Is there a development quid pro quo? China’s development finance and mineral access in Africa

By Congyi Dai

Minerals are the main inputs needed for manufacturing clean energy technologies such as lithium-ion batteries, solar photovoltaic panels, electric vehicles and wind turbines. They are essential resources to the global clean energy transition.

China has a dominating role in mineral processing. It refines 35% of the world’s nickel, 50-70% of lithium and cobalt and nearly 90% of rare earth elements. Over the past two decades, China has also become the world’s largest bilateral development lender––it has deployed nearly half a trillion dollars in development finance across the Global South since 2008. But whether Chinese foreign policies in minerals and development finance are connected has been surprisingly understudied. Existing research either treats these two topics in isolation or relies on individual country case studies to infer the relationship.

A new working paper, published by the Boston University Global Development Policy Center, tackles this question head-on at a continental scale. Is China’s development finance linked to gaining access to minerals in Africa? Which minerals are driving this pattern? Do different minerals attract different financial instruments? And what role of political instability in the host-country is playing in China’s engagement? Drawing on four datasets covering Chinese development finance and mine acquisitions across 54 African countries, this study attempts to answer these questions.

The short answer: yes, there is evidence of a development quid pro quo, but the details reveal a more strategic and differentiated picture than a simple resources-for-loans story.

Copper, cobalt, nickel and platinum group metals are all significantly associated with Chinese loan commitments. These are precisely the minerals most critical for clean energy manufacturing. Uranium, however, tells a different story. It shows the strongest association not with loans but with development project counts––roughly half of those additional projects carry a significant grant component with highly concessional terms. In other words, for uranium, China’s financing tends to prioritize supply access over financial returns.

The findings show that low political stability in a recipient country does not deter Chinese engagement in mine acquisitions, suggesting either a deliberate high-risk tolerance that sets China apart from Western development finance institutions or not enough lower-risk bankable projects are available to China.

In summary, these findings shed light on how development finance is linked to global clean energy supply chains, often with little transparency. As the world turns its attention to the mineral sector, understanding the tools each actor uses, and the conditions under which they deploy them, is essential for policymakers, civil society and resource-rich countries navigating this new landscape.

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