From geopolitical competition to CRM strategic cooperation: the EU-Indonesia-Africa triangle

Summary

Introduction

As the global race to secure critical raw materials (CRMs) intensifies, new forms of international cooperation are emerging that aim to combine resource access with industrial development and sustainable value chains.

Africa, home to abundant strategically important CRM reserves, is at the centre of global competition for resources essential to the green transition. Despite vast mineral deposits, most countries struggle to translate mineral extraction into broader development gains due to limited processing capacity and weak infrastructure. Between 2016 and 2022, 73% of greenfield foreign direct investment (FDI) in sub-Saharan Africa targeted extraction, while only 26% went to processing and manufacturing. In response, African governments are increasingly prioritising domestic value addition in the CRM sector, including refining and processing activities beyond raw material extraction, economic diversification and the growth of downstream industries, alongside greater value capture through upstream local content. Value addition, as reflected in the African Union’s (AU’s) Green Minerals Strategy, could support the creation of jobs and skills transfers and translate to expanded manufacturing and related infrastructure development.

At the same time, external actors, such as Indonesia, are seeking to secure and diversify CRM supply for the clean energy transition. Indonesia, which produces around 51% of the world’s nickel, has leveraged its resource dominance to promote downstream industrialisation, as indicated by its 2020 nickel export ban. As it seeks to develop an electric vehicle (EV) battery industry under its Industrial Decarbonisation Roadmap and Presidential Regulation No. 55/2019, the country increasingly requires additional critical minerals beyond its domestic supply. Partnerships with African countries could help secure these complementary minerals and facilitate access to Africa’s emerging EV market. In return, by drawing on its experience in building downstream industries from nickel resources, Indonesia could support African economies to capture more value, create skilled jobs and advance their own industrialisation objectives.

In parallel, the European Union (EU), through initiatives such as the Green Deal Industrial Plan and Critical Raw Materials Act (CRMA), is seeking to diversify its CRM supply chains and reduce dependence on a small number of suppliers, particularly China. Africa is central to the EU’s efforts in this regard, given its vast reserves of cobalt, copper, manganese, rare earths and emerging lithium resources needed for Europe’s net-zero transition. Through the Global Gateway and a series of formal raw material partnerships, the EU is deepening cooperation with African countries to secure stable inputs for Europe’s clean technology industries.

The differences between Indonesia’s and the EU’s approaches in Africa’s critical minerals sector present both tensions and opportunities for all three parties. Indonesia supports downstream industrialisation through export restrictions in African countries, while the EU strategy largely focuses on integrating African producers into European supply chains. At the same time, Indonesia has actively mobilised state-owned enterprises (SOEs) to build partnerships with African mining actors, whereas the EU has struggled to mobilise its private sector competitively in Africa’s CRM sector. This divergence exposes a broader challenge for CRM partnerships: aligning supply-security interests with African developmental gains through concrete financial instruments and conditionalities that incentivise local value addition beyond mere rhetoric.

Nevertheless, the presence of the EU and Indonesia on the African continent also promises mutual benefits for the EU, Indonesia and African countries. Triangular cooperation offers a pathway to reconcile competing external interests with African development priorities. This approach typically involves Southern-driven partnerships between at least two developing countries, with support from a developed nation or a multilateral organisation in designing and executing development initiatives. 

Against this background, this paper asks whether EU and Indonesian engagements in Africa’s CRM sector will evolve competitively or can be shaped into complementary arrangements that advance African developmental goals. It first examines Indonesia-Africa partnerships, before exploring overlaps between the strategic interests of the EU and Indonesia in Africa’s CRM sector. It then assesses how these partnership models may support value addition in African countries and considers the potential of triangular cooperation between European, Indonesian and African partners to better leverage their respective advantages.

