US Edges China in Race for Kenya's Sh9.7 Trillion Rare Earth Minerals

Kenya, June 19, 2026 - The United States is emerging as Kenya's preferred strategic partner in the race to develop the country's vast critical minerals reserves, after Nairobi moved closer to signing a landmark agreement focused on local processing and value addition rather than the export of raw materials. The proposed deal, centred on Kenya's rare earth and strategic mineral deposits, could unlock investments tied to the development of the Mrima Hill deposit in Kwale County, estimated to be worth about $62.4 billion (Sh9.7 trillion). President William Ruto said Kenya is nearing the conclusion of a critical minerals agreement with the United States that would ensure minerals extracted in the country are processed locally before export. "We have agreed that the minerals will be processed in Kenya," Ruto said following discussions with leaders at the G7 summit. The agreement signals a significant shift in Kenya's mineral development strategy, as the country seeks to maximise economic benefits from its natural resources through domestic beneficiation, job creation and industrialisation. Washington's approach aligns more closely with Kenya's push for value addition, at a time when African countries are increasingly resisting traditional extractive models that involve exporting raw materials for processing abroad. "We cannot accept a future in which Africa simply exports raw green minerals while industrial value addition, advanced manufacturing and technological innovation take place elsewhere. That model belongs to the past," Ruto said during the Kenya Mining Investment Conference in May. The United States has intensified efforts to secure alternative sources of critical minerals as it seeks to reduce dependence on China, which dominates global supply chains for rare earth processing and refining. Recent Chinese export restrictions on key minerals have heightened concerns in Washington over supply security for industries such as electric vehicles, artificial intelligence, semiconductors and defence manufacturing. China currently controls a substantial share of global rare earth processing capacity, giving it significant influence over industries critical to the energy transition and advanced technologies. The US has responded by pursuing critical minerals partnerships across Africa, Latin America and Asia. Located in Kwale County, Mrima Hill hosts significant deposits of rare earth elements and other strategic minerals, including niobium, yttrium, lanthanum and strontium, which are essential in the manufacture of batteries, wind turbines, electric vehicles, smartphones and military technologies. Kenya launched an international tender process for the development of the deposit earlier this year, attracting interest from companies linked to the United States, China and Australia. However, the government has made local processing a non-negotiable condition for any investor seeking mining rights. The deposit's development has been delayed for years due to legal disputes involving previous licence holders and concerns over environmental protection, given that Mrima Hill is also regarded as a sacred forest by the local Digo community. Kenya's negotiations with Washington reflect an intensifying global competition for critical minerals, which have become central to the clean energy transition and the development of advanced technologies. Across Africa, governments are increasingly leveraging their mineral resources to negotiate better terms, prioritise local processing and diversify international partnerships. The Democratic Republic of Congo, the world's leading producer of cobalt, is also pursuing a critical minerals partnership with the United States as it seeks to reduce dependence on Chinese investment and expand value addition within its borders. For Kenya, the proposed agreement offers an opportunity to position itself as a regional hub for mineral processing and advanced manufacturing while ensuring the economic benefits of its natural resources remain within the country. If concluded, the deal could mark a turning point in Kenya's mining sector, shifting the country from a supplier of raw materials to a participant in global value chains for the technologies powering the future.