In late October, Peter Mutharika, the President of the western African nation of Malawi, issued an executive order banning the export of unprocessed raw minerals, with the policy taking effect immediately.

According to the ban, a range of strategic minerals—including lithium, rare earths, graphite, and others—are now restricted from being exported. This move is clearly aimed at boosting the country's own downstream mineral processing capabilities, in hopes of keeping more value on the supply chain within Malawi rather than selling at low prices and allowing foreign companies to reap most of the profits.

Malawi’s ban is clearly not an isolated case. Over the past two years, several resource-rich African countries have been tightening their mineral export policies, with resource nationalism visibly intensifying:

In 2024, Gabon announced it will halt exports of unprocessed manganese ore starting in 2029;

This February, the Democratic Republic of Congo (DRC) implemented a ban on cobalt exports, and in November added a quota management framework;

In May, Guinea directly revoked the mining licenses of dozens of companies, later publishing a list of 100 enterprises whose mining rights were withdrawn;

In June, Zimbabwe declared it would fully ban exports of lithium concentrate starting in 2027, mandating that deep processing must be done locally

Africa possesses the world’s richest mineral resources, yet remains at the very bottom of the global manufacturing value chain. Raw minerals are exported at rock-bottom prices, while profits from processing, opportunities for industrial upgrading, and local jobs are all taken by foreign companies. As a result, local economies have not truly benefited from their resource wealth. This unfair division of labor is becoming increasingly unacceptable for many countries.

Today, the strategic value of critical minerals is on the rise. Resources such as lithium, cobalt, nickel, and rare earths are not only core raw materials for the new energy industry chain, but are also increasingly regarded as strategic assets for future geopolitical competition. Furthermore, the highly concentrated distribution of these resources gives resource-rich countries greater leverage and confidence to implement regulatory measures than ever before.

Over the past two years, several countries in West and Central Africa have experienced coups. The new governments have generally raised the banner of nationalism and view resource control as a key source of political legitimacy, further accelerating the rise of resource nationalism.

The tightening of policies in resource-producing countries poses significant challenges for external investors, especially Chinese enterprises. After years of "going global", Chinese investment and cooperation with Africa and other developing nations in the mining sector has become deeply entrenched. With changing policies, Chinese companies will inevitably see their bargaining power weaken and face a restructuring of profit distribution rules, not to mention greater uncertainties surrounding supply chain stability.

Today, resource nationalism is no longer just the policy of a few countries but is evolving into a collective trend among developing nations. For Chinese companies, a strategic reconfiguration of the global resource chain and an adjustment in cooperation models are necessary to maintain initiative and security in the global manufacturing chain.

01 Bargaining Power

Africa and Latin America, as typical representatives of the developing world, are both regions extremely rich in mineral resources.

For instance, Africa holds 25% of the world’s copper, 80% of its cobalt, and 90% of its platinum group metals; Latin America controls nearly one-third of the global supply of copper, cobalt, lithium, nickel, graphite, and rare earths. It is fair to say that the core materials for the new energy era are heavily concentrated in these two regions.

Despite abundant reserves, these countries have long struggled to translate resources into genuine economic power. Take the Democratic Republic of the Congo (DRC), with vast territory and exceptionally rich resources—it leads the world in reserves of copper, cobalt, diamonds, tin, and coltan, among other key minerals. Yet, it remains one of the poorest countries globally, with 70% of its population still living below the poverty line.

Due to weak infrastructure, outdated processing technology, and other factors, these countries have long been limited to exporting low value-added raw ores, with most of the profits left overseas. Resource-rich but not wealthy—this has been the longstanding predicament of Africa and Latin America.

In recent years, as commodity prices have surged, resource-rich countries have sought to retain more value from their industrial chains domestically. The demands of African and Latin American nations have shifted from simply "selling raw materials" to "participating in value distribution." Many countries have explicitly stated their intentions to leverage domestic resources to develop local manufacturing and move up to higher value-added industries.

For example, Morocco has designated new energy vehicles as a national industrial strategy priority, planning to produce 100,000 electric vehicles annually starting in 2025. Egypt has also announced plans to launch local manufacturing of solar modules in 2026, aiming for a domestic production rate of up to 90%. More and more countries are hoping that resource revenues can be used to support their own economic and political objectives—this is a classic manifestation of resource nationalism.

In fact, this isn’t the first wave of resource nationalism. After World War II, with the collapse of the global colonial system, a group of resource-rich countries sought to seize control of their own resources through nationalization and export restrictions. Later, after the 2008 global financial crisis, emerging economies collectively raised their voices on resource pricing, attempting to leverage their resource advantages for greater influence on the world stage.

