India and Southern Africa: Strengthening Partnerships for Critical Minerals

As New Delhi looks to diversify its Critical Minerals partnerships, the multidimensional relationship between India and the SADC must be honed further to establish resilient supply chains.

The National Critical Minerals Mission announced on 29 January, 2025, consists of several key components to ensure a ‘sustainable, resilient, and self-reliant critical minerals value chain in India’.  One of the core elements of this mandate is the acquisition of critical mineral assets abroad. It recognises the need to leverage existing economic and political relations with resource rich countries to enter into Critical Mineral Partnership Agreements.

Focusing on this development, a study by Veda Vaidyanathan, titled ‘India, Africa and Critical Minerals: Towards a Green Energy Partnership,’ explains why, where, and how India can build strategic collaborations with mineral-rich countries in the African continent. It identifies African priorities, highlights Indian interests, and finds synergies, presented as nine policy pathways.

The paper recommends that the South African Development Community (SADC) is a “regional country cluster” that India should deepen its engagement with.

The paper recommends that the South African Development Community (SADC) is a “regional country cluster” that India should deepen its engagement with. This recommendation is in alignment with other studies that position the SADC region as a pivotal hub for critical mineral partnerships. According to the British Geological Survey (2024), in terms of regional distribution, countries in the SADC have produced the most critical minerals between 1970-2022.

Endowed with minerals such as graphite (Mozambique and Tanzania), platinum (South Africa), copper (Zambia), nickel (Botswana and Zimbabwe), cobalt (Democratic Republic of Congo, South Africa), and titanium (Mozambique and Madagascar), the region has received substantial attention from global investors. According to the United Nations Economic Commission for Africa (UNECA), “despite the low levels of geological exploration and mapping across the region, Southern Africa hosts an estimated 25 percent of the world’s critical energy transition minerals and mining is underway for these minerals at both small scale and large scale.”

This blog maps India’s political and economic engagements with ten SADC countries over the past decade – South Africa, Tanzania, Malawi, Namibia, Botswana, Zambia, Zimbabwe, Mozambique, Madagascar and the Democratic Republic of Congo (referred to as DRC in this blog) – and evaluates their sufficiency in establishing resilient critical mineral partnerships.

The timeline of 2014-2024 was chosen because India-Africa relations have significantly strengthened during this period, marked by deliberate efforts to build stronger ties across Africa. In 2015, India hosted the third iteration of the India-Africa Forum Summit (IAFS III) with participation from all 54 African countries. In 2018, the Indian Prime Minister outlined ten principles that would guide India’s engagement with countries in the continent during his address to the Parliament in Kampala, Uganda, stating that “Africa will be at the top of our priorities”.  Since then, India has increased its diplomatic footprint across Africa by opening up 18 new Embassies and High Commissions in the last decade, and accelerating the number of incoming and outgoing high level visits.

As the global demand for critical minerals intensifies, major powers such as the United States, Japan, the European Union, among others, are diversifying their supply chains to include the SADC, driven in large part by the region’s mineral wealth, but also as an attempt to mitigate supply risks.

As the global demand for critical minerals intensifies, major powers such as the United States, Japan, the European Union, among others, are diversifying their supply chains to include the SADC, driven in large part by the region’s mineral wealth, but also as an attempt to mitigate supply risks.

For context, during the 2023 G20 Summit in New Delhi, the EU and the US announced a partnership to develop the Lobito Corridor, which provides the Southern regions of the Democratic Republic of the Congo (DRC), northwestern Zambia and Angola greater access to regional and global markets through Lobito port. This is the first strategic economic corridor launched under the Partnership for Global Infrastructure and Investment (PGII). The US also recently signed Memorandums of Understanding (MoU) with officials from the DRC and Zambia, two major producers of cobalt. The EU signed an agreement with Namibia in 2022 and MoUs with DRC and Zambia for a partnership on critical and strategic raw materials value chains in 2023. The UK has bilateral partnerships on critical minerals with South Africa and Zambia as well. In 2023, the Japan Organization for Metals and Energy Security (JOGMEC) signed an MoU with Zambia, and a Scope of Work (SW) with Namibia and DRC to secure critical minerals. Major actors from the Gulf too are in a quest for the region’s mineral wealth. The UAE signed a $1.9 billion USD deal with DRC’s state owned mining company, Sakima, to develop at least four mines. Saudi Arabia has also signed MoUs with DRC and Zimbabwe in the last two years.

