The Africa Finance Corporation’s (AFC) report, “Compendium of Africa’s Strategic Minerals,” launched at the Mining Indaba conference in Cape Town, reveals that the continent hosts approximately USD 29.5 trillion in mineral reserves around 20 percent of total global mine site value. However, the report argues that the core challenge is not a lack of resources, but limited processing and industrial capacity. About USD 8.6 trillion of Africa’s mineral wealth remains undeveloped, a figure equivalent to roughly 2.5 times the continent’s annual economic output.
Value added captured abroad
According to the AFC, Africa largely exports its minerals in raw form, while refining and advanced manufacturing take place elsewhere. Yet value increases significantly during processing. For instance, iron ore valued at USD 2.8 trillion at the mine site could generate an estimated USD 25 trillion in economic value if converted into steel locally. Despite this potential, most of the added value is realized outside the continent.
The report also highlights a trade structure that disadvantages Africa. Minerals are typically exported on a Free on Board (FOB) basis, with producers covering inland transport and port handling costs. Finished goods, however, are imported on a Cost, Insurance and Freight (CIF) basis, meaning buyers pay for shipping and insurance. As a result, Africa effectively bears costs both when exporting raw materials and when importing finished products.
Infrastructure and demand mismatch
The report stresses that the constraint is structural rather than geological. Energy supply, transport infrastructure, and industrial demand rarely converge in the same locations, limiting large-scale production. In South Africa, steel capacity has declined due to high energy costs, even as other African countries continue importing steel for infrastructure projects.
Limited domestic processing capacity also ties African mineral exports closely to Chinese demand. Slowdowns in China have led to production cuts and price pressures across several minerals, increasing the continent’s vulnerability to global market fluctuations.
The AFC calls for coordinated regional planning to align mineral production, processing capacity, and infrastructure investment. Integrated projects such as the Lobito Corridor could help reduce costs and support industrialisation.
Ultimately, the report concludes that Africa’s central challenge is to transform its vast mineral endowment into domestic industry, employment, and sustainable economic growth.
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