The objectives of this current wave are similar to the previous two: in unique circumstances, countries aim to strengthen control over their resources to secure greater economic benefits and enhance their political leverage. However, because the context is different, this resurgence of resource nationalism has many new characteristics.

With breakthroughs and widespread adoption of new energy technologies, eight categories of minerals—including lithium, cobalt, nickel, copper, rare earth elements, and platinum group metals—have become indispensable resources for the new energy industry chain. Compared to traditional energies like oil, these minerals are distributed even more concentratively, which in turn makes countries holding these resources all the more influential in the global supply chain.

Compared to the past, the shift toward green energy has sharply increased the consumption of certain minerals.

Statistics show that a solar power plant consumes five times as many resources as a coal-fired plant; an electric vehicle requires six times as many mineral resources as a gasoline car; and an offshore wind farm uses more than ten times the resources of a gas-fired power plant. Higher concentration, greater consumption, and weaker substitutability—these three factors combined have strengthened the bargaining power of resource-rich countries in the supply chain compared to before.

Even more significantly, unlike traditional resources such as iron ore, copper, and diamonds—whose buyers were typically former colonial powers—today’s mineral resources are increasingly purchased by Chinese companies, marking a fundamental shift in the makeup of buyers.

Against this backdrop, resources are not only key economic assets for these countries, but have also become vital tools in the game of geopolitical competition. Resource-rich countries now widely believe that, with these critical bargaining chips, they finally have the opportunity to proactively change their own development trajectories.

02 Risks

Compared to previous waves of resource nationalism, this time the policy tools are clearly more diverse. They not only include traditional measures such as forced equity acquisition, higher resource taxes, and restrictions on foreign ownership, but also new tactics such as mandatory local processing, export quotas, bans on the export of raw minerals, and stricter mining license reviews.

Because many resource-hungry countries—including China, as well as those in Europe and North America—have established mining investments and strategic partnerships in Africa and Latin America, this new round of policy tightening is bound to affect all resource-importing nations (i.e., manufacturing countries) and will challenge the stability of global supply chains.

Recently, new regulations in Malawi have already put several globally significant mining projects at immediate high risk. Companies such as Australia’s Sovereign Metals, Lotus Resources, the Britain’s Rio Tinto, and Japan’s Toho Titanium all have mining projects in the country, and now face potential project suspension or even contract renegotiation risks.

Among all affected countries, China is clearly faced with higher risks and greater exposure.

By the end of last year, China’s cumulative investment in Africa reached $43.8 billion, with 23% flowing directly into the mining sector. Chinese companies are deeply involved in projects such as copper mines in Zambia, copper-cobalt mines in the Democratic Republic of Congo, rare earth mines in Namibia, lithium mines in Zimbabwe, and oil and gas projects in Nigeria.

Furthermore, China is not only one of the largest foreign investors in Africa’s resource sector, but has also become Africa’s number one resource importer. According to current data, Africa supplies about a quarter of China’s key mineral imports. If resource-exporting countries tighten their policies, China faces potential supply disruptions for certain critical minerals—which can have a crucial impact on the security of China’s industrial supply chain.

In the value chains of most critical minerals, China serves as the world’s midstream processing hub. For example, 98% of China’s cobalt ore is imported from the Democratic Republic of Congo, and China is the world’s largest producer of cobalt chemicals and the top refining center. China holds 40% of global copper refining capacity, with most copper from the Congo further processed and value-added in China. In areas such as graphite and rare earths, China’s midstream processing has also long held a dominant position.

This also means that if more resource-rich countries follow Malawi’s example and require minerals to be processed before export, the profits from the smelting and deep processing stages—traditionally carried out in China—will be squeezed.

In the short term, this will force China to purchase more expensive and less centrally supplied primary processed goods. In the long term, China’s cost advantage, built on scalable processing capacity, could be eroded, weakening its position in the global mineral supply chain.

Additionally, most of China’s resource projects in Africa are led by state-owned enterprises, which can easily trigger political sensitivities. Many African countries experience frequent political upheaval, and when new governments come to power, they often re-examine resource agreements inked by previous administrations. For instance, after the coup in Niger, the new government reviewed projects that China National Petroleum Corporation had agreed upon with the ousted regime.

Although resources nationalism is not aimed solely at China, the country’s significant presence in African resource development means that this new wave of tighter policies is very likely to have a greater impact on Chinese manufacturing. In the context of a global upswing in resource nationalism, Chinese-backed projects may become primary targets for both public scrutiny and policy intervention.