China’s role in the African critical mineral ecosystem continues to grow. It processes and refines around two thirds of the world’s critical minerals, and its recent export bans on minerals including gallium, germanium and antimony as the tech trade war with the US escalates, raises concerns for major powers. Since 2019, China’s mine ownership in Africa has increased by 21.3%, while there was a drop in the number of mines controlled by the US, Canada and Australia. A large percentage of its outward foreign direct investment in Africa is already targeted at SADC countries and it has also stepped-up acquisitions of mines in the region. In 2018, Chinese controlled mines were mainly concentrated in South Africa, DRC and Zambia, but since 2020, China has been investing heavily in Zimbabwe’s lithium mines. Similarly, between 2005 and 2020, South African mines received $3.85 billion USD in Chinese FDI through both state-owned and private enterprises.

In this complex geopolitical landscape, India should develop targeted strategies for specific countries and minerals in Africa. This blog presents an examination of existing political and economic ties to guide Indian decision makers in prioritizing countries, deploying effective tools, scaling up engagement and crafting a roadmap for enhanced collaboration.

This examination of existing political and economic ties will guide Indian decision makers in prioritizing countries, deploying effective tools, scaling up engagement and crafting a roadmap for enhanced collaboration.

A first step towards this effort, the authors have chosen two indicators and analysed them over a period of ten years from 2014-2024. This analysis of existing relationships underscores the multifaceted nature of India’s current engagement and points to areas where strengthening ties is essential.

1. Political Relations: Mapping high level visits – made by the President, Vice President, Prime Minister, and the External Affairs Minister of India, including both state visits and other outgoing visits – coupled with India’s diplomatic footprint in these countries, its development partnerships as well as the size of the Indian diaspora, serve as strong indicators of the political and strategic attention that New Delhi has placed on countries.
2. Economic Relations: Analysing bilateral trade and Outward Foreign Direct Investment (OFDI) from India indicates the depth of economic engagement. A particular focus on existing mineral partnerships in the form of MoU’s, are indicative of the existing frameworks of cooperation that could possibly be strengthened.

Political and Developmental Partnerships

When it comes to political relations, South Africa, which houses the largest Indian diaspora in the region, stands out as the country with the most frequent high-level visits from Indian leaders. India also has the most number of diplomatic missions in the country.

Table 1: A snapshot of the political relations and diplomatic presence from 2014-2024

Source: Compiled by the authors (MEA outgoing visits; MEA Indian Missions Abroad; MEA Bilateral Briefs)

However, these indicators of political connections fail to convey the entire picture. In the absence of overt diplomatic engagement, in the form of high level visits to most of the countries barring South Africa, the Government of India (GoI) has deployed developmental partnership instruments, including Lines of Credit (LoC), Capacity Building and Technical Assistance, Grants-in-aid and Humanitarian Assistance and Disaster Relief, to sustain relations.

Take DRC, for example. There has been no high-level visit to the country. The First Foreign Office Consultations between India DRC was held on 10 April 2024 in New Delhi,  but it is the second largest recipient of LoC’s extended by the GoI, routed through the Export-Import Bank of India, among the ten countries. This credit is estimated to amount to more than $406 million USD in the last decade. These LoCs are provided on concessional credit terms, and are aimed at supporting a wide range of development projects in, including the installation of three Solar Photovoltaic Power Projects in Karawa, Mbandaka and Lusambo provinces, hydroelectric power plants, power transmission and distribution projects, among others.

Figure 1: India’s Line of Credits to Select countries in the SADC from 2014-2024

Line of credit figure by Anika Vijapur

*All figures are in USD Million
Source: Compiled by the authors (EXIM Bank Government of India Line of Credit Statistics)

As Figure 1 points out, the largest recipient of India’s LoCs among the ten countries is Tanzania ($860.53 million USD), followed by DRC ($406.44 million USD), Mozambique ($383 million USD), Malawi ($239.18 million USD), Zimbabwe ($19.5 million USD) and Zambia ($18 million USD) in the last decade, from 2014-2024.

Beyond LoCs, and perhaps making up for the lack of political attention, are other forms of New Delhi’s development diplomacy in the region. Through the Indian Technical and Economic Cooperation Program (ITEC), a capacity building platform of the Ministry of External Affairs, many professionals from these SADC countries have received training. For example, in 2023, over 1,700 Namibian professionals and scholars, including more than 1,400 ITEC trainees, had benefited from the capacity building assistance from India. India has also provided considerable Disaster Relief to these states, prominently during the COVID-19 pandemic. An illustration of this is the donation of 100,000 doses and the supply of 1 million doses of Covishield under the COVAX programme, to Mozambique in March 2021.