The evolution of Indonesia-Africa relations: from the Bandung Spirit to strategic partnerships

Indonesia’s engagement with Africa dates back to the 1955 Asia-Africa Conference, which established the Bandung Spirit and laid the foundations for political, economic and cultural cooperation among developing countries. Building on this legacy, Indonesia initiated the New Asian-African Strategic Partnership (NAASP) in 2005 to institutionalise interregional cooperation, though it struggled to gain traction as African countries favoured other bilateral frameworks, like the Forum on China-Africa Cooperation (FOCAC) led by China, the Tokyo International Conference on African Development (TICAD) led by Japan or the India-Africa Summit. Increasingly, Africa became an economic focus for Indonesia, particularly after the 2008 financial crisis.

Mutually beneficial engagement with African countries now constitutes a strategic priority for Indonesia, which regards the continent as a potential market for Indonesia’s non-traditional exports and investments amidst global geopolitical conflicts. In 2018, under President Joko Widodo, the first Indonesia-Africa Forum (IAF) opened new non-traditional export markets and expanded government-to-government and business-to-business cooperation, particularly in infrastructure through Indonesian SOEs. Follow-up initiatives, including the 2019 Indonesia-Africa Infrastructure Dialogue (IAID), helped position African countries as key markets for Indonesian capabilities in construction, energy and transport. At the second IAF in 2024, cooperation broadened to economic transformation, health, food security and especially critical minerals.

Indonesia-Africa cooperation in the CRM sector primarily revolves around two strategies: negotiating preferential trade agreements (PTAs) and establishing government-to-government cooperation on critical minerals via memoranda of understanding (MoUs).

First, PTAs can reduce or eliminate tariffs on intermediate or processed mineral products, harmonising rules of origin that determine value-added activities in partner countries, such as investment protections for foreign capital, which can integrate producers into global or regional markets. This is vital, especially when investor-state dispute settlements (ISDS), often included in trade agreements, can undermine states’ authority to effectively regulate critical minerals and related social or environmental concerns through a so-called chilling effect. Indonesia’s negotiations of PTAs with partners such as Mozambique and Morocco, and discussions on PTAs with Kenya and Tanzania, have generated regulatory frameworks for trade and investment as strategic instruments for government-to-government cooperation. For example, Indonesia will source graphite from Tanzania, prompting negotiations on a PTA between the two countries. This will streamline regulations pertaining to tariffs, facilitate exports and imports and include provisions for the protection of investments.

Second, cooperation on critical minerals and energy through government-to-government cooperation and MoUs emphasises capacity building, technology transfer and value addition for African countries, while also helping Indonesia secure the mineral inputs and energy resources needed for its own industrial and clean-energy ambitions. Indonesia has pursued partnerships with Libya, Kenya, Morocco, Rwanda and Tanzania¹ to collaborate on building domestic production capacity for batteries and other green technologies. Indonesia has also established a multi-sector Task Force with Mozambique and initiated mining cooperation discussions with the Democratic Republic of the Congo (DRC) through the deployment of advanced technology. Existing bilateral agreements between Indonesia and African countries are summarised in Table 1.

A prominent example is the Indonesia-Tanzania mineral partnership focused on EV battery cooperation, which was formalised through a 2024 MoU to advance equitable development in both countries. The agreement envisages Indonesian investment in processing facilities, smelters and supporting infrastructure in Tanzania, alongside knowledge transfer and business agreements. Implemented by Indonesia’s Mind.ID and Tanzania’s STAMICO, both SOEs, the partnership focuses on integrating Indonesia’s nickel and Tanzania’s tin into downstream industries and regional battery value chains.

Divergences between EU and Indonesian mineral interests and partnership models in Africa

To diversify supply in the context of strategic dependencies for its green, digital and defence transitions, the EU has signed partnerships and concluded MoUs with five resource-rich sub-Saharan African countries: South Africa, Rwanda², DRC, Zambia and Namibia. In addition, an MoU with Egypt was signed at COP27 (2022) for a strategic partnership on renewable hydrogen. The MoUs commit the governments to develop, within six months of the signing, an operational roadmap for concrete activities. Funding for the EU-Namibia MoU, for instance, ranges from a EUR 500 million investment instrument from the European Investment Bank to EUR 1 billion in investments by the EU, its member states and financial institutions. In addition, strategic projects in three African countries, South Africa, Zambia and Malawi, were selected and announced as part of the EU’s projects for the CRMA in 2025.

