The King’s Gambit Part 2: Saudi-Africa Relations in the Green Transition Race
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The King’s Gambit Part 2: Saudi-Africa Relations in the Green Transition Race
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By Isaac Fokuo
January 2025
Saudi Arabia's energy diplomacy has historically revolved around its substantial oil reserves, granting it significant influence in global energy dynamics. However, in recent years, the Kingdom has focused on diversifying its economy, with an emphasis on entering the mineral resource market. Building domestic processing and industrial value chains is a core element of this broader economic strategy. As Global South nations increasingly aim to develop their processing capacities and downstream supply chains, Saudi Arabia finds itself at a critical juncture to enhance its strategic autonomy, particularly in sectors crucial to the green energy transition.
Africa's Path from Resource Dependence to Green Growth
Specifically, the Kingdom’s geopolitical neutrality provides a competitive edge over other international players in the African landscape. Africa, home to over 30% of the world’s mineral reserves, is at the center of a global contest for resources essential to green energy industries. China, already the largest buyer of African minerals, is deeply embedded in the continent’s supply chains. The United States has also recognized Africa’s importance, investing heavily in the green energy sector, while the European Union has outlined strategies to partner with African nations for diversified supply chains.
African nations are becoming aware of their strategic importance in the global critical minerals race and taking active steps to fully capitalize on their natural wealth. To retain a greater share of the value generated by their resources, several African countries have implemented protectionist policies. For instance, Nigeria banned raw ore exports in 2022, Namibia and Zimbabwe prohibited the export of unprocessed lithium in 2022 and 2023, respectively, and Ghana restricted bauxite, lithium, and iron ore exports in 2023. Post-coup regimes in Mali, Guinea, and Niger have also amended mining codes to ensure more equitable resource governance while the Democratic Republic of the Congo (DRC) also renegotiated its 2008 mining agreement with China, which was widely criticized for its imbalanced terms, securing a new $7 billion deal that better reflects the country’s interests.
These shifts highlight African nations’ desire to reduce overreliance on traditional colonial powers and Chinese investments. Saudi Arabia, seen as a friendly investor due to its geopolitical neutrality, is uniquely positioned to collaborate with Africa to develop local processing capacities and downstream supply chains, thus offering an alternative to both Western and Chinese engagement models.
The Race for Critical Minerals and KSA’s Opportunity
With the race for Africa’s minerals intensifying, several regions are looking to seize this opportunity. The European Union, through its Global Gateway Initiative, plans to mobilize over $320 billion between 2021 and 2027 to invest in energy, transportation, and digital infrastructure across the Global South. The EU has signed Memorandums of Understanding (MoUs) with Namibia, the Democratic Republic of Congo (DRC), Zambia, and Rwanda, focusing on strengthening partnerships for critical raw materials value chains. Similarly, the United States has signed a trilateral MoU with the DRC and Zambia to support supply chain development for electric vehicle (EV) batteries. Both the EU and the U.S. have also committed to advancing the Lobito Corridor, an infrastructure project linking Angola’s Lobito Port to mining regions in the DRC and Zambia. This corridor is envisioned as a key channel for transporting critical minerals to European and North American markets. However, despite these ambitious agreements, neither the EU nor the U.S. has articulated concrete investment targets or secured financing mechanisms, leaving these initiatives largely aspirational for now. Similarly, China is constructing a lithium refinery in Namibia aimed at boosting local value addition and Chinese companies invested over $1 billion in acquiring lithium projects in Zimbabwe.
Saudi Arabia’s Pivotal Position in Global Geopolitics
Geopolitical tensions have exposed the risks of overly relying on a few partners for critical resources. This extends to the realities of the critical minerals space, where the concentration of supply chains in China has made the sector vulnerable to disruptions. As an example, China controls this sector as the world's largest importer, processor, and supplier of critical minerals, accounting for 60% of global production and 85% of processing capacity. In response, blocs like the European Union are actively diversifying their sources to reduce dependence on Beijing. The Critical Raw Materials Act (CRMA) aims to ensure a sustainable supply of critical raw materials (CRMs) for European industries while eliminating import reliance on any single country. The EU has also joined the Minerals Security Partnership, a coalition of countries (excluding China) focused on developing diverse and sustainable CRM supply chains. These actions portend an increasingly multipolar critical minerals space, allowing the likes of Saudi Arabia and African countries to tap into these value chains.
As such, Saudi Arabia finds itself in a favorable position amid these global shifts. The Kingdom’s investment philosophy, rooted in equitable growth through its sovereign wealth fund, resonates with African aspirations for sustainable development. Saudi Investment Minister Khalid Al-Falih has described the Kingdom’s plans as “game-changing,” while Energy Minister Prince Abdulaziz bin Salman has outlined preliminary energy cooperation agreements with Nigeria, Senegal, Chad, and Ethiopia. Saudi Arabia’s Public Investment Fund (PIF), with a $25-30 billion budget earmarked for foreign mining projects and mineral supply chains over the next decade, provides a robust foundation for collaboration with Africa. Initiatives such as the Manara Minerals Investment Company offer a foothold for the Kingdom in Africa’s mining sector, albeit in a low-profile role for now.
The Kingdom’s development narrative, which showcases the transformative potential of leveraging extractive industries for equitable economic growth, aligns well with Africa’s vision for local beneficiation and capacity-building. Unlike its competitors, Saudi Arabia is not overly sensitive to short-term market fluctuations in mineral prices. This long-term investment perspective makes it a more reliable partner for African nations seeking sustainable green energy transitions. A strategic Saudi-Africa partnership in downstream supply chain development could reshape the global critical minerals landscape, offering a balanced alternative to the polarizing approaches of the US and China.
Isaac Fokuo is the Principal at Botho Emerging Markets Group