AFRICA is ideally positioned to become the next century’s economic growth engine, driven by a combination of favuorable demographics, abundant natural resources, and rapid technological adoption. With the youngest population globally, a burgeoning middle class, and significant natural resources, the continent is set to harness its potential for substantial economic development. Mining is an industry brimming with potential, as a vast majority of Earth’s critical minerals and metals lie beneath our soil’s surface.
As a South African mining entrepreneur, with a mining business with interest and impact across 26 African countries, I have witnessed firsthand the immense potential of South Africa and the broader African continent in the mining industry. There are two factors that I’d like to highlight that have contributed to the increasing interest in our continent’s mining industry.
A continent rich in natural resources
Firstly, Africa is home to 30 percent of the globe’s critical minerals, and various African nations are at the forefront of their respective industries.
South Africa, for instance, possesses 80 percent of the world’s platinum group metals reserves; Morocco has more than 50 billion tons of phosphate reserves (70 percent of the world’s total); the Democratic Republic of Congo has the world’s largest cobalt reserves; Mozambique and Tanzania jointly hold 13 percent of the world’s graphite, and Gabon has the world’s second-largest manganese deposits (9 African countries with the most critical minerals, May 2024). Gold and diamonds are also two markets that Africa dominates, producing 65 percent of the world’s diamond supply and almost 30 percent of global gold production.
Secondly, Africa is set to become an even more prominent global supplier, if not the supplier. There are several macro-economic shifts, technological advances, and supply chain opportunities contributing to this:
- Increased demand: Over the past few years, demand for critical minerals have increased sharply and will continue to do so. Projections are that the demand for critical metals will more than double by 2030 and quadruple by 2050. Experts estimate that global revenues from just four key minerals, namely copper, nickel, cobalt, and lithium, will reach $16 trillion over the next 25 years, of which sub-Saharan Africa could reap over 10 percent (Source: International Monetary Fund).
- Renewable energy: According to the International Energy Agency’s World Energy Outlook Special Report, renewable energy technologies could drive 40 percent of total copper and rare earth elements demand, 60-70 percent of total nickel and cobalt demand, and 90 percent of lithium demand. Around a third of the world’s green mineral reserves reside in Africa, providing a significant opportunity for our continent.
- Raw vs refined: At present, Africa mainly exports minerals in their raw states. By developing local processing plants to increase their capacity to export refined goods or products instead, mining would drive even more economic development for the continent. Take raw bauxite, for example, which sells for $65 per ton but at $2,335 per ton as processed aluminium.
Understanding Africa’s uniqueness
Consequently, Africa’s vital role in supplying essential minerals and metals on a global scale, at present and in the future, have been the focus of an increasing number of mining debates and discussions, such as the annual London Indaba. Under the theme, ‘Africa’s critical role in the minerals and metals of the future,’ mining experts from around the globe gathered to share market insights, sustainable and impactful mining practices, and strategic opportunities to drive positive change for the industry. Many spokespeople stressed the need for increased collaboration and cooperation between mining stakeholders to meet the pressure of future demands, with a focus on forming partnerships as a solution.
However, while global platforms such as these are critical for the advancement of the entire industry, one impression that these Africa-focused mining events has created is quite problematic. A viewpoint more common than expected, there is the detrimental notion that Africa is one entity, instead of a continent consisting of 42 currencies, 54 countries, 3,000 languages, and almost 1.5 billion people.
While this may seem more like a geographical faux pas, this viewpoint is leading to a one-size-fits-all mining mentality amongst global companies and investors. Approaching Africa like a single entity – similar to seeing it as a country instead of a continent – creates various misconceptions about not only the distinct mining challenges that each nation faces but also the needed solutions and future opportunities. By ignoring the diverse cultures, political environments, available infrastructure and development of each country with a blanket strategic approach, one cannot expect to successfully localise operations.
Only once global mining entities understand that a successful operational strategy in Namibia cannot be deployed in a cookie-cutter way for South Africa can productive discussions about Africa’s role in the bigger scheme of mining start.
Think local before global
A case in point would be recent DRC Mining Week in the DRC, where although acknowledgement was made to the country’s integral part of the broader global mining community, the most pressing issue discussed was artisanal mining (also known as small-scale mining) and the associated environmental damage and ethical issues. In contrast, South Africa’s annual Mining Indaba at the beginning of the year centred on disruption of the mining industry through technological and other advancements to realise a lower carbon future.
Africa’s diversity is its strength, and this should be a clear message from all mining countries to the rest of the world. Some African countries feel so strongly about stimulating the local growth of their countries that they made headlines with their controversial decisions to put export bans on unprocessed critical minerals, which currently includes Namibia, Ghana, and Zimbabwe.
While this goes against the grain of exponential global growth, the learning is that a unique and insights-based strategic path must be plotted for each specific African country when it comes to the mining industry. Global mining entities must prioritise their understanding of each country’s unique contributions and capabilities, economic growth forecasts, and future mining capabilities first. Only once robust mining strategies and have been refined per region can the sum of Africa’s potential as a major global supplier be envisioned and realised.
Reon Barnard is a mining entrepreneur and builder of businesses. He is the Director and Shareholder of Jabali Mining Services, and Co-Founder of BCR Holdings, Chairman of The Sekta Group, Director of Barrock, and CEO of Tabono
This op-ed first appeared on Mining Weekly (www.miningweekly.com)
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