Several African countries, notably the DRC, Namibia, Rwanda and South Africa, appear in the portfolios of both the EU and Indonesia, but there are no concrete overlaps among the two actors’ focus areas on specific critical minerals and segments of the value chain. For instance, whereas the EU-Namibia MoU focuses on sustainable raw materials value chains and the creation of a well-functioning green hydrogen hub, Indonesian cooperation with the country is exploring tin mining. The EU-Rwanda MoU focuses on the integration of sustainable raw materials value chains and support for economic diversification, while Indonesia has signed a general cooperation framework, including energy and mining, with no specific details. The EU-South Africa MoU enhances cooperation across the entire minerals and metals value chain ecosystem. In contrast, Indonesia’s Pertamina signed an MoU with South African Guma Africa Group business partners in upstream oil and gas projects, finalised on the sidelines of the 2025 G20 summit.

In addition to the lack of overlaps in focus areas, there are also significant differences between the EU’s approach to mineral partnerships with African countries and Indonesia’s model of South-South cooperation. The EU’s CRM cooperation with African countries covers the entire value chain, from mining to processing and refining, cooperation on supply-chain integration, infrastructure financing, research and innovation, capacity-building, and sustainable sourcing under a near-uniform MoU partnership model. The MoUs are complemented by stringent cooperation on environmental, social and governance (ESG) standards and EU-funded technical assistance to advance concrete projects towards investment readiness. However, financing structures and concrete project pipelines remain fragmented and vague. The EU’s approach, diverging from South-South cooperation, has also been critiqued for potentially reinforcing unequal ecological exchanges between the Global South and Global North.

In contrast, Indonesia’s partnerships take place in the Bandung Spirit of equality to keep downstream benefits in a supply chain within the Global South, and focus on capacity-building, knowledge transfer and value-added production in the CRM sector. To this end, government-to-government cooperation supports business cooperation in building domestic production capacity for green technologies in African partner countries, demonstrated by direct investment by Indonesian firms in local mining companies and infrastructure. In addition, the Indonesian government’s policy of prohibiting the export of mineral ores has been met with considerable success and cited as a compelling example for African countries, though its replicability on the African continent has been questioned.

However, these divergences between the EU and Indonesia’s partnership approach are beginning to narrow. At the 7th AU-EU Summit, held on 24-25 November 2025 in Luanda under the banner of ‘effective multilateralism’, Europe formally recognised that they need to back Africa’s ambition to process critical minerals domestically, rather than export them. The EU’s narrative also moved, at least in rhetoric, to support Africa’s long-standing local value addition and industrialisation objectives through strategic projects under the EU CRMA. This shift is being reinforced as Indonesia’s priorities converge with strategic imperatives that also shape the EU’s approach, such as supply security, market diversification and reducing dependence on China. To bypass Chinese export markets and dependence on Chinese capital, Indonesia is leveraging its downstreaming expertise to integrate African partners into its emerging EV ecosystem.

From deals to value addition: partnerships’ prospects for development gains

Whether the different cooperation models of the EU and Indonesia will translate into value addition in African countries – as defined in the introduction – remains to be seen. Beyond value creation, these partnerships may result in either developmental gains or a critical mineral resource curse, depending on their social and environmental footprint at the community level. Mineral rents, for example, may be captured for either public investment or by elites. It is therefore crucial for partnerships to ensure that the social and environmental costs of critical minerals and energy projects are not disproportionately borne by affected communities. This can be achieved by co-creating a social licence to operate in mining, which incorporates and enforces safeguards.

Partnerships between Indonesia and African countries could support greater value addition on the continent through capacity-building and knowledge-sharing, as well as the integration of African countries into regional value chains. Specifically, Indonesia proposes to share its experience and expertise from its mining sector with African partners. For example, under the Indonesia-Tanzania mineral partnership, Tanzania could gain access to Indonesian nickel for domestic use and support regional downstream industrialisation initiatives with Burundi and the DRC. Another notable aspect of this cooperation is Indonesia’s SOE effort to secure rare earth metals from tin by-products, which Tanzania can also leverage to build its own technological capacity.

