By
Cullen Hendrix
Africa-Press – Eritrea. The confluence of two accelerating trends augurs poorly for critical mineral-rich economies in the Global South: the rise of economic nationalism in advanced economies and the return of territorial conquest as a normalized—if not yet fully legitimized—tool of statecraft. The United States and the European Union are aggressively pursuing domestic critical mineral capacity using statist, often protectionist measures, including subsidies and tariffs. Meanwhile, minerals and land are reemerging as central concerns in global diplomacy: from a tariff war with Canada to deals with Ukraine, and from Russia’s occupation of eastern Ukraine to Israel’s encroachments on Syrian territory and increased Chinese military drills near Taiwan—and even President Trump’s thinly veiled aspirations to acquire Greenland—territorial expansion is back on the policy menu in ways unseen since World War II.
As major powers turn more nationalistic—through trade barriers or territorial grabs—to secure critical mineral access, resource-rich countries in the Global South face growing pressure. Critics who view globalization as a neocolonial force may find its alternatives even less appealing. Unlike the Cold War or the liberal international order that followed, the emerging system increasingly resembles the explicitly colonial era that preceded them. In this context, globalization may now be the best defense against a return to the zero-sum politics of 19th- and early 20th-century imperialism. To avoid becoming pawns in a new round of great-power resource struggles, Global South governments must resist the temptation of sweeping export bans and economic nationalism. Instead, they should adopt smarter tools—such as targeted export taxes, processing requirements, and licensing regimes—to attract investment, strengthen domestic value chains, and preserve sovereignty in an era of heightened geopolitical competition.
Extractive Industries and Colonialism Past and Present
The story of the colonial era, lasting from the 15th through the mid-20th centuries, is inseparable from the search for raw materials. The Spanish conquests of the Aztec and Incan empires were fueled by gold and silver lust. The resulting influx of New World-sourced ingots and species catalyzed economic expansion in Europe and helped create the antecedents of the modern trading system. Similar motives contributed to the colonization of Africa’s Gold Coast (present-day Ghana), South Africa, and Zimbabwe, with South Africa also providing a bounty of platinum. Europe’s industrialization and electrification made Africa’s Copperbelt—today the Democratic Republic of Congo and Zambia—strategically significant. A similar story unfolded in Southeast Asia, where European colonies in the Dutch East Indies, British Malaya, and the Philippines provided not only precious metals but also iron, tin, and later nickel. Today prized for its role in battery storage, demand for nickel first soared after Harry Brearley, an English metallurgist, developed the alloy known today as stainless steel in 1913.
Along with oil and rubber, these various mineral resources were the prize motivating Imperial Japan’s campaign in the East Indies during World War II. Similarly, Nazi Germany’s quest for Lebensraum (“living space”) was also a quest for Mineralraum (“mineral space”): the Donbas’ iron and manganese deposits, Norway’s nickel and heavy water, and the Lorraine’s iron ore.
Both the early and 20th-century episodes of colonial expansion and territorial conquest were the outcome of economic nationalism in the core countries. In the early period, mercantilism held that countries’ trade and security relations were inherently zero-sum, markets were not dependable for securing an adequate resource base, and therefore equilibrating supply and demand could only be done via territorial expansion. In the latter period, Imperial Japan and Nazi Germany both rose during the collapse in global markets that followed and perpetuated the Great Depression. If markets couldn’t be trusted, expeditionary forces and direct rule could be.
The collapse of those empires following World War II would be the beginning of the end for the colonial era. By the 1970s, the colonial era was mostly over, with only Portugal still holding on to African territories collectively larger than Indonesia or Mexico: Angola, Guinea-Bissau, and Mozambique. Not coincidentally, these territories were rich in diamonds, oil, copper, and iron and provided Portugal’s lagging economy with a captive market for its exports.
From Colonialism to Neocolonialism
Most of the newly sovereign former colonies were poor, and their existing trade and investment relationships continued to revolve around their former colonial masters. To describe this state of affairs, Kwame Nkrumah, Ghana’s first prime minister and president, developed the concept of neocolonialism, labeling it imperialism’s final and most insidious stage.
