Africa is home to one-third of global mineral reserves and an enormous opportunity exists to transform many African economies rich in the critical minerals needed for the clean energy transition. 

The continent is endowed with roughly 85% of the world's manganese, 80% of the planet's platinum and chromium, 47% of cobalt, 21% of graphite and 6% of copper. These are all key minerals for the clean energy transition. 

Africa’s massive store of minerals is found in all four corners of the region. Mali has 700,000 tonnes of lithium reserves. Guinea has the world’s biggest bauxite reserves (vital for the production of aluminium oxide) while Gabon is the world’s second-largest producer of manganese. The Democratic Republic of the Congo (DRC) has over 70% of the world's cobalt production and Namibia is the world’s leading exporter of uranium ore. South Africa has 90% of global platinum group metal reserves.

Zimbabwe is the world's third-largest exporter of chromium ore and has the planet’s fifth biggest lithium reserves. Mozambique is the world's third-largest producer of graphite while Zambia is the world's largest exporter of unrefined copper. In Eritrea, zinc ore accounts for almost half of all its exports. 

Furthermore, there are almost one hundred rare earth elements mineral deposit sites found in half the countries of Africa. Just five countries — Mozambique, Angola, South Africa, Namibia and Malawi — hold half the sites found in Africa.

Driven by the energy transition, the demand for critical minerals is expected to rise sharply — more than doubling by 2030 and quadrupling by 2050 — with revenues reaching $400bn a year — according to the International Energy Agency's World Energy Outlook 2022. This presents a huge opportunity for African countries — many home to huge unexplored and untapped mineral resources.  

For example, the DRC is considered the world's richest country in terms of its natural resources. Its untapped deposits of raw minerals are estimated to be valued at more than $24 trillion, according to Michigan State University. It is home to 1,100 different minerals and precious metals, including copper, cobalt, tin, tungsten, tantalum and diamonds.  

However, a big question surrounds Africa’s mining potential. Will the continent seize the opportunity or let it slip — either by failing to exploit the minerals fully or allowing them to be exploited by foreign corporations with little benefit to the population? There is also a risk that the so-called ‘resource curse’ will apply to Africa’s current opportunity in minerals. 

The recourse curse refers to the failure of many resource-rich countries to benefit fully from their natural resource wealth. Revenue from extracting raw materials could be mismanaged or embezzled by government officials or siphoned off by foreign corporations. The bonanza could crowd out investment in other parts of the economy and make goods and services more expensive. 

Another huge challenge exists for African countries with great mining potential — how can all the mining take place in a ‘responsible’ way without destroying forests and natural habitats? 

African countries would like to become a lot more involved in ‘beneficiation’ or value-added processing. It involves the transformation of a primary material (produced by mining and extraction processes) to a more finished product that has a higher export sales value.

One of the biggest issues for many African countries is that normally as soon as a particular ore is mined, it is sent to another country for processing or refining. For example, the DRC accounts for 73% of global cobalt extraction, but 80% of its cobalt is shipped to China, via the South African port of Durban or Mozambican ports. China accounts for 76% of global refined cobalt production and is benefitting more from the DRC’s cobalt riches than the country itself. 

Similarly, Guinea sits atop some of the largest known deposits of bauxite ore on Earth, but 80% of its bauxite is exported to China. The country’s only aluminium oxide refinery is capable of refining less than 3% of its annual bauxite production. The Guinean government is now pressing multi-national mining companies to develop more in-country downstream processing capacity to refine bauxite into aluminum oxide, which trades for six to seven times the price of bauxite itself. 

Other countries are now trying to become more involved in processing their minerals. During 2023, Namibia, Ghana and Zimbabwe banned the export of unprocessed critical minerals. Zimbabwe has Africa’s biggest lithium reserves. Namibia has a heavy rare earths operation that produces 2,000 tonnes per year of rare earth oxides and has rich deposits of two of the most valuable rare earths — dysprosium and terbium. Ghana recently discovered commercial quantities of lithium. These countries also have cobalt, manganese, nickel and graphite reserves. 

