With developed global economies pushing for ever more digitisation, technological innovation and energy sustainability, there is one commodity for which demand has increased exponentially: rare earth metals (REMs). These raw materials are an indispensable component in the production of high-tech and low-carbon products that are essential to the growth that the US, UK and EU countries in particular are aiming for. But with the major producer and refiner of REMs, China, witnessing a rise in tensions and rivalry with its western buyers over the last few years, the global technology supply chain appears worryingly precarious. The answer, according to US and European leaders, seems to be a swivel to the global south and with Africa’s emerging rare earth metals market.

However, China too is in the race to develop its already impressive tech sector, and has set its sight beyond domestic supplies. This struggle for African resources only concerns the distribution of these materials among high-tech nations, but also for the sustainable economic development of African nations. Western governments have announced their intentions to gain access to these materials and thereby reduce their reliance on China for tech services and products. However, looking back on the impacts of both western and Chinese involvement in African trade, it is clear that these deals have been far from fair. It is therefore essential that future trade in African REMs must not come at the cost of African economies and local populations. 

Global technological supply chains have in recent decades been highly reliant on China, which became the world’s number one exporter of high-tech products in the 2000’s, according to research by the Asian Development Bank. In 2019, of the US’ total imports of consumer electronics, 70% were of Chinese origin, according to Boston Consulting Group, with the total value of Chinese high-tech exports amounting to USD716.6 billion. However, this trade relationship has become less attractive in recent years due to a myriad of factors, including China’s increased surveillance of Western companies operating in the county and allegations that Chinese technology, most notoriously Huawei, has been used for spying.

Outside the tech sphere, it is also important to consider that China holds an aggressive stance on its neighbour Taiwan and refuses to accept its independence, which is supported by most western countries. Western governments have responded to these developments by passing legislation (Chips Act – UK and US) that aims to limit trade with China and avoid these risks, and consequently grow domestic expertise and capabilities – both of which would reduce reliance on China should already tense political and trade relations worsen.

What cannot be sourced domestically, however, is the raw materials that have made China a technological powerhouse in the twenty-first century. Africa, with its REM resources of dysprosium and terbium in Namibia and apatite and synchysite in Malawi, to name but a few, offers trading in elements with an important range of industrial and military uses including in lasers, magnets, and energy saving technologies. But as both China and the West are rushing to secure trade deals with the directors of Africa’s new goldmines, it is essential for leaders to consider the long-term effects of this trade on its new partners and not simply the gains that might be made for their domestic economies.

Past mistakes on the part of both China and the West regarding trade relations with the Global south have had dire consequences, most notably in the Sahel region where French uranium processing companies operating in Niger were accused of striking deals which disproportionately benefited the former coloniser. Local populations benefitted little from this lucrative state export, which contributed to anti-French sentiment and calls for a halt in French-Nigerian trade relations. Equally, though China has attempted to frame itself as a more legitimate trade partner, having not participated in the West’s legacy of slavery and colonisation on the continent, the extension of Chinese trade relations to Africa is not without its flaws. For example, the China-funded petroleum refinery SORAZ in Niger has been criticised for its insufficient employment of Nigeriens and a dramatic gap in salaries for Chinese employees versus locals. In an ever more globalised world, it is imperative that supply chains are made sustainable through equitable and transparent deals which mutually support the economies, societies and security of all nations involved. 

However, the concept of equitable and sustainable trade policy is easier said than done. Establishing equal pay for locals and foreign works alike, or guaranteeing export economies a fair price on their resources would be an obvious start, but there are additional initiatives that could be implemented to ensure sustainable long-term REM trade with Africa. Obviously, handing over operational control of profitable industrial projects to local officials with insufficient expertise, or funnelling profits straight into the coffers of governments with records of corruption and financial mismanagement are unlikely to be the most impactful way to ensure that an industry remains efficient, and that local people benefit from income it generates.

Equally, it would not benefit the importing nation in the long run should their trading partner be inefficient at producing goods, and politically or economically unstable due to its trading partner’s unethical profit management. REMs are essential to the provision of tech, financial, transport and health services, interrupted supplies are to be avoided at all costs. To benefit both parties, then, trade with Africa in REMs should lend itself to a bottom-up process of economic empowerment of local populations. Whilst it is demeaning to dictate to African governments where the money earned from their own resources should be spent, it is essential that trade partners consider the role they play in encouraging positive structural change. Studies from the Faculty of Education at the University of Cambridge found a correlation between rates of secondary education and GDP. Education is a tool which not only empowers the individual to obtain better paid roles, but also contributes on a national scale to boost the economy. While Namibia has a relatively high literacy rate (92% according to the World Bank’s last record in 2021), other African rare earth metal suppliers like Malawi and Angola lag far behind.

Health and social care are additional ethical considerations that must be made when engaging with a trade partner, and again some African economies trail behind in their provisions. While the WHO states that developed economies have a 91% rate of universal healthcare (UHC) provision, some African countries displayed much lower rates at 48% in Malawi and 37% in Angola. Access to healthcare, like education, having a positive link to economic productivity according to the National Institutes for Health, it is again mutually beneficial for importing nations to prioritise the local needs of their exporting partners. To ensure that essential services benefit the many and not only the few, however, it is sometimes not possible to wholly rely on exporting governments to make sufficient provisions; considering that transparency scores in Malawi and Angola do not exceed 34/100, it is probable that not all funding earmarked for these services is received. Governments involved in this booming African industry must consider the most impactful way to reach local populations, for both ethical reasons and to ensure the success of their trade relations.

Grassroots movements and NGOs are prime targets for funding, since they are often in a position to provide services directly to those in need. Vast numbers of non-governmental initiatives, such as World Vision International in Angola and the Parent and Child Health Initiative in Malawi, improve education, healthcare and a host of other essential services in REM-producing African nations. But these organisations cannot function without funding. To improve mutual trade sustainability, it is therefore important that the importing economies which are now rushing to secure REM trade deals with African countries do not overlook the benefits of bolstering the economies and people of their trade partners. It is not only in the interest of the wellbeing of the African nation, but also that of the importing nation. As seen in Niger, unethical relationships result in unstable supply chains, which may cause trade failure on a dire scale.