Vast Mineral Wealth Meets Financing Challenges
Southern Africa holds about 30% of the world’s critical mineral resources according to reports from the World Economic Forum, positioning the region as a potential powerhouse in the global transition to cleaner energy. The analysis, conducted in collaboration with the Development Bank of Southern Africa and McKinsey & Company, highlights minerals including copper, cobalt, lithium, graphite, and platinum-group metals across ten Southern African nations.
Despite this significant reserve base, sources indicate that Africa’s exploration spending in 2024 reached only $1.3-billion, representing just 10.4% of total global investment. The report states that Southern Africa’s share was even smaller, suggesting substantial untapped extraction potential given the region’s higher reserves-to-production ratios for most minerals compared to global peers.
Barriers to Unlocking Mineral Potential
The analysis identifies eight core financing barriers affecting Africa’s critical minerals development: policy uncertainty, investment risks, energy access constraints, transportation barriers, lagging innovation, slow industrialization pace, skill gaps, and demand volatility. According to the report, these challenges have contributed to declining exploration activity across the continent despite rising global demand for critical minerals.
Minerals Council South Africa CEO Mzila Mthenjane noted that South Africa accounts for only about 1% of total global exploration spending. “We need to be deliberate in our policy, and we need to be intentional in our actions,” Mthenjane stated, emphasizing the importance of digitizing geological data and creating transparent application processes for exploration rights.
Strategic Solutions and Regional Initiatives
The report highlights several replicable solutions already demonstrating success in the region. Among these is the Lobito Corridor, a railway-focused initiative linking mineral-rich regions of the Democratic Republic of Congo and Zambia to Angola’s Port of Lobito. Supported by multiple international partners, the project includes upgrades to existing rail lines and a planned 800 km extension to ease export bottlenecks.
Analysts suggest that Zambia’s mining policy reforms provide another promising model, with new legislation reportedly boosting investor confidence and promoting greater local participation. The country’s copper production, currently at 700,000 tonnes annually, is expected to reach one-million tonnes by 2026, with a national target of three-million tonnes by 2031.
Derisking Investment for Sustainable Development
Experts emphasize that attracting capital requires strategic derisking measures. Mandela Mining Precinct executive director Julie Courtnage argued that derisking investment in mining requires research investment to remain “future facing” and better manage emerging risks. She highlighted the importance of developing “Africa-relevant” technologies rather than importing unsuitable solutions.
“Return on investment is not only about your capital invested and the interest and the returns; it’s whether what you’re investing in is going to create more liabilities than returns,” Courtnage stated, advocating for a longer-term, systemic view of critical minerals investments.
Integrated Value Chain Financing Approach
African Union Development Agency CEO Nardos Bekele-Thomas discussed the importance of integrated value chain financing, noting that capital inflows should build sovereign and resilient economies rather than simply extracting resources. “If you want to finance a mine, your proposal must include financing for the local processing plant,” she argued, emphasizing that business cases should link to broader industrial development.
The approach aligns with global initiatives like the Critical Raw Materials Act that seek to secure sustainable mineral supplies. As other regions face their own challenges, from setbacks in rare earth strategies to trade disputes affecting supply chains, Southern Africa’s mineral development takes on increased global significance.
Broader Implications for Regional Development
DBSA CEO Boitumelo Mosako warned that if extraction continues to be characterized by raw material exports with limited local beneficiation, the continent risks missing another opportunity to convert mineral wealth into structural socioeconomic transformation. “Our mission has always extended beyond infrastructure financing – it is about enabling inclusive growth, alleviating poverty and deepening development impact across the continent,” she stated.
The report comes as global infrastructure development faces multiple challenges, from data center conversion projects to AI-driven landscape transformations visible through satellite imagery. Meanwhile, human ingenuity continues to drive quantitative funds despite advancing AI capabilities, underscoring the complex interplay between technology, resources, and economic development.
Jörgen Sandström, head of the WEF’s Transforming Industrial Ecosystem programme, emphasized that “cross-border collaboration is really essential in this space,” highlighting the need for public-private, private-private and public-public partnerships to scale clean energy and critical minerals development across Southern Africa.
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