The EU’s concrete strategic projects, rather than its currently vague MoUs, also offer opportunities for value addition, particularly when it comes to financing, ESG standards and access to markets. For instance, the EU-South Africa strategic project focuses on the integrated extraction and processing of magnet rare earths and battery grade manganese and has secured USD 20 million funding from the Industrial Development Corporation of South Africa. In line with the EU’s stringent ESG standards, a South African community trust holds 21% interest in the project. Other examples include the Kobaloni cobalt processing project in Zambia, which is set to become the first cobalt sulphate refinery in Africa, increasing the value of mineral value chains while creating jobs and investment, and the Songwe Hill Rare Earths project in Malawi, which, although it is an extraction project, will supply the promoter – Mkango Resources Limited – with purified mixed rare earth carbonate. Mkango runs a separation plant in Poland and will grant the project access to European markets.

Nonetheless, though the EU claims its cooperation with African countries is ‘a partnership of equals’, its wider values-based partnership model and its limitations to incentivise investments in the African CRM sector could be a source of tension. If the EU fails to strengthen value creation in partner countries, its stringent standards may be seen as less appealing compared to competitors. In addition, the EU’s diplomatic partnership approach through MoUs is yet to translate to new investment or mineral value addition in any of the African partner countries. The EU’s reliance on raw materials exports has also been criticised, particularly as export restrictions are not supported in the bloc’s CRM partnerships.

Rather than adopting a binary position, the different partnership models used by the EU and Indonesia, each with distinct development benefits, should be seen as complementary for African countries. Triangular cooperation could help to leverage African countries’ bargaining power to obtain better concessions, greater investment in local processing or increased technology transfer.

Navigating geopolitical interests through triangular cooperation

The distinct advantages of the two partnership models offer pathways for triangular cooperation that could allow the EU and Indonesia to combine complementary strengths. The EU has limited recent experience in rapidly scaling mineral processing industries in emerging markets or know-how in downstream industrialisation that could be shared with African countries. However, it has a strong capacity in ESG regulation and experience in deploying public and blended finance solutions. Indonesia, by contrast, has hands-on experience in accelerating up- and downstream processes and integrating minerals into battery value chains, which it is willing to share with African countries. Indonesia's relationship with African countries possesses strong modalities to assume South-South leadership on a regional or multilateral scale. However, the tangible impact of this cooperation might be constrained by limited financial capacity and the absence of explicit social and environmental safeguards for particular projects. 

Triangular cooperation can accelerate South-South collaboration by combining Indonesia’s contextual expertise with public, private or blended investment support from the EU and its Member States. Since short-term African prospects for cell component and battery manufacturing are limited, triangular cooperation could, by drawing on lessons learnt from Indonesia, more realistically target upstream processing to transition from exporting mineral ores to mineral refining, before advancing to manufacturing. In exchange for raw materials, Indonesia could also engage in these activities in the African EV sector. This effort could help extend the African continent’s existing capacities, such as the recently opened lithium processing plant in Zimbabwe (funded by China) and a battery assembly operation in South Africa.

To gain access to CRMs, EU public funding could support triangular cooperation projects through the bloc’s Clean Trade and Investment Partnership (CTIP), the EU Global Gateway investment package or the EU’s RESourceEU Action Plan. Within the EU, specific countries, such as Germany, may be interested in launching mutually beneficial projects with Indonesia, given existing cooperation in the field of clean and renewable energy projects. Besides the public sector, blended finance approaches in collaboration with the private sector could also be deployed. The Africa Energy Guarantee Facility (AEGF), created in collaboration with the European Investment Bank (EIB), the German Development Bank (KfW), the African Trade Insurance Agency (ATI) and the reinsurance company Munich RE is a good example. The facility, with contributions from public- and private-sector parties, aims to enhance access to finance for energy projects by eliminating risks faced by investors. 