There is a precedent for the bans. In 2017, Tanzania — home to the world’s fifth-largest graphite reserves — imposed an export ban on gold ore.

However, shaky power grids are an obstacle to refining and processing throughout Africa. Guinea has been unable to undertake large-scale bauxite ore processing owing to a lack of consistent and affordable energy, as alumina refining and aluminium smelting are highly energy intensive. South Africa’s mining industry uses 10% of the country’s diesel, an expensive source of energy but something the sector depends on because of frequent power cuts in the country. 

Guinea is also a good example of one of the other risks the African mining industry faces — political instability. In September 2021, the government of President Alpha Condé was overthrown in a coup d’état, which ultimately resulted in military leader Mamady Doumbouya being sworn in as interim president. He remains the president in November 2023. Since 2020, there have been coups in seven African countries — some with important mining industries (Mali and Gabon, as well as Guinea). 

The present unprecedented rush by global players to create a secure supply of critical minerals is putting the African continent on centre stage. A new scramble for Africa’s mineral wealth is under way. A huge amount of mining is already happening throughout the region but the potential for a lot more is great. Despite its enormous mineral reserves, the mining exploration budget in sub-Saharan Africa is the second lowest in the world —roughly half that of Latin America, Australia and Canada. In 2022, it accounted for less than 10% of global mining exploration spending and less than 5% of the mining sector's global revenue, according to White & Case, a law firm. Political instability and a lack of energy are just two of the major hurdles to developing the sector in the region. 

Already China has a big presence in the African mining industry and is now eager to become more involved in mineral processing and battery manufacturing in the region. For example, in the DRC, Chinese entities own or have stakes in almost all the country's cobalt-producing mines. Seven of nine existing large or more developed lithium projects across the continent are partially or completely Chinese owned. 

In June 2023, Prospect Lithium Zimbabwe, an arm of Chinese company Zhejiang Huayou Cobalt, opened a $300mn lithium processing plant in Zimbabwe. Morocco also has at least two ‘gigafactory’ projects associated with a $280mn investment by Chinese firm Tinci Materials and a planned $6.3bn project led by China-based battery maker Gotion High-tech. China is also heavily reliant on sub-Saharan Africa for its manganese imports (primarily from Gabon, South Africa and Ghana).

Today, the US and the European Union are emphasising commodity supply chain risks associated with an over-dependence on China and the need to develop strategic agreements with ‘friendly’ countries that are able to supply ‘responsibly’ sourced critical minerals. ‘Responsible’ mining is commonly defined as mining that involves and respects all stakeholders, minimises and takes account of its environmental impact and prioritises a fair division of economic and financial benefits

The US has begun to form multi-lateral and bilateral partnerships, including extended tax credits and subsidies for mineral development in closely allied countries. This should be good news for Africa but, for a variety of reasons, the continent is being left out of many partnerships and trade deals.

Western business interests have been hesitant to invest in countries with weak governance or poor labour practices, something that is quite common in Africa (and something that Chinese firms are normally prepared to ignore). Despite the presence in the region of some of the biggest and most sophisticated mining companies in the world, the images of labour-intensive artisanal mining are hard to shake off. Many Western mining companies must comply with environmental, social and governance (ESG) rules and many African countries just do not tick enough boxes. 

The growing international attention to developing Africa’s critical minerals could help lead to a more prosperous and stable continent. Many African countries have high hopes for what their mineral resources could do for their countries’ development trajectory. Indeed, one top White House official has said, “The energy transition is an opportunity for an Africa transition.” 

Given Africa's wealth in key resources, it will be difficult to have a global energy transition without its involvement. Mining could transform many African economies but, in order for a country to attract investment, its legal framework around mining must be transparent. The continent’s mineral assets must be mined in a responsible way; otherwise, the local communities will not really benefit and natural habitats will be irreparably damaged. 

— Jason Mitchell is a British financial journalist, based in Africa, who writes about emerging markets, including Africa, the Middle East and Latin America. He specialises in topics related to wealth creation, mining, capital markets, banking and conservation.