03 Strategies

Faced with a new wave of resource nationalism, Chinese companies are operating under increasing pressure. As they deepen their involvement in resource development across Africa and Latin America, the time has come to make timely adjustments in cooperation models and industrial layouts.

The most effective approach is to shift business cooperation from simply “acquiring resources” to “building industries together”—a model that serves the interests of both China and resource-rich countries.

In the past, the overseas operations of Chinese enterprises were mainly focused on mining and other upstream segments. In the future, a more effective pathway is to encourage the extension of the industrial chain into midstream processing and even higher-value-added sectors, such as manufacturing for new energy industries. This not only strengthens the security of China’s supply chains but also creates tax revenue and job opportunities for resource countries, addressing their calls for industrialization and ultimately increasing their willingness to cooperate.

In recent years, many Chinese enterprises have already achieved successful joint ventures with resource countries, for example:

Ganfeng Lithium’s lithium development project in Argentina involves joint investment with the local government to build mining and primary processing facilities;

China Nonferrous Mining Corporation established a digital production control center at the Chambishi Copper Mine in Zambia, greatly improving the efficiency and management transparency of local mining operations;

In Indonesia, Tsingshan Group and Indonesia’s Virtue Dragon Nickel Industry (VDNI) jointly developed the Qingshan Industrial Park, facilitating a complete value chain from ore extraction to nickel-iron smelting and stainless steel production, and helping to establish a regional hub for smelting and processing.

Looking ahead, Chinese enterprises should not limit their investments in Africa and Latin America solely to mining industries, but rather increase efforts on project localization. This includes measures such as hiring more local employees, participating in community development, and building public facilities. By adopting an “embedded operation” model, companies can reduce social resistance and strengthen their local presence and credibility.

For resource-rich countries, this kind of long-term commitment increases the stickiness of projects and is also an important way to address “anti-foreign investment sentiments.”

Currently, the biggest challenge for Chinese enterprises is that few countries worldwide can match the operating efficiency of Chinese businesses. Even if companies wish to extend the resource industry chain in Africa or Latin America, they still face significant hard constraints due to weak local infrastructure, resulting in abnormally high processing costs and low efficiency.

Data shows that road transport costs in inland Africa are three to four times higher than in China. For example, transporting copper from Lubumbashi in the Democratic Republic of the Congo to Durban Port costs $247–$367 per ton, whereas a similar distance in China only costs $60–$80 per ton. In terms of efficiency, the average speed of trucks in Africa is only half that of China’s trunk transport. For instance, it takes over 72 hours to transport goods between Lagos, Nigeria, and Johannesburg, South Africa (4,100 kilometers), while in China a similar journey takes only 36–48 hours.

These are not merely issues of cost—they also lead to unstable supply chains and uncontrollable logistics, directly restricting the viability of local processing industries.

Beyond these negative realities, an even bigger problem lies in the risks from policy shifts and geopolitics. Resources in Africa and Latin America are highly concentrated, making them focal points of competition among major powers. Against the backdrop of global supply chain restructuring, the U.S. and EU have launched strategies such as the “Critical Minerals Alliance,” muddying the waters despite lacking a manufacturing base, which has placed even more political factors into resource cooperation.

Currently, Western countries are exerting diplomatic pressure, shaping public opinion, and attaching conditions to aid in order to indirectly influence cooperation between China and Africa. For example, they are setting higher entry thresholds to restrict Chinese business activities and using multilateral alliances to limit exports to China. Even when Chinese companies deepen local cooperation and take on greater social responsibilities, it is still difficult to avoid supply chain disruptions entirely.

Essentially, resource nationalism is a game of interests between countries possessing resources and other international powers.

This recent surge is the result of African nations reevaluating their own interests and making important, rational choices—they have a stronger sense of sovereignty and are more determined to ensure that their resources truly serve their own development, rather than continuing to supply the global manufacturing supply chain at low prices.

Today, this shift is reshaping the global resource order and putting considerable pressure on major resource-importing countries, including China. This means that China’s model of cooperation with Latin America and Africa must enter a new phase. The previous approach—focused primarily on simple resource extraction—has become inadequate for this new landscape of competition.

For international companies, there is still much work to be done. This includes building more robust risk mitigation systems, diversifying sources of procurement, promoting a more diversified supply chain layout, participating in the formulation of international rules, and strengthening compliance capabilities overseas. Continuous breakthroughs in key materials and technologies are also required to enhance their irreplaceability within the supply chain.

At present, resource nationalism is very likely to become a lasting new normal. International companies must adapt and adjust quickly to secure their place in the global resource competition. The good news is that more and more Chinese enterprises are already transforming, and many have begun to see initial results. The direction is right, and positive factors are steadily accumulating.