the heart of an extractive race—this time driven by the energy transition. Thierry Vircoulon, Associate Research Fellow at IFRI and Coordinator of its Observatory of Central and Southern Africa, shares a sharp and sobering perspective. Speaking ahead of the ESSEC Institute for Geopolitics & Business webinar “Securing Critical Minerals” (2 July), he explores the paradoxes of resource governance, the rise of China, and why “clean energy” still runs on dirty politics. A must-read for those navigating the fault lines of global supply chains.

Thierry VIRCOULON

In Central Africa, critical minerals are a curse before they are a blessing. What makes this region the epicenter of a new extractive race?

The Central Africa region is mineral-rich but still largely unexplored. The Copperbelt, a geological area covering Zambia, part of Zimbabwe and southern Congo, is the historical mining area. That’s where industrial mining has been developed for colonial times. Copper and cobalt are so abundant in this area that the DRC is now the first producer of cobalt and the second producer of copper in the world. In addition to this historical mining area, gold and tin are abundant in the Great Lakes. The new extractive race is about the critical minerals and only a small part of the Central Africa mineral reserves has been industrially exploited.

The world wants “clean” energy—but often sources it through “dirty” politics. How do we break this cycle of resource hypocrisy in Africa?

For the past 20 years, there has been a lot of work to define good mining governance. The principles of mining good governance are well known: contract transparency, environment friendly mining techniques, traceability, local content for subcontracting, local transformation, local employment, civil society monitoring, etc. But implementing these principles remains very problematic. In most African countries, the conditions for implementation are not yet met and, from a business perspective, good governance costs more.

How do China, Russia, and Gulf States reshape the governance of mineral wealth in fragile States—and where do Western actors still matter?

In the African mining sector, China, Russia and Gulf states do not play in the same category. Chinese mining companies are playing a prominent role while Russia and Gulf states companies are minor investors. Gulf states companies are the newcomers while Russian companies are disinvesting. The western companies’ historical advantage has been seriously eroded by the Chinese competition (Zambia, DRC, Guinea, etc.) but the African governments now worry about China’s control of their mining sector. In the DRC and Guinea, they try to renegotiate the Chinese contracts.

Could African countries use their position to negotiate better terms—via regional blocs, national strategies, or company-level resistance?

When they realize that the market price is up and international competition is fierce, the African governments usually try to get more money. They usually talk about resource nationalism and use fiscal changes, contract renegotiations, export bans, expropriations, etc. The African governments own the mining rights, so they have a strong leverage over the mining companies. The problem is not whether they can negotiate better terms or not but who benefits from the mining rent…

Is there any credible pathway to processing or value-added production on the continent—or will Africa remain a supplier of raw materials?

Of course, the African governments all want to transform minerals and get more value. But industrialization is a long process as the South Africa economic history demonstrates. It requires several elements (qualified workforce, low-cost energy, long-term demand, etc.). The most likely economic scenario is that negative specialization of African countries as suppliers of raw materials will continue with some local pockets of industrial activities. In addition, the industrialization process will be made possible by foreign investment, so in its initial phase the industrialization will increase economic dependence.

What risks should companies and investors factor in when operating in this high-stakes geopolitical environment—beyond the usual “country risk” matrix?

In addition to the usual issues (domestic political change, geopolitical troubles and security), the companies and investors should think about the dynamics of their business relations in the host country and their exit strategies. Although mining is a long-term business, very few companies do prospective studies. And when they do, they only try to identify future problems and threats. They do not anticipate how their economic activity will change the local and national (sometimes regional) balance of power in the long run. In addition, it is also important to exit gracefully.

ABOUT THIERREY VIRCOULON

Thierry Vircoulon is an independent consultant and has been affiliated with Ifri (the French Institute of International Relations) since 2006. He coordinates Ifri’s Observatory of Central and Southern Africa and collaborates with the Global Initiative against Transnational Organized Crime (South Africa). For the past 20 years, his work has focused on conflicts, security issues, and governance in Africa. He is the author of several books on South Africa and the Democratic Republic of Congo.

A graduate of the École Nationale d’Administration and the Sorbonne, Thierry Vircoulon has taught a master's-level course on security challenges in Sub-Saharan Africa at Sciences Po. He has also worked for the French Ministry of Foreign Affairs and the European Commission on the African continent, notably in South Africa, Kenya, and the Democratic Republic of Congo.

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