Assessing the Long-Term Risks and Opportunities in Chinese Mining Investment in Africa: ESG Exposure and Geopolitical Repercussions in Resource-Dependent Markets

Chinese mining investments in Africa have become a linchpin of the global energy transition, with Beijing securing access to critical minerals like cobalt, lithium, and nickel—resources essential for electric vehicles and renewable energy technologies. However, these investments are increasingly scrutinized for their environmental, social, and governance (ESG) risks, as well as their geopolitical ramifications. While China’s Belt and Road Initiative (BRI) has funneled billions into African mineral projects, the long-term sustainability of these ventures remains uncertain, particularly as global demand for clean energy materials surges and geopolitical tensions intensify.

ESG Performance: A Mixed Record

Chinese mining operations in Africa have delivered economic growth and infrastructure development, but their ESG track record is uneven. A 2025 report by the Boston University Global Development Policy Center and LSE IDEAS found that while Chinese projects often improve local economies, they frequently fall short of international ESG standards, particularly in labor rights and environmental protection [3]. For instance, Chinese manufacturing foreign direct investment (FDI) in Africa has been linked to increased carbon emissions in labor- and resource-intensive sectors, underscoring the need for stricter environmental regulations [1].

China’s 2022 Environmental Guidelines for overseas projects emphasize environmental impact assessments (EIAs), community engagement, and biodiversity conservation [2]. Yet, enforcement remains weak. A 2024 study noted that Chinese firms operating in the Democratic Republic of Congo (DRC) and Mali have faced criticism for inadequate pollution control and poor labor practices, despite domestic crackdowns on environmental violations in China [2]. This inconsistency raises concerns about the scalability of sustainable practices in resource-dependent markets.

Geopolitical Repercussions: Strategic Dominance and Regional Tensions

China’s investments in African minerals are not merely economic—they are geopolitical. With Africa holding 60% of the world’s cobalt reserves and significant lithium deposits, Beijing has positioned itself as a dominant player in global supply chains. In 2023, Chinese companies invested $8–10 billion in African critical mineral projects, far outpacing U.S. efforts [1]. For example, the $1.875 billion acquisition of Botswana’s Khoemacau Copper Mine by MMG Ltd, a Chinese-owned firm, and the $2 billion Lubambe Copper Mine in Zambia highlight China’s strategic focus on securing raw materials [1].

This dominance has geopolitical consequences. China now controls 73% of global cobalt refining and 68% of nickel processing, enabling it to influence prices and impose export restrictions [2]. Meanwhile, U.S. and European companies are scrambling to diversify supply chains, but their investments remain dwarfed by China’s scale. The Stimson Center notes that U.S. investments in African critical minerals totaled less than $1 billion in 2023, compared to China’s $8–10 billion [1]. This imbalance risks entrenching China’s influence in sub-Saharan Africa, where it has become the largest mineral importer [1].

However, Chinese operations are not without risks. Security threats, including attacks on mining sites in the Central African Republic and political instability in Mali and Niger, have disrupted projects and raised concerns about the “debt trap” narrative [4]. Kenya’s experience with Chinese-backed infrastructure, which now accounts for 64% of its external debt, exemplifies the economic dependencies that can arise [2].

Balancing Risks and Opportunities

The long-term viability of Chinese mining investments in Africa hinges on addressing ESG shortcomings and geopolitical vulnerabilities. For African nations, the challenge lies in leveraging mineral wealth without falling into the “resource curse”—a pattern where resource-rich countries fail to achieve sustainable development due to corruption, inequality, and environmental degradation.

Recommendations include:
1. Strengthening ESG Compliance: Chinese firms must adopt enforceable ESG standards, such as mandatory EIAs and community benefit-sharing agreements, to align with international norms [3].
2. Diversifying Supply Chains: African governments should prioritize value addition (e.g., processing raw materials locally) to reduce dependency on raw material exports [5].
3. Geopolitical Collaboration: International partnerships, such as the U.S.-backed Critical Minerals Strategy, could counterbalance China’s influence while promoting sustainable practices [1].

Conclusion

Chinese mining investments in Africa present a paradox: they are vital for the global energy transition yet fraught with ESG and geopolitical risks. For investors, the key lies in balancing short-term gains with long-term sustainability. As the world races to decarbonize, the fate of African mineral markets—and the communities that depend on them—will be shaped by how these investments evolve.

Source:
[1] How the US and China Invest in Critical Minerals [https://www.stimson.org/2025/competing-for-africas-resources-how-the-us-and-china-invest-in-critical-minerals/]
[2] Can China improve its transition mineral mining abroad? [https://globalwitness.org/en/campaigns/transition-minerals/can-china-fix-the-problems-with-transition-mineral-mining-abroad/]
[3] Africa: New research highlights ESG concerns in Chinese-funded infrastructure projects [https://www.business-humanrights.org/en/latest-news/new-research-highlights-esg-concerns-in-chinese-funded-infrastructure-projects-across-africa/]
[4] The growing risks for Chinese companies in conflict-ridden African nations [https://www.scmp.com/news/china/diplomacy/article/3315136/growing-risks-chinese-companies-conflict-ridden-african-nations]
[5] China's Role in Africa's Critical Minerals Landscape [https://afripoli.org/chinas-role-in-africas-critical-minerals-landscape-challenges-and-key-opportunities]