According to Nkrumah, former colonial powers maintained tacit control of the Global South through unequal trade, foreign investment, and covert or militarized interventions, keeping the core-periphery dynamic largely intact. The main differences were that former colonies now had UN votes and their own imperatives to generate revenue and provide governance. Nkrumah’s framework extended beyond direct colonial ties to include post-independence relationships with the United States, the Soviet Union, and the other industrialized economies of the Global North.
The key distinction between the Global North and South was not ideological but rather their roles in the global division of labor. Most former colonies were heavily dependent on primary exports, including minerals. These raw materials were exported to the Global North, where they were refined for industrial purposes and then re-exported to the colonies in the form of intermediate goods like steel or as finished manufactured products. Development economists Raul Prebisch and Hans Singer conjectured this state of affairs would result in primary commodity exporters “running to stand still,” having to export ever more raw material to continue financing the demand for manufactured imports that grew as the countries gained purchasing power.
To break this cycle, developing countries would need to look inward for development. In the post-colonial era, this took the form of import substitution industrialization (ISI), a development model that succeeded in its early stages but that faltered after the low-hanging fruit (cement and steel for larger developing markets) had been picked. These countries had broad latitude to pursue these strategies during the Cold War in large part because they were seen by Western policymakers as a bulwark against communism—better economically nationalist than communist. But ISI left many of its adopters laden with debt and facing highly conditional debt restructuring and fiscal austerity.
Today, the same impulses are motivating export controls and efforts to downstream the minerals sector, moving up the value chain into mineral processing and advanced manufacturing. Energy transitions are ramping up demand for critical minerals like lithium, cobalt, graphite, and rare earth elements. And military needs are focused on other materials like gallium, germanium, antimony, and tungsten. Seeking better development outcomes, mineral-rich developing and middle-income economies are keen to move beyond mining into higher value-added activities like processing and manufacturing in order to generate higher-paying jobs and increase government revenues.
In doing so, these countries are following the model established by Indonesia, the world’s leading producer of nickel, a key input for steelmaking but also EV batteries. Indonesia has banned unrefined nickel ore exports since December 2020, forcing investment in domestic smelters to process materials locally for export. Indonesia’s seeming success with downstreaming—in just the first two years, the value of its nickel exports increased threefold, with only 29 percent of the increase due to higher nickel prices—has bred mimicry. African governments have been particularly swayed, with countries including Ghana, Namibia, Nigeria, Tanzania, and Zimbabwe either mulling over or imposing bans on unrefined ore exports of various materials.
But it isn’t just an African phenomenon. Malaysia has banned the export of unprocessed rare earth elements. Even Chile, perhaps the most liberal market economy in Latin America, has outlined a national lithium strategy requiring public-private partnerships in the development of lithium resources. Downstreaming the mineral sector is not without its challenges—in particular, the massive energy requirements—but the wide adoption of this strategy is a signal of its appeal. It also parallels developments in advanced economies, where green energy-focused industrial policies are subsidizing domestic production and using a variety of tools, including tariffs, domestic content requirements, and increased use of national security exemptions to onshore more industrial output and manufacturing.
Of course, the most prominent adopter of critical mineral export bans/restrictions has been China, whose export restrictions are part of a wider response to U.S. export controls on semiconductors. These reciprocal export bans are inseparable from each country’s national security interests and strategy. But they come with significant collateral damage, including guilt by association. Other mineral-rich exporting countries are not as interested in geopolitics and are rather viewing their mineral export policies primarily through the lens of development. But these export bans are being understood in Washington the same way China’s bans have been—through a brass-knuckled national security lens. President Trump’s April announcement of plans to host critical mineral processing facilities on Department of Defense-operated land lays bare the connection between mineral security and national security. Since then, several projects have been moved rapidly into environmental review.
South-South Collaborations: Not a Panacea
South-South collaborations are often promoted as an alternative to neocolonial relationships with advanced economies. South-South collaborations are arrangements between developing/middle-income countries intended to bypass dependence on advanced economy capital. Instead, South-South collaborations revolve around capital pooling through regional development banks or direct investment by Global South-headquartered firms. Prominent examples include the Democratic Republic of Congo and Zambia cooperating to establish an integrated supply chain for electric vehicle batteries and Brazilian mining giant Vale’s nickel operations in Indonesia and New Caledonia, as well as the African Development Bank’s in-progress African Green Minerals Strategy.