Economic Relations as an indicator of engagement

True of Indian engagement across Africa, economic factors have shaped and propelled relations, even in the face of political passivity. India and the SADC first signed a MoU on Economic Cooperation in 1997. The broad areas of cooperation included the promotion of small and medium scale industries, non-conventional energy sources, diplomacy, and enterprises development through private sector involvement. A new MoU was signed in July 2024 reinforcing many of the areas of cooperation mentioned in the first MoU, including promoting trade and investment facilitation, private sector development, and a mutual interest in green growth.

Economic relations are measured through two primary indicators in this blog: bilateral trade and Outward Foreign Direct Investment (OFDI) from India. In terms of trade volume, South Africa has the highest bilateral trade with India, followed by Tanzania and Mozambique, with significantly higher figures compared to other countries. India’s key export items to the SADC are dominated by mineral fuels and pharmaceutical products, whereas major imports from the SADC include pearls, precious stones, and metals, followed by mineral fuels, oils, and its products.

Figure 2: India’s bilateral trade with select countries from the SADC from 2014-2024

Bilateral trade figure by Anika Vijapur

*All figures are in USD Million
Source: Compiled by the authors (MEA Dashboard; Ministry of Commerce and Industry Export-Import Database)

With respect to investments, or approved OFDI by the RBI, Mozambique emerges as the top destination for Indian FDI, followed by South Africa. Conversely, Namibia and Madagascar have seen the least inflow of Indian investments. The investment flows into Mozambique are largely driven by the strategic interests of Indian companies in its coal and natural gas sectors. For example, ONGC Videsh and Oil India Ltd. jointly acquired a 20% stake in Area 1 of the Rovuma gas block for over US$5 billion. FDI is a good indicator of relations between countries because it is not only a source of financing for the receiving country, but also helps transfer knowledge and build capacity.

Figure 3: India’s Approved Overseas Direct Investment to select SADC countries from 2014 – 2024

OFDI Figure by Anika Vijapur

*All figures in USD Million
Source: Compiled by authors (EXIM Bank; RBI ODI Statistics)

Within the SADC region, Indian companies have made major investments in manufacturing, mining, construction, and energy. From April 2010 to August 2022, 14.2% of India’s investments in the SADC region were in the agriculture and mining sector. For oil and energy companies, the quest for diversifying sources of supply has driven the intensity of these investments.

Within the broad spectrum of energy partnerships, the Ministry of Mines, Government of India, has signed MoUs on cooperation on mineral resources with five out of the ten countries, namely, Zimbabwe, Zambia, Mozambique, Namibia and Malawi. The common areas of cooperation highlighted in the documents include exchange of knowledge and technology, training and capacity building, promotion of private investment and business opportunities, and developing cooperative projects pertaining to exploration and extraction of mineral resources.

The Way Forward

As India begins to strengthen its supply chains overseas, it will be important to craft country and mineral specific strategies.

While India enjoys a multidimensional relationship with countries in the SADC, this preliminary analysis finds that current political and economic engagements are insufficient for establishing resilient critical mineral partnerships. The existing foundation of development projects, a significant diaspora, increased diplomatic presence, and economic ties must be harnessed more effectively to meet India’s growing demand for these resources.

Juxtaposing India’s relative disadvantages against a geopolitically charged landscape dominated by China, requires identifying nimble policy manoeuvres to remain competitive. A reimagination of how India’s political and economic instruments can be creatively utilised, including learning from the strategies adopted by other powers already active in the SADC region, would inform India’s National Critical Mineral mission and its ambition of building international partnerships with resource rich countries.

The disconnect between India’s strategic action and commercial activity also warrants attention. Crucial geographies, such as the DRC which produces over 80% of the world’s cobalt, presents a significant opportunity for India. However, this is not being fully realized, as evidenced by the slow progress of mineral cooperation agreements, absence of high-level visits, despite growing bilateral trade, and Indian investment. The mining related conflicts and the growing influence of armed groups in the region only complicates this further.

As India begins to strengthen its supply chains overseas, it will be important to craft country and mineral specific strategies. In this initial assessment, South Africa and Mozambique emerge as the strongest partners for India across most dimensions of engagement. Tanzania holds a high position as a trade partner and a recipient of India’s development assistance, while Zambia is one of the top three recipients of Indian outward FDI. Towards that end, future directions of inquiry for this research will include mapping the critical mineral landscape in these countries, including an overview of existing governance, regulatory frameworks and local content policies, and exploring the potential for bilateral, trilateral, and multilateral partnerships.

Juxtaposing India’s relative disadvantages against a geopolitically charged landscape dominated by China, requires identifying nimble policy manoeuvres to remain competitive. A reimagination of how India’s political and economic instruments can be creatively utilised, including learning from the strategies adopted by other powers already active in the SADC region, would inform India’s National Critical Mineral mission and its ambition of building international partnerships with resource rich countries.