How Africa can make the most of critical minerals

How Africa can make the most of critical minerals

Africa’s copper, cobalt, and lithium reserves are among the largest on earth. The technologies powering electric cars, wind turbines and solar panels depend on them, and as the global economy vies for supply, Africa is again on the centre stage.

The continent has faced such moments before – during the oil and copper booms of the 1970s, and the commodities supercycle of the 2000s – only to see their geological wealth exported, with little local value captured. 

Public finances have typically been vulnerable to crashes, and economies have stayed narrow. The urgent question now is: can this cycle be broken? The answer is yes, but only if African governments act deliberately.

Mining critical minerals won’t directly create jobs

Industrial mining is not a mass employer. The capital intensity of modern extraction means fewer people are needed to produce more output. Automation is accelerating this trend. Job creation must therefore come from the broader economy, not the mines. Three actions can make that happen:

1. Beneficiation: Processing minerals before export requires engineers, technicians, and skilled operators. While not labour-intensive at scale, this would build capabilities and anchor industrial ecosystems.
2. Local content: Mining firms require goods and services, including fuel, catering, maintenance, construction, and transportation. Well-crafted policies can ensure local firms supply these inputs. IGC research in Zambia reveals that suppliers linked to mines are more productive and resilient; however, they face a range of challenges that policy actions can help mitigate.
3. Public investment in the broader economy: Mining revenues can be used to finance roads, power, urban infrastructure, and education. These lay the foundation for wider economic growth. As Paul Collier put it during the panel, “Mining rents should not be used to fund industrial fantasies, but to finance the basics.”

Prioritise early-stage processing, not pipe dreams

The case for value addition is strong, as exporting raw materials locks in low returns. But not all beneficiation – the process of treating materials like ores to improve their quality and make them more suitable for further use – is equal. While some steps are realistic, others are not.

Battery manufacturing is often held up as a goal. But it is capital-intensive, technologically complex, and requires integrated supply chains. Most African countries lack the infrastructure and market access to compete. As Oxford’s Amir Lebdioui warned during the panel, “The idea of exporting batteries to the West does not reflect the economics of battery production.”

A more effective strategy is to begin with early-stage processing. Zambia refines just 2% of its copper. Zimbabwe exports lithium ore. Building smelters, refineries and precursor plants can shift more value onshore, support industrial upgrading, and diversify global processing away from China. 

This could also improve their negotiating power. Countries with some processing capacity can extract better terms from downstream firms, and are more able to meet the growing demand for “clean” supply chains with traceable, low-carbon inputs.

Still, early-stage beneficiation is not a panacea. It requires reliable energy, effective environmental regulation, and technical expertise. However, done right, it serves as a bridge between raw exports and high-value industries.

Plan for an uncertain future

One of the biggest risks in mineral policy is overconfidence. Markets change; technologies evolve; and what is critical today may be irrelevant tomorrow.

For example, battery chemistries are shifting. Some use less cobalt, while others eliminate lithium altogether. Solid-state batteries, sodium-ion variants, and recycling all threaten to disrupt demand, and new discoveries can further undercut prices.

This uncertainty requires humility. However, governments tend to make two common mistakes: The first is over-investing in a single commodity (such as building infrastructure or offering subsidies tailored to a specific mineral) that may become uneconomical or obsolete if demand falls or technology shifts. The other is over-promising to citizens, fuelling public expectations that later turn into disillusionment.

A better strategy is to invest in shared, multi-use infrastructure such as power, water, rail, and ports. These serve the mining sector, but also support agriculture, manufacturing, and services. Projects like the Lobito Corridor, which links Zambia to Angola’s Atlantic coast, are good examples – they have been designed for minerals, but can carry more.

Governments should also keep their strategies flexible. Regular policy reviews, data use, and transparent public communication can help manage risk and maintain trust.

Build a state that can bargain

Minerals do not negotiate – governments do. And unless African states strengthen their capacity to govern the sector, most of the gains will accrue elsewhere. Three things need to improve:

1. Strategic coherence: Too often, ministries work in silos – one agency courts investors while another revises tax codes – but coordination is essential. Some countries, such as Zambia, have established national delivery units to coordinate policy.
2. Revenue collection: Mining taxes are complex; firms often operate through opaque structures. Governments need audit capacity, production tracking and legal authority to enforce compliance. Without this, tax leakage is inevitable.
3. Contract negotiation: Mining deals are long-term, high-stakes and highly technical. Without skilled negotiators and legal teams, countries risk leaving money on the table.

Establish cross-border partnerships

Africa is no longer merely a supplier, but central to global mineral diplomacy. The US, EU and China all want access. This external interest brings leverage, but only if it is managed with purpose.

Governments in mineral-rich countries must develop clear strategies that articulate what they want most from global partnerships – whether that is infrastructure, local value addition, or technology transfer. Playing multiple partners against each other can generate options, but doing so requires careful coordination and strategic planning. 

At the same time, importing countries must do more than just make diplomatic statements – this includes mobilising resources that lower the cost and risk of doing business. Equity stakes, political risk insurance, and concessional financing are all tools that can help transition projects from MoUs to construction.

Both exporters and importers must embrace common interests, including environmental and social standards, transparent contracts, resilient supply chains, and long-term value creation. Trust cannot be assumed – it must be built, transaction by transaction.