South-South collaboration is not a panacea. This is most obvious with respect to China, a middle-income country with a long history of promoting Global South collaborations and solidarity that nevertheless is still considered neocolonial in its approach. Indonesia may be the standard bearer for successful resource nationalism in the 21st century, but its success has been mostly predicated on Chinese firms shifting nickel processing activities from China to Indonesia—the same firms still control the value chains. Brazil’s Vale has roots in its developmental state of the 1940s but today is a publicly traded firm with hundreds of thousands of employees and operations in dozens of countries. Whether headquartered in Beijing, Perth, Toronto, or Rio, the transnational mining majors with the technology and capital to develop critical mineral resources are all highly sophisticated operations focused on profitability that compete with one another for market share and resource deposits. Expecting Global South mining and processing firms to operate very differently from their advanced economy-headquartered competitors just because their CEOs live and work in the tropics is on par with the noble savage myth for its naïveté and paternalism.
Relatedly, developing and middle-income countries often lack the domestic knowledge base and investment capital to turn deposits into links in supply chains and markets for their products. As an example, the DRC-Zambia agreement also includes an MOU with the United States, which provided both countries with mineral-related financing under the Biden administration. A default of a project to bring graphite from Mozambique to Louisiana highlights the difficulties in this approach, even if production at the mine has restarted. Japan and the United States are among the top three contributors of capital for both the African and Asian Development Banks, and these regional development banks depend in large part on investors from the Global North to purchase the bonds they issue to raise the majority of their funds.
Conclusion
The quintessence of extractive colonialism was unveiled by E.D. Morel in the early 1900s. Then a young shipping clerk, Morel’s company oversaw a route linking Antwerp and Boma, then the main port of what is now the Democratic Republic of Congo. He observed that while ships arrived from Boma with vast and varied treasures—ivory and rubber were the most coveted, but copper and gold were on the horizon—they steamed back to Boma laden with chains, guns, and soldiers.
It did not take a Holmesian act of deduction to conclude that Belgium—or more specifically, King Leopold II—was taking the Congo’s natural wealth and providing nothing in return but subjugation and the lash. Today, ships full of Congolese cobalt and copper mined by both Western and Chinese firms depart ports along East Africa headed for China, the world’s top consumer and refiner of critical minerals. The ships come back with a trove of predominately Chinese manufactured goods. This trade relationship may be asymmetric, but it is both incorrect and morally obtuse to claim the latter relationship is simply a modern extension of the former. Globalization has not ended global inequality or resulted uniformly in a race to the top, though it has brought hundreds of millions of people out of poverty. And it offers markedly better terms than the pre-globalization alternatives.
Long quiet, the drums of territorial conquest are sounding once again. This is not the fault of mineral-rich developing and middle-income countries, but it is a challenging rhythm they must navigate. In this context, the use of explicit export bans is risky, as it fuels the market-skeptical logic driving major powers’ territorial ambitions. Rather than adopt export bans as a matter of course, mineral-rich economies would be better served by disavowing the use of full export bans—which seemingly run afoul of Article XI of the General Agreement on Tariffs and Trade (GATT)—and replacing them with export taxes and/or licensing programs. Doing so could help achieve many of the same goals without reinforcing the security logics currently dominating major power—especially U.S.—foreign policy.
In courting investment, mineral-rich countries would be wise to pursue an all-of-the-above strategy, cooperating with both Western and Eastern firms. Working with both would dilute the overwhelming influence major powers can bring to their relationships with mineral-rich countries by pitting the interests of various mining firms (and their home-country governments) against the interests of other major powers. While joint ventures between Western and Chinese firms—such as the Total, Tullow, and CNOOC collaboration to develop the Albertine Rift oil deposits in Uganda—may be a thing of the past, mineral-rich countries should continue to attract investment from both blocs. Aligning exclusively with one or the other risks destabilizing both national development strategies and the broader international system.
Explicit economic nationalism in mineral-rich countries may provide them with short-term leverage. But it risks long-term subjugation—and not the kind of market disciplines globalization critics decry but real, ships-in-the-harbor gunboat diplomacy. Critical mineral-rich countries should reject the false binary of choosing sides and instead leverage markets and competition to secure better terms and move up value chains. Globalization may be imperfect, but in a world where the alternative looks increasingly like the 19th century with better technology, it remains the best guardrail against a return to conquest and coercion.
moderndiplomacy
For More News And Analysis About Eritrea Follow Africa-Press