Combining financial instruments to de-risk large-scale projects with Indonesian knowledge-sharing on technical expertise related to up- and midstream capacities would benefit the three actors for two reasons. First, this approach would secure the minerals sought by the EU and Indonesia, while supporting mid- and downstream industrialisation in African countries. While the EU seeks to expand its domestic refining and processing capabilities, it currently lacks this capacity requiring at least partially processed or refined minerals. This aligns with African countries’ aspirations and Indonesian firms’ technical expertise. Second, it could strengthen the parties’ geopolitical positioning in global value chains. For the EU, partnering with Indonesia in Africa could provide access to the diversified supply of processed or refined CRMs beyond China. For Indonesia, collaborating with the EU could expand its access to markets and similarly reduce dependence on China. In sum, joint projects in Africa could reduce the dependence of both partners on China and benefit Africa’s mid- and downstream industrialisation.

Conclusion and recommendations

In an increasingly competitive global landscape, triangular cooperation over critical minerals could offer a pragmatic pathway for aligning economic, industrial and development objectives. However, the outcomes will largely depend on partners’ ability to coordinate financial instruments and governance standards and translate strategic overlaps into concrete projects. To increase the prospects of mutually beneficial triangular cooperation, we recommend the following five measures.

First, the EU needs to find ways to incentivise its private sector, since triangular cooperation rests on financial support from the EU or its Member States through private, public or blended instruments. The EU has so far failed to mobilise finance at scale from its private sector in the African mining sector, making it unlikely that the bloc can support a triangular cooperation. Without insurance and guarantees from European finance institutions, private sector cooperation remains constrained by investor risk perceptions, and the sector continues to face significant capital shortages. Policy proposals have suggested price-stabilisation mechanisms, such as floor and ceiling price guarantees, which could shield investors from commodity price volatility and provide more predictable revenues for companies investing in mineral extraction and processing projects in Africa.

Second, the EU must ensure adequate safeguards for blended finance solutions, as they are well-known for escalating public debt and hindering sustainable development objectives in African countries. Adequate safeguards would address concerns in triangular cooperation that advanced industrial countries shape agendas in ways that prioritise their own interests over equitable South-South development. Cooperation frameworks in official development assistance (ODA), for instance, have long been shaped by power asymmetries and donors’ political priorities, a risk that is now re-emerging in the geopolitical race for access to Africa’s critical minerals.

Third, EU Member States are unlikely to support partnerships that undermine the bloc’s ESG standards. To position Indonesia as a South-South technical leader in mineral value chains by leveraging EU financial instruments, it is necessary for the country to implement clear ESG frameworks for its international cooperation projects, which it has already started to pursue domestically in partnership with Germany. Furthermore, the government is planning to restrict Indonesia's SOE Pertamina from entering into any additional fossil fuel business agreements from 2026 onwards.

Fourth, for triangular cooperation to truly capture value addition, it must overcome the exploitative patterns and coordination challenges of past cooperation. Current geopolitical dynamics and fiscal pressures, such as African countries’ steep debt burden and decreasing development finance, create strong incentives for governments to secure upfront revenues from mineral agreements on bilateral terms. African countries’ pragmatic approach to favour bilateral partnerships reflects the realities facing resource-rich countries navigating an increasingly competitive landscape. However, it may undermine triangular cooperation. A common African agenda which defines minimum terms of partnerships at the regional level with regard to tax breaks, the ratio of grants versus loans and the specifics of de-risking arrangements would help individual countries navigate triangular initiatives.

Fifth, for African countries to capture the most beneficial terms, triangular CRM cooperation would require embedding mutual accountability mechanisms into cooperation design. For instance, setting up South-South trust funds with African institutions, increasing alignment with the African Green Minerals Strategy and defining clear domestic value addition benchmarks in monitoring, reporting and evaluation would help ensure that partnerships support African-led development objectives rather than reproducing extractive models of cooperation.

References

About the Authors

Eszter Szedlacsek

Eszter is a PhD candidate at the Institute for Environmental Studies (IVM) at Vrije Universiteit Amsterdam and a Marie Skłodowska–Curie Fellow within the European Joint Doctorate ADAPTED.

Rachmi Hertanti

Rachmi Hertanti is a researcher at the Transnational Institute and a Doctorate candidate at Philipps-Marburg Universiteit, Germany.