Africa: A Wealth Of Opportunities

Consequently, for nearly three decades, Africa has benefitted from a substantial growth in the natural resources sector.

Two of the countries that stand out in terms of mineral extraction are the Democratic Republic of the Congo (DRC) and South Africa. The DRC, for example, is a major producer of copper and cobalt, accounting for more than 70% of the world’s cobalt production, with approximately 3.6 million t of cobalt yet to be mined. South Africa produces the largest amount of platinum globally and Mozambique (along with South Africa) also holds significant reserves of graphite and lithium.

The global economy is dependent on these minerals. For example, cobalt’s use is widespread and demand is rising: it can be found in mobile phones, electric vehicles, solar panels, and other renewable energy systems. The past four years have seen a steep uptick in EV sales and it has been predicted that by 2026, global EV production alone will require almost the same amount of cobalt as the total global cobalt supply of 2021. In this respect, Africa sits firmly at the forefront of the global green energy transition. Indeed, research from BloombergNEF has found that in order to reach net-zero, demand for key metals like copper, lithium, and aluminium will grow fivefold by 2050.

The mining sector is essential to Africa’s economies – in the DRC, last year, it represented 43% of the national budget, 47% of GDP, 95% of exports, and a quarter of jobs. However, as with mining, capitalising on these raw materials for the benefit of African economies needs some refinement.

The question which arises is twofold:

1. How can we extract more of these vital minerals and metals sustainably?
2. How can we encourage further investment in a continent with countries which, while geologically attractive, are economically, and in some cases politically, challenging for global investors?

Understanding and overcoming the difficulties currently facing the mining industry in Africa is essential to realising the green energy transition.

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