Africa must not rush to sell its critical minerals

by MARIA MACHARIA
NAIROBI, (CAJ News) — AFRICA’S critical minerals could become one of the continent’s greatest economic opportunities — but only if African governments resist the temptation to sell them cheaply to solve today’s financial problems.

That was the message from civil society organisations at the sixth African Conference on Debt and Development (AfCoDD VI), where campaigners warned that resource-backed borrowing could leave African countries trading tomorrow’s mineral wealth for today’s cash.

Africa possesses vast reserves of minerals including copper, cobalt, lithium, graphite and manganese, all increasingly important to electric vehicles, renewable energy, batteries and other technologies driving the global energy transition.

For Africa, this is more than a geological advantage.

It is an opportunity to move beyond the historic role of exporting raw materials and build industries around its own resources.

If minerals are processed on the continent, countries can capture more value through refining, manufacturing, technology and services.

That can create skilled employment, expand tax revenues, develop local businesses and provide governments with greater resources for education, healthcare, infrastructure and other public services.

But rushing to sell or pledge these resources could undermine that opportunity.

Resource-backed loans can provide governments with immediate finance, particularly when conventional borrowing is expensive.

Yet repayment through future mineral exports or revenues can constrain governments for years.

If commodity prices fall, production disappoints or debt obligations become excessive, countries may find themselves with fewer resources and less fiscal freedom just when they need them most.

There is also a wider danger.

Selling predominantly unprocessed minerals means much of the lucrative activity — including refining, advanced manufacturing, technology and higher-value jobs — can remain outside Africa.

The continent could therefore possess the minerals powering the energy transition while capturing only a fraction of the wealth they generate.

This would repeat a familiar pattern: Africa exports valuable resources, while profits and industrial capabilities accumulate elsewhere.

“Africa’s minerals should finance development by powering green industrialisation, creating decent jobs, strengthening public services and generating the revenue needed to improve people’s lives,” said Koaile Monaheng, Global Political Lead at Greenpeace Africa.

He warned that using future mineral wealth as collateral for short-term borrowing risks leaving African countries with debt, inequality and environmental costs.

Civil society groups are therefore calling for resource-backed loan agreements and related mining contracts to be publicly disclosed and independently scrutinised.

Parliamentary approval, stronger mining taxation and action against illicit financial flows are also needed.

Crucially, African countries should expand regional processing and manufacturing while ensuring communities affected by mining have a meaningful voice and strong environmental and human-rights protections.

The lesson is not that Africa should stop mining. It is that Africa must stop undervaluing what it owns.

Critical minerals give the continent bargaining power at a pivotal moment in the global economy.

Used strategically, they can help Africa finance its own industrial transformation.

Used recklessly, they could become another chapter in a history of wealth leaving the continent while debt and environmental costs remain behind.

– CAJ News