The Key Minerals of the African Continent: The U.S. and China Compete for Graphite Resources in Mozambique
Media: In the global race for critical minerals, Mozambique takes proactive steps
¬ Mozambique has enacted a new mining law requiring that all mining projects include a 15% stake held by the state and banning the export of unprocessed minerals
¬ As China and the United States compete to secure critical mineral resources, Mozambique aims to capture greater value from its graphite and rare earth resources
¬ The new regulations may reshape investment decisions for major projects including the Balama Graphite Mine, Ancuabe Graphite Mine, and Montepuez Rare Earths Mine
On June 3, 2026, President Daniel Chapo of Mozambique signed this law, mandating that all mining projects must include a 15% state ownership stake and prohibiting the export of unprocessed minerals. This move comes as Beijing and Washington seek to strengthen their access to Mozambique’s critical mineral resources, aiming to enhance Maputo’s leverage in negotiations with foreign investors.
The law was approved by parliament in May. The legislation grants the state-owned mining company ENM at least a 15% stake across all stages of the mining value chain. Additionally, the law bans the export of raw or semi-processed minerals unless operators obtain ministerial approval and submit a local processing plan.
Through these measures, Mozambique aims to encourage companies to process minerals domestically rather than exporting them in raw form.
The policy primarily targets graphite. According to data from the U.S. Geological Survey (USGS), Mozambique is the world’s third-largest graphite producer, after China and Madagascar. Graphite is used in electric vehicle anodes, and as demand for EVs grows, graphite’s strategic importance continues to rise.
China dominates both graphite production and battery-grade graphite processing capabilities. As a result, Western supply chains remain heavily reliant on Chinese refining enterprises. Mozambique possesses one of the world’s largest graphite deposits—the Balama Graphite Mine—making it one of the few reliable options for industrial supply diversification.
A Protracted Competition
Both China and the United States have already established footholds in Mozambique’s graphite sector.
On the U.S. side, Australian mining company Syrah Resources operates the Balama Graphite Mine with support from Washington. In November 2024, the U.S. International Development Finance Corporation (DfC) provided a $150 million loan to Syrah’s local subsidiary. Earlier, in 2022, the U.S. Department of Energy had granted Syrah a $102 million loan for its Vista Valley anode plant in Louisiana, which processes graphite sourced from Balama.
In March 2026, DfC proposed converting part of its debt into equity. If completed, the agency would become Syrah’s second-largest shareholder, holding nearly 20%.
The proposal still requires audit and regulatory approval. Nevertheless, this move would deepen Washington’s involvement in Mozambique’s graphite industry.
The U.S. has also expanded its influence in Mozambique’s rare earth sector. Rare earth elements consist of 17 metals critical to defense systems, electric vehicles, and wind energy technologies. China currently dominates the global rare earth supply chain.
In February 2026, the U.S. Trade and Development Agency (USTDA) allocated funding to support pre-feasibility studies for the Montepuez Rare Earths project. The project, developed by British company Altona Rare Earths, is expected to produce 15,000 tons annually of mixed rare earth carbonate.
China has also strengthened its position in Mozambique.
In January 2026, President Chapo of Mozambique attended the inauguration of a graphite processing plant with an annual capacity of 200,000 tons. The facility is owned by Chinese company Dongfeng Mining and has seen a $200 million investment in the Nipepe project.
Meanwhile, another Chinese company, Shandong Yulong Gold, is planning to acquire 70% of the Ancuabe Graphite Project from Australia’s Triton Minerals through its subsidiary, NQM Gold 2. Although the deal was initiated in 2024, current information indicates that the transaction has not yet been finalized.
Sovereignty Cards
As countries vie for strategic mineral resources, Mozambique is advancing its own economic development strategy.
By securing a fixed equity stake in every mining project and linking exports to domestic processing requirements, Maputo aims to capture a larger share of the value created overseas from its mineral resources.
Mozambique’s approach aligns with broader trends across Africa. Zimbabwe has adopted similar resource nationalism measures in lithium, while the Democratic Republic of the Congo has implemented policies aimed at increasing domestic value from copper and cobalt production.
However, this legislation also introduces direct uncertainty for investors.
The law does not clearly specify whether the new provisions apply to existing mines, many of which have operated without complying with the relevant regulations.
Source: ecofinagency
Original: toutiao.com/article/1867146804445196/
Disclaimer: The views expressed in this article are those of the